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Luxembourg is hoping its long, friendly relationship with China can help keep the superpower on a path towards more investment-friendliness instead of sable-rattling with the US. Levels of investment in China by Luxembourg-domiciled investment funds dipped during that country’s difficult Covid times. Some institutional investors are staying away due to darkening US-China relations. Hopes for a resurgence depend on peace.

Luxembourg’s securitisation community is up in arms over watching competitor Ireland retain its role of EU leader in financial vehicle corporations and in series, despite optimism just last year over this country’s still-shiny securitisation law updated last year. The Irish implementation included provisions giving companies tax minimisation options that they can’t yet get under Luxembourg law.

A Memorandum of Understanding on financial services agreed between the EU and the UK, published on 19 May, could elevate the tone of the discussions and lead to a more productive relationship. “It’s a very encouraging confirmation that the relations between the EU and the UK are warming up,” said Nicolas Mackel, the CEO of Luxembourg for Finance, the public-private Luxembourg agency for the development of the financial sector.

European investors, mostly hailing from the Netherlands, find themselves increasingly exasperated as several Anglo-Saxon asset managers prioritise financial returns over the critical energy transition within oil and gas companies. This growing trend became starkly evident during recent shareholder meetings held by energy giants BP in late April and Shell in late May.

A year of negative crypto-asset industry headlines has left interest in the asset class undiminished, according to a survey of 127 industry practitioners released on Thursday. Respondents agreed crypto assets will be important for the future of Luxembourg’s asset management industry.  Local crypto actors attribute crypto-asset failures elsewhere to poor governance and due diligence failures but, all the same, are happy to see increased regulatory activity in this area. 

Institutional investment portfolios in Europe could do with more venture capital, especially when it comes to making green impact investments, the Netherlands’ technology investment envoy Constantijn van Oranje-Nassau said in an IO Talks podcast interview. Van Oranje, who leads Amsterdam-based Techleap, a Dutch government sponsored tech investment initiative, spoke about the global business climate for technology investments, the effects of rising interest rates on tech investments, dilemmas around artificial intelligence, and the new Nato Investment Fund, which is being structured via Luxembourg.

While those European investors still in doubt about the importance of ESG are becoming increasingly bogged down in a rearguard action, U.S. states are increasingly passing anti-ESG laws. “If this becomes federal policy, I would underweight the U.S. in the portfolio,” said Gaya Herrington,  a sustainability researcher and advisor to the Club of Rome.

Fund firms face the prospect of EU rules setting standards of “value for money” for their investment products under the Retail Investment Strategy due to be unveiled on 24 May. This could include disincentives, for example, to charging active management fees for an investment that underperforms an index fund. For all the discussion of a ban on inducements for investment advice, the commission has decided to propose a more limited inducement ban on execution-only investments. 

The top representative of the City of London Corporation on Tuesday began a two-day visit to Luxembourg that includes meetings with Luxembourg for Finance, financial regulator CSSF, the finance ministry and representatives of the grand duchy’s banking sector.

The European Court of Auditors, the EU’s top body designed to improve financial management in the European Union, has criticised the European Central Bank for failing to properly supervise the 110 largest financial institutions in the Eurozone.