Asset Managers

The Luxembourg District Court on Tuesday ordered the dissolution and liquidation of 23-year old investment firm Fuchs & Associés Finance SA and appointed a liquidator and an official receiver. Luxembourg’s financial supervisor CSSF, noting “serious breaches of essential legal and regulatory requirements,” said it has revoked the firm’s authorisation to operate as an investment services provider and has activated the Grand Duchy’s investor compensation scheme.

Hopes in the commercial real estate sector that central banks would lower interest rates due to declining inflation have been dashed. Interest rates are staying high for longer, causing problems, particularly for those who borrowed heavily during the market boom to fuel growth and who now face the burden of refinancing their debt.

The European Fund and Asset Management Association (Efama) has declared that the European investment fund sector is not capable of undermining financial stability to the extent that it results in systemic risks.

Accountancy firm PwC’s latest global asset management survey predicts a Darwinian industry shake-up, forecasting that one in six asset management firms worldwide will disappear by 2027 amid looming consolidation and technological disruption. “The choice is simple – adapt to the new context or fail.”

Jean-Marc Goy, recently appointed as chairperson of Alfi, the Association of the Luxembourg Fund Industry, speaks to Investment Officer’s Raymond Frenken about his priorities for the association and about Luxembourg’s role as a leading European and global centre for investment funds.

In what appears to be the final stage of bidding for Belgian private bank Degroof Petercam, two foreign banks are set to battle it out, Flemish daily De Standaard reported on Thursday, citing ‘several observers’.  The bidding process for Degroof Petercam is expected to be completed this month.

With a clear vision in mind, Jean-Marc Goy, chairperson at the Association of the Luxembourg Fund Industry, Alfi, is determined to foster the growth of the Grand Duchy’s asset management sector by encouraging effective collaborations with diverse stakeholders, including regulators. “The common goal is to strike the right balance between investor protection, and not putting in the way of the industry too many hurdles and obstacles that would stifle innovation”, Goy said in an IO Talks podcast interview.

Global managed assets decreased by four percent to $255 trillion in 2022, marking the first decline in fifteen years, according to the new Global Wealth report by Boston Consulting Group (BCG). However, global savings increased by over 6 percent during the same period.

Luxembourg’s financial sector has faced a wave of tax avoidance legislation in recent years. But the impact of the earlier measures is likely to pale in comparison to the EU’s latest – the third Anti-Tax Avoidance Directive, known as the “Unshell directive”. Luxembourg tax specialists are anxious about its potential impact on the widespread use of shell companies, often known as ‘special purpose vehicles’, in Luxembourg company structures.