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Opalesque Industry Update - Despite experiencing one of the most difficult years for investment funds in Luxembourg and worldwide - at least in terms of assets under management - since the sector began its dizzying expansion more than 30 years ago, members of the industry from the grand duchy and beyond are convinced that new opportunities for growth are just starting to open up, according to speakers at ALFI's European Asset Management Conference on March 21 and 22. In 2022, the assets of regulated Luxembourg funds declined from around €5.9tln to €5.1tln (US$5.5tln) (although they rebounded in January this year), affected by the depressive impact on equity and bond markets of the outbreak of war in Ukraine, soaring energy prices and the prospect of shortages that did not in fact materialise, and central banks' rapid raising of interest rates to head off a surge in inflation. Seeds of future growth As ALFI (the Association of the Luxembourg Fund Industry) prepares to celebrate its 35th anniversary in July, ALFI chairwoman Corinne Lamesch argues that the seeds of the industry's future growth have already been sown. Since the Alternative Investment Fund Managers Directive took effect in 2013, Luxembourg has benefited from the growing appetite among institutional investors for regulated alternative investment vehicles, especially private equity and real estate, and more recently also private debt. The next major opportunity could be the just-completed revision of the European Long-Term Investment Fund regime. The ELTIF 2.0 legislation looks like it will finally open up alternative strategies to non-professional investors, both expanding the range of options for the retail market at a time when traditional equity and bond assets have often delivered disappointing returns, and expanding the capital pool available to fund Europe's infrastructure, including key aspects of the decarbonisation transition. As Ms Lamesch points out, Luxembourg is already home to a majority of the ELTIFs established so far. The country is also building an increasingly significant ecosystem of young, innovative fintech firms that are helping established institutions to address the challenges of digitalisation and automation everywhere from client relationships to compiling and analysing data to drive management decisions and for reporting to regulators and investors. Five-minute pitches interspersed through the conference highlighted the work of start-ups backed by the Luxembourg House of Financial Technology (LHoFT). Full report here: Article source - Opalesque is not responsible for the content of external internet sites |
Industry Updates
After a difficult year, Luxembourg's fund industry prepares to seize new opportunities
Thursday, March 30, 2023
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