Wealth Managers

The road to hell is paved with good intentions. This applies also for well-intended regulations on environmental, social and governance. Because of the growth of ESG-focused investments in recent years, a new problem pops up: the risk of greenwashing. 

Fewer new reserved alternative investment funds are being registered in Luxembourg this year as investment managers are more cautious and VC fundraising has declined. Investor appetite appears reduced but has not disappeared. Dry powder is said to remain available among institutional investors in the alternatives market. 

Crédit Agricole, ABN Amro, and “one or two Swiss private banks” have been named as finalists in the bidding process for the acquisition of Belgian wealth management and investment bank group Degroof Petercam, French business daily Les Echos reported on Friday, citing multiple sources.

Client experience is becoming a more important competitive battleground in asset management, particularly for wealth managers who face pressure to meet the needs of younger, digital native investors. Nearly 40% of asset managers in the survey said that the client experience was a key point of differentiation versus their competitors, up from just 7% a year earlier, according to a study released this week.

A stellar performance of a small number of listed tech companies is largely responsible for the recent recovery in public stock markets. For Ben Prade, partner at international tech investor GP Bullhound, it remains to be seen whether this can serve as a full market revival. Nevertheless, he is upbeat about the prospects for private tech investments, saying 2023 can become “one of those really great vintages”.

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.

Fund management companies in Luxembourg registered some 22 new reserved alternative investment funds (Raifs) in April 2023, according to publicly-released data updated on 15 May. This development brings the total for this year so far to 128. Considering only the first four months of the year, the total number was down 20 per cent from last year during the same period.

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.

Brown Brothers Harriman (Luxembourg) S.C.A. said on Thursday it has been selected by Schroders Capital as central administrator and depositary bank for the launch of its first European Long-Term Investment Fund, or Eltif.

Belgium’s largest independent private bank, Degroof Petercam, is considering a major reshuffle of its ownership structure that could potentially lead to a new majority shareholder. Some of the existing owners, mainly Belgian noble families but also undefined “financial partners”, have indicated they want to sell their shares.

A deal could be worth more than one billion euro. Belgian state-controlled financial group Belfius, Credit Agricole, ING Groep and Royal Bank of Canada are reported as being possible bidders.