Asset Manager

The appointment of Kevin Warsh as the new chair of the Federal Reserve was met with relief by markets worldwide. Gold crashed 9 percent, silver 28 percent. It was not only American investors who reacted. The whole world was watching. And that is exactly the point.

Valuation sits at the heart of Luxembourg’s private markets ecosystem, yet supervisors remain unconvinced that current practices are consistently robust. Speaking at an event organised by Kroll and the Association of the Luxembourg Fund Industry, the CSSF flagged shortcomings in the review and approval of valuation models at investment fund managers, underlining that governance, documentation and independent challenge still require closer attention as private assets continue to scale.

Multi-asset benchmarks assume costless and frictionless implementation, setting a high bar for allocation funds to outperform after fees. Even so, these “one-stop-shop” solutions remain appealing for many investors.

Chinese equities have outperformed Wall Street for two consecutive years, yet the label ‘uninvestable’ continues to stick, analysts say. China bulls have not abandoned the market, but they remain divided over whether state-owned enterprises should be kept or avoided.

Luxembourg has renewed the mandate of Claude Marx as director general of its financial regulator, extending his leadership of the Commission de Surveillance du Secteur Financier for another five years as the authority marks a decade of profound institutional change.

This week’s overview of appointments and other people news in and around Luxembourg.

Amundi’s full-year results underscore how Europe’s largest asset manager has become a formidable ETF machine. Yet behind the record passive inflows, profits still rely heavily on traditional active management and a deliberate push into higher-margin activities.

Asset manager L&G is planning to set up hybrid “crossover” funds alongside its extensive passive business. These funds will contain both public and private investments. With this in mind, the British asset manager is working with specialists such as Blackstone.

The comparison is increasingly common. Luxembourg is often described as the Singapore of Europe. It is meant as praise, and rightly so. But the comparison deserves refinement, because it cuts both ways.

An uptick of volatility in the dollar is forcing European investors to confront an awkward choice. With hedging already expensive, some are paying up to protect against further weakness. Others are opting to take the risk, arguing the bulk of the adjustment may already be behind them.