Mike Gordon

Private banks in Luxembourg, especially the smaller ones, are struggling as their margins are squeezed while weak financial markets have not made business any easier this year, it became clear at a press presentation on Friday afternoon, held at the offices of Luxembourg’s bankers’ association ABBL, which presented the results of a new survey. “The important thing is critical mass.”

For international hackers and data thieves, Luxembourg appears to be attractive as its domestic lack of cooperation undermines its cyber security efforts. “Luxembourg comes onto the radar because some of the systems that we have are vulnerable,” says an expert.

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.

Sustainable investing may be taking the wider investment fund world by storm, especially in Europe. But when it comes to liquid alternative funds, the sustainable wave is less advanced.

Some in the liquid alternative space remain openly dismissive of sustainability as an investment principle. Certain liquid alternative providers use derivatives,  making it more difficult to integrate sustainability criteria. Derivatives are excluded from the EU’s Taxonomy.

​​​​​​​Ambitions to build on Luxembourg’s global hub status for investment funds to make this country a global fund distribution centre are being held back by differing national approaches on regulations as well as prudential rules, despite efforts to harmonise European legislation and the EU’s cross-border fund framework. 

Young investors are seen as a bit of a wild card by the investment industry. But look closely and it’s obvious that many young investors are fundamentally cautious due to their financial circumstances, while sympathising to a greater or lesser extent with rebellious social media elements intent on taking the financial industry down a notch or two.

While industry’s investment losses are beginning to show, the strong performance from recent years makes institutional investors reluctant to change their investment course. “Not an easy situation,” says the chief of Europe’s biggest pension body.

Central bank interest rate hikes seems to have had their desired effect, with signs pointing to the end of the very high inflation of late, but, according to three chief investment officers at M&G Investments, the world’s economy isn’t out of the doldrums yet, especially because of Russia’s ongoing war against Ukraine.

Inheritance planning is one area where tokenisation can provide benefits, the experience of VP Bank in the Alpine state shows. The bank’s specialists recent spoke in Luxembourg to explain how tokenisation can be applied once the EU MiCA regulation enters into force.

An innovative start-up in Luxembourg is looking to democratise housing markets by tokenising homes. Leveraging the blockchain, BlocHome lets its clients partially own the home they live in. On the part they do not own they pay rent. “The more you are owner, the less rent you have to pay.”