Luxembourg is gradually carving out a role in global private markets, not with fanfare, but through quiet, deliberate action. Emerging investor relations roles, a growing presence of single family offices, and a measured push to localise fundraising are reshaping its identity beyond its traditional middle-office roots.
At the heart of this transformation is the “Investment Circle,” launched in 2023 by the Luxembourg Private Equity and Venture Capital Association (LPEA). Designed as a confidential, invitation-only forum, the initiative connects fundraising general partners directly with selected local investors.
“The Investment Circle is an informal series of meetings that aim to bring PE-VC fund managers who are fundraising closer to the local investment community,” said Stéphane Pesch, CEO of LPEA. “It’s confidential, smart, genuine and free for LPEA members, both fund managers and investors.”
In its first year, the circle hosted four events and welcomed eight managers presenting new strategies. The focus is on depth and relationship-building, not volume.
“The guest investors have a link with Luxembourg structures, a complete local team or at least an investment officer,” Pesch explained. “So it’s way broader than just Luxembourg local money.”
From back office to fundraising gateway
Luxembourg’s reputation as a back- and middle-office hub is solid—built on 36 years of Ucits and two decades of experience in alternative fund structures. But with evolving limited partnerships, the Raif structure for alternative funds, and Brexit-driven relocations, it is inching closer to the front lines of capital raising. Increasingly, firms are placing IR and fundraising staff in the Grand Duchy.
“If you have such chief operating officer or chief financial officer, crucial valuations and risk management positions within the AIFM, why not then also add that extra IR coordinator for Europe in Luxembourg?”
“To say that Luxembourg is a complete, fully-fledged, in all cases and names, front office is not true yet,” said Pesch. “But if you have such chief operating officer or chief financial officer, crucial valuations and risk management positions within the AIFM, why not then also add that extra IR coordinator for Europe in Luxembourg?”
Its location adds to the appeal.
“Imagine you take an IR position with a person who needs to travel ‘just’ to European cities or specific regions,” he said. “When it comes to the Benelux region, plus France or the DACH region, honestly, you can do everything out of Luxembourg and in a smooth manner.”
Still, Pesch sees this as a starting point.
“We are realistic on that,” he said. “If at one moment people tell us, yes, ‘we have done the entire tour and it’s okay since we found some investors locally present. This is promising and we will continuously return to Luxembourg for our board and investment committee meetings but also soon for our investors’.”
The family office factor
What gives the Investment Circle its edge is access to single family offices, alongside insurers, fund-of-funds, and private banks. These discreet but influential asset owners are gaining ground in private markets.
“Classical single family offices in Luxembourg which are part of our dedicated club of trusted members do not want to get directly ‘pitched’,” said Pesch. “They are meeting with their peers because they want to exchange on best practices, talk about deals, compare sectors, trends and set-ups. But when they like one of those famous managers presenting at the circle, they are also gladly coming to such events and certainly most welcome.”
The LPEA’s approach relies on consent and credibility.
“A sales process should never be frontal and should be informative or at least educational,” he said. “They need no push from us and want the best access to qualitative information, strong performance and robust products in order to fulfil their portfolio construction goals and returns. They also do not like ‘forced’ presentations and prefer constructive exchanges with seasoned experts and specialized professionals. As investors, they are very high in the value chain of our entire industry and represent an important voice.”
This growing attention from family offices is attracting global PE firms to Luxembourg—not just for board meetings or governance, but for direct investor interactions. Some are sending senior IR teams from London or Paris, paired with local Luxembourg talent, to build investor relationships.
“They took the exercise very seriously,” said Pesch. “You were really touching the same level as what you have seen at the most famous private equity conferences in the world.”
A long-term strategy
Luxembourg isn’t trying to become a megahub. Its edge lies in continuity, connectivity and proximity.
“If you don’t sell your assets, you cannot distribute money back to the investors and they will take longer to invest into the new structures or postpone some of the upcoming contributions. But once you do return capital, then you’re able to gather new funds for the next vintages.”
“In our industry you usually experience the full investment cycle and ‘fluidity’ of capital,” said Pesch. “If you don’t sell your assets, you cannot distribute money back to the investors and they will take longer to invest into the new structures or postpone some of the upcoming contributions. But once you do return capital, then you’re able to gather new funds for the next vintages.”
That is why performance matters, especially real, cash-in-hand returns.
“DPI is the new IRR,” said Pesch, referring to the Distributed to Paid-In capital ratio. DPI, which measures actual returns distributed relative to capital committed, is increasingly favoured over IRR as a more tangible gauge of success.
Luxembourg won’t be launching a high-profile family office summit anytime soon. But it remains on the radar. “This is something which could, after a few more years, become a reality and a classic in the Luxembourg and broader ecosystem,” Pesch said.
For now, the focus remains on building trust, one relationship at a time.“What really matters to investors is how to construct the right diversified and performing portfolio,” he said.
In that journey, Luxembourg’s future role will depend less on marketing and more on meaningful connections, with both funds and families.