News

As real estate markets worldwide move in tandem by showing clear signs of a downturn, two major international financial bodies this week have reiterated their concerns over the housing market’s potential impact on financial stability. Both the European Central Bank and the International Monetary Fund have raised a red flag. Investment Officer looks for answers to some key questions a moment that mortgage rates are at their highest since 2006.

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.

FundRock, a Luxembourg-based third-party management company part of the Apex Group, said on Monday that it has expanded its relationship with UK-based fund manager Fundsmith to now include distribution services in Europe, particularly Italy.

In addition to existing ManCo services, FundRock’s distribution unit will now provide distribution services, enabling Fundsmith to distribute its funds in Europe. FundRock will provide specific resources and support to Fundsmith in the Italian market, the firm said.

The OECD’s latest global tax plan is in trouble. Dubbed “BEPS 2.0”, the Inclusive Framework Pillar One and Two proposals – which has the political backing of 137 countries – is facing political difficulties, including within the EU and the US. The “Ecofin” meeting of EU finance ministers on Tuesday in Luxembourg will seek to break the logjam in Europe. How is Luxembourg positioned?

“Europe does not use its single market enough as a political lever and militarily the continent does not amount to much. Our democracy and free market will be besieged on all sides. Meanwhile, the West’s willingness to protect our way of life is extremely limited. If we do nothing, we will remain a weakling in ‘the big game’.”  

Global insurers are diversifying their portfolios and most of them - 87 percent - plan to increase allocations to private investments over the next two years, which would represent a three percent average increase versus their current allocation, Blackrock’s latest global insurance survey shows.  

The world economy is slowing down at a faster pace than expected as a result of the consequences of Russia’s war against Ukraine, the Organisation for Economic Cooperation and Development, or OECD, said on Monday. Further interest rate increases are needed in most major economies to halt inflation, it said.

This IO Talks Luxembourg podcast episode with Corrine Lamesch, chair of the Association of the Luxembourg Fund Industry (ALFI), sheds light on the growing popularity of alternative investments in Luxembourg, addresses the complexity of ESG and sustainable finance regulation, and hears about the role of the grand duchy as a global distribution centre for financial products.

Gold prices have been struggling since the beginning of the year, quoting below $1,700 per ounce, definitely indicating a downward trend. On Wednesday, the Federal Reserve raised rates by 75 basis points in another move to a range of 3 to 3.25 percent. 

The position of women in the asset management industry has barely improved in the last seven years. Citywire’s Alpha Female Report 2022 shows that a mere 5.5 percent of all actively managed funds - or one out of 18 - are led by women. “Progress towards gender parity in portfolio management looks to have come to a grinding halt.”