Luxembourg: a place of choice

Dans la sphère alternative, le Luxembourg représente 10,5 % du marché européen avec 585 milliards d’euros. C’est le quatrième plus grand marché européen pour la domiciliation des FIA après l’Allemagne, la France et les Pays-Bas. Les actifs non OPCVM sur le marché du Luxembourg ont progressé de plus de 10 % par an au cours des 10 dernières années (statistiques de l’EFAMA).

235 AIF managers have been authorised by the country’s regulator  (the CSSF : the Commission de Surveillance du Secteur Financier) and 610 AIFMs have registered with the CSSF, as of May 2017.

What are the strengths of Luxembourg's AIF industry?

Daniela Klasen Martin, Managing Director and Country Head of Crestbridge gave us her thoughts on the advantages of the Luxembourg AIF industry.

Globally speaking, what is the strategy of your clients Asset Managers in terms of AIF in Luxembourg?

Since 2013 Asset managers intend to use as much as they can the AIFM passport whether by using a Management Company in Luxembourg and/or through the creation of Luxembourg-based AIF.

However, those Luxembourg management companies must have the real and appropriate substance for operating in Luxembourg, meaning that they have to perform either risk management activities or portfolio management.

Setting up its own AIFM represents a considerable investment in time and resources, this is the reason why most of small or medium size asset managers do prefer having a third management company in Luxembourg, which is an interesting and cost-effective alternative. In addition it facilitates discussion with the Luxembourg regulator.

The management company has the AIFM license and it can help to speed up the fund approval process.

11 %
AIF assets in Luxembourg - annual growth rate 2006-2016*

*EFAMA statistics

Survey of  120 professionals from the  Luxembourg  financial marketplace in November 2016. 

How can Luxembourg be the winner on the AIF European market?

Luxembourg has a very long track record with the administration of UCITS that can be a real asset if we want to build the AIF Brand.

Luxembourg expertise and know-how is definitely recognized all over the fund industry world and has been increasing since the introduction of AIFM as a jurisdiction of choice for alternative/real assets.

Why did you decide to set up a Management Company in Luxembourg?

We set up our Management Company in early 2011 with a UCITS license. however our target was already at that time to be one of the first AIFMs in Luxembourg. Indeed, we saw early the opportunity to transpose the UCITS model that we know well into AIFM, using in particular our Group expertise in Real Assets. Luxembourg was the obvious jurisdiction, given its reputation and track-record as the leading Fund jurisdiction in Europe.

Is the RAIF the expected solution?

The RAIF is a useful addition to the Luxembourg product “toolbox”. Time to market is an essential element for asset managers when choosing a jurisdiction. As the RAIF doesn’t require CSSF approval, the process is now quicker, and is attractive to non-EU managers wanting to use the AIFM passport to enter the EU market. This increases the attraction of Luxembourg as a jurisdiction of choice, competing easily with other unregulated vehicles or offshore funds.

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