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On 23 August 2018, Luxembourg’s regulator, the CSSF, published a Circular 18/698 which set out to codify the organisation, substance and authorisation of Luxembourg investment fund managers. Amongst others the Circular replaces Circular 12/546, which detailed the CSSF’s expectations for UCITS managers and also served as the benchmark for AIFMs under the AIFM Directive.
This approach to further clarify and summarise what is expected of a Luxembourg management company is helpful according to Daniela Klasen-Martin (pictured), Managing Director and Country Head, Crestbridge Luxembourg, a leading independent administration, management and corporate governance solutions business.
“The Circular is a summary of practices
Private equity is sitting astride a mountain of dry powder, which currently stands at USD1.14 trillion according to Preqin*. Fund raising has never been easier but with so much money floating around, valuations are being driven upwards.
This is placing enormous importance on private equity managers planning for exits. How can they be sure that the target company will continue to grow and generate an attractive earnings multiple at exit when the valuation is already high at entry?
“The multiples being asked for right now are exorbitant; it used to be common to pay 10 or 11X EBITDA but in
Since Brexit has become a reality, UK managers have been putting in place contingency to protect their businesses, creating opportunities for other European financial centres including Luxembourg. Once the UK leaves the EU next year neither the UCITS or AIFMD regimes will apply and UK entities will no longer be able to manage and market their funds in the EU.
The risk to losing access to the single market is unacceptable to the UK fund manager community and in that regard Luxembourg is a really viable alternative, according to James Burke (pictured), Head of Apex Europe, Apex Fund Services (Ireland).
By Kavitha Ramachandran – Brexit is a major political disruptor and, despite the uncertainties, it brings tremendous opportunities. London is a key financial centre and it is no surprise that while we wait for the final negotiations to fall in place, financial industry players have started taking action to create a presence on the Continent to stay competitive and continue to attract capital. As a result, the asset management industry is seeing a shift from the UK to the Continent which is creating opportunities for countries in the EU27.
Simultaneously, digitalisation is gaining pace due to changing investor profiles and demands, cost
Luxembourg’s Reserved AIF (RAIF) has completely changed the Grand Duchy’s alternatives marketplace, from a fund structuring perspective. Over the last three decades it has become the de facto onshore jurisdiction for UCITS funds, but this has started to change in the last few years.
According to EFAMA, total AUM in AIFs grew by 15.1 per cent year-on-year to reach EUR673 billion at the end of 2017, while UCITS’ assets increased by 11.9 per cent over the same period.
As PwC points out in its 2018 Barometer Report, assets held by both AIF and UCITS funds in Luxembourg reached EUR4.1 trillion
Luxembourg continues to see net inflows of capital and is now the world’s second largest fund centre with, as of August 2018, EUR4.3 trillion worth of net assets under management, and this only in regulated funds, according to the Association of the Luxembourg Fund Industry (ALFI).
Luxembourg was the first EU jurisdiction to introduce the AIFM Directive, drafting a law and filing it with the Luxembourg parliament on August 24th, 2012 well ahead of the July 2013 deadline. Since then, the Grand Duchy has increasingly embraced moving away from traditional retail cross-border fund distribution under UCITS to become a real
By Anne-Gaëlle Delabye & Tara Kapur – Non-EU managers seeking access to European capital are more frequently looking to Luxembourg parallel structures due, in part, to their flexibility and the features that the Luxembourg limited partnerships share with the Anglo-Saxon model. Ogier’s Luxembourg investment funds team – working in partnership with our teams in the BVI, Cayman and Hong Kong – have extensive experience of structuring parallel funds for clients in the US and Asia.
Luxembourg limited partnerships are increasing in popularity as a parallel structuring option, being comprehensible in structure and functionality for managers (and investors) with experience in the
Fuchs Asset Management SA (‘Fuchs AM’) is the Management Company (‘ManCo’) within the family-owned Fuchs Group located in three jurisdictions: Luxembourg, Belgium and Switzerland. As an authorised AIFM, it provides the services and the knowledge (governance, risk management & compliance, portfolio management and distribution) for asset managers, private banks, family offices and entrepreneurs wishing to launch AIFMD & UCITS compliant vehicles as easily as possible.
Over the last four years, Fuchs AM has been expanding its AIFM capabilities to support investment managers, including private equity managers, who have deep investment expertise but aren’t necessarily equipped to run their own regulated
In a recent article with Private Equity Wire seven months ago, Sean Murray, Managing Director, Alternative Assets (EMEA) at SANNE – a leading provider of alternative asset and corporate administration services with more than EUR235 billion in AuA – discussed a definitive trend among PERE fund managers to outsource their internal accounting and reporting processes.
This trend shows no sign of abating as global PE/RE groups look towards Europe, and specifically Luxembourg, to develop global distribution hubs.
Brexit is another unavoidable catalyst. Brexit has contributed to some of the growth we are seeing in Luxembourg as fund managers are looking for stability
Luxembourg’s funds industry enjoyed a good period of growth last year, a period during which assets under management grew, on average by 15 per cent, asset flows grew by 5 per cent, profits grew by 10 per cent, while margins were broadly maintained somewhere close to 37 per cent.
As of August 2018, total fund AUM in Luxembourg stood at EUR4.27 trillion, up 7.15 per cent year-on-year. Interestingly, US fund sponsors account for the largest market share, equivalent to 20 per cent of total AUM, followed by Great Britain (17.6 per cent), Germany (14. 4 per cent) and Switzerland
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