Asset Managers

Luxembourg funds may well be too expensive. Investment fund managers of Ucits funds in Luxembourg, home to about a third of all such funds in Europe, have been ordered to review, and if necessary correct, the way they calculate the costs and fees of their investment funds and report back to their national regulator before April 1 next year. 

Funds investing in emerging market bonds lost for the third quarter in a row when measured in dollars, but made a small gain in euros. 

When it comes to ESG and sustainable investing, Luxembourg’s financial regulator is keen to ensure that investment funds will stick to their promises when they sell products that are branded as green and sustainable. More guidance is coming soon, and the regulator plans “a deep compliance check” for the third quarter of 2023.

Luxembourg-based Cube Infrastructure Managers has agreed to acquire Firstcolo Datacenters GmbH, a Frankfurt-based data centre business providing colocation, dedicated servers, managed services and private cloud solutions, for an undisclosed amount.

Firstcolo owns two-state-of-the-art “Tier III+” data centres in Frankfurt (photo), both of which are powered by green electricity. 

ESG isn’t a project. It isn’t about appointing a team who can bolt sustainability on to an asset management operation. To win the trust of investors, staff, regulators, civil society, the press, ESG must be embedded in strategy, the LuxFLAG Sustainable Investment Week 2022 was told on Monday.

BlackRock finds itself caught in a tug of war in US politics over its approach to sustainable investing.

On the one hand, there are Republican-led states that believe the world’s largest asset manager is hostile to the carbon-focused industry. On the other hand, there are Democrat-led governments that believe BlackRock is backtracking on its commitment to addressing climate issues. 

BlocHome, a Luxembourg blockchain real estate investment platform, has arranged a guarantee that will allow it to finance the first security token-based residential project in Europe, an eight million euro housing project in Luxembourg known as the “Clapton Residence”, without waiting for further fund-raising. The guarantee was arranged after the firms’s first project attracted 2.15 million euros in tokenised investments from 280 investors.

Investment funds that hold illiquid, hard-to-sell assets and that calculate their net asset value on a daily basis can trigger volatility and add to the impact of shocks in financial markets, especially in turbulent times, the International Monetary Fund (IMF) said in a policy note addressed to the financial community. 

Sustainable investing may be taking the wider investment fund world by storm, especially in Europe. But when it comes to liquid alternative funds, the sustainable wave is less advanced.

Some in the liquid alternative space remain openly dismissive of sustainability as an investment principle. Certain liquid alternative providers use derivatives,  making it more difficult to integrate sustainability criteria. Derivatives are excluded from the EU’s Taxonomy.

For Zurich-based Serpentine Ventures, a venture asset manager, Luxembourg is a key gateway to reaching international investors. The firm is leveraging the grand duchy’s regime for alternative investment funds for four of its venture capital funds that nurture Swiss startups.