As Luxembourg attracts growing numbers of fund managers and service providers, the progress is raising concerns among those with existing operations in the region. Attracting and retaining top talent is becoming more of a struggle as the number of players increases and the industry needs around compliance continue to mount.
As Luxembourg attracts growing numbers of fund managers and service providers, the progress is raising concerns among those with existing operations in the region. Attracting and retaining top talent is becoming more of a struggle as the number of players increases and the industry needs around compliance continue to mount.
“Investment management clients can no longer solely rely on competitive salaries to attract and/or retain talent, which was the case historically. Instead, candidates are increasingly looking for a clear career path and an employer who goes beyond the material aspects, offering opportunities for personal growth, career fulfilment and a good work-life balance,” explains Lamia Allam (pictured), senior consultant, One Ten Associates.
More recently, the difficulties in attracting talent have been compounded by the uncertainty caused by the Covid-19 pandemic. Allam observes: “Although, from a recruiter’s point of view, recent months have proven to be a great time to engage with talent who would otherwise be less accessible, approximately 40 per cent of the candidates we speak to have been rather reluctant to engage in interview processes unless the upside is significant enough to compensate for the perceived risks.”
In an attempt to tackle these chalIenges, One Ten Associates continues to provide clients with comprehensive talent mapping services and an extensive coverage of the local market, ensuring the relevant talent pools are identified, developed and nurtured. Allam comments: “This year’s unforeseen events have allowed us to allocate more time to building and maintaining long-term relationships with candidates, which, in turn, led to a rise in referrals and, subsequently, an increased number of placements.”
Brexit effect
As the UK heads for a potential no-deal Brexit, Luxembourg has been seeing a spike in interest from managers planning for future ease of access to Luxembourg fund products and structures. Allam observes: “The upheaval caused by Brexit seems to have made the Grand Duchy an even more appealing setup location thanks to its political stability and CSSF’s ongoing efforts to make Luxembourg a secure and attractive place for fund managers.
“The transitional regime introduced by the Luxembourg legislator ensured the continuity of existing mandates lapsed earlier this year. Despite this, fund managers continue to take the necessary steps to ensure that they are able to provide cross-border services and access European markets.”
From a recruitment point of view, One Ten Associates continues to service UK and Lux-based fund management clients, with the former increasingly requesting assistance in identifying their first hire in the Grand Duchy.
“Over the course of the year, One Ten Associates observed a spike in enquiries from long-standing fund management clients regarding setting up operations in Luxembourg and the initial infrastructure necessary to conduct business.
“Additionally, we have received and responded to multiple requests for candidate market mapping and compensation information, typically from clients who didn’t have a presence in the Grand Duchy at the time of enquiring. In the case of established clients who do already have a Luxembourg office, the challenge to retain existing staff members continues,” Allam remarks.
Need for compliance professionals
Allam goes on to observe current trends which have influenced hiring practices among fund managers and service providers: “Having gone through major regulatory adjustments due to an increased international focus on AML in the last couple of years, the funds industry has observed a new trend emerge – an increased need for senior compliance personnel qualified to meet rising demand among Luxembourg fund managers.
“In the case of regulated funds, legislation issued in November last year demands they appoint two compliance individuals, one at management level and one for control at the corresponding level. As a result, over the course of 2020, One Ten Associates has assisted a number of clients in identifying Conducting Officers (Compliance) and other compliance hires to boost their Luxembourg-based operations.
“We expect this trend to continue over the course of 2021. Furthermore, from our candidates’ point of view, we forecast compliance individuals interviewing for senior positions to increasingly investigate the fund’s KYC AML process and question the overall attitude and tone coming from the top, potentially rejecting offers from funds that aren’t able to offer the right level of reassurance.”
One Ten Associates has always relied on putting clients and candidates first. The firm won multiple awards in the London market for this very reason and strives to offer the same quality of service and commitment in the Grand Duchy. Allam says: “Since the biggest challenge for our clients is attracting and retaining quality candidates, our research teams are working tirelessly on mapping and targeting the European jurisdiction for finance and compliance professionals open to the region.
“Alongside the above, we invest in targeted marketing and advertising in Luxembourg and across Europe to ensure there is a strong online awareness of our focus in this region. Establishing a successful business in Luxembourg has been based on the application of honesty, integrity and professionalism – building and cultivating genuine relationships with our clients and candidates is what has allowed us to grow our local presence.”
Discussing the outlook for the Luxembourg fund industry more broadly, Allam believes several factors will continue to contribute to Luxembourg’s competitiveness and the ability to attract both business and talent: “From a business perspective, CSSF is key to future success – being able to preserve Luxembourg’s title as Europe’s leading fund domicile will require maintaining the balance between providing an attractive environment for business whilst ensuring a stable and secure environment for investors.
“Equally, in order to continue to attract candidates, funds – especially those setting up in the Grand Duchy – will need to be able to reassure potential candidates that they are much more than a ‘letterbox entity’. Fortunately, CSSF’s demands for companies to hire more employees and for senior staff to be based in Luxembourg make it rather difficult for disingenuous businesses to set up.”
Lamia Allam
Senior Consultant – Luxembourg, One Ten Associates
Lamia started her career in Asset Management research before moving into Fund. Management recruitment in 2016. She spent two years at One Ten Associates, followed by a year at an international executive search firm where she worked on developing a new market. Ever since re-joining One Ten in 2019, she has been carrying out London and Luxembourg-based assignments for alternative fund management clients. Her strengths lies in her ability to identify and engage with top talent in the market. Lamia holds a BSc in Finance and Accounting and an MSc in Capital Investments.
