It is not easy for Luxembourg, home to 5,139 billion euro in international fund assets at the end of April, to maintain its international leadership as cross-border funds centre.
Competition between Luxembourg and Ireland, Europe’s other international funds hub, is a topic that re-emerged on two separate axes this week in our coverage at Investment Officer.lu.
That Ireland is ahead in the contest for being Europe’s top ETF domicile has been known for some time, but Luxembourg is not without options, this article by John Crowley made clear.
What’s new is that Luxembourg remains overshadowed by the emerald isle also when it comes to securitisation products, despite an ambitious new legal regime adopted last year. This became clear at a discussion facilitated this week at PwC Luxembourg and reported on by InvestmentOfficer’s Mike Gordon.
Alternatives
Meanwhile, Luxembourg maintains its European lead in alternative investments, which account for a third of the Luxembourg investment pie. This type of investment is increasingly regarded as a must-have component in professional portfolios. I spoke to Daniele Antonucci at Quintet Private Bank, which in its midyear investment outlook advises clients to add some liquid hedge funds to their portfolios, on top of US treasuries and high quality European defensive stocks.
Dutch colleague Jorge Marten Groen attended J.P. Morgan Asset Management’s outlook in Amsterdam, where investors were given similar advice. Alternatives have become an “absolute necessity,” said Vincent Juvyns. The firm hosted a similar event in Luxembourg on Thursday.
In the alternatives space, Ben Prade, partner at tech investor and venture capital firm GP Bullhound, which opened a Luxembourg office a year ago, told me they have raised 110 million euro in a first “friends and family close” of their GP Bullhound VI fund. He said he expects to “bust through” the fund’s target of 300 million euro by the third quarter.
Also making headlines this week was a fierce industry reaction against the EU Commission’s retail investment package. Luxembourg’s banks, as per ABBL, regard it as “controversial”, a view also shared by Brussels-based sector groups, including EFAMA and the European Banking Federation.
They warned against a “detrimental impact” and spoke about “unfeasible” timing. Such opposition shows it will be hard for the ‘EU sausage factory’ to process this piece of legal meat and get it adopted at EU level before the end of the current term a year from now.
Hutt e schéin Wochenende all!
