News

Nicolas Mackel, the CEO of the Luxembourg for Finance development agency Luxembourg for Finance and considered as the de facto ambassador of Luxembourg’s financial sector, speaks to Investment Officer’s Raymond Frenken in this IO Talks podcast.

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 association representing Luxembourg’s banking industry has claimed success in its lobbying effort to persuade the EU to amend the rules governing the prudential requirements and the supervision of third-country branches to its satisfaction. The association said Thursday that a series of subsequent amendments preserve the attractiveness of the EU as a financial centre towards the rest of the world.

Private investors do not know what rising interest rates do to their investments. Despite this, they said they achieved solid returns even when blood ran through the streets.

Family offices are looking to allocate more assets to fixed income in the coming years, as well as illiquid alternatives such as private equity (secondaries). About a third of wealthy families already invest in digital assets, even if it is usually a very small percentage.

This is according to an analysis of two surveys on the investment plans of family offices. Both Goldman Sachs and UBS recently published results on this.

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.