Raymond Frenken

When it comes to sustainability, all actors, including the finance sector, need to develop a suitable level of understanding before policies and investment strategies can translate into impact, explains Nicoletta Centofanti, head of the Luxembourg Sustainable Finance Initiative, in an interview.

We’re finishing a productive week at Investment Officer Luxembourg in terms of news stories, with surprisingly strong and growing interest from international readers.

A solid return on investment and an acceptable level of risk remain the top factors for investors to consider when picking their investments, according to a new sustainable finance survey conducted among a representative section of the general public in Luxembourg.

Respect for human rights and the reputation of companies invested in are not seen as a leading factors for investors, said the survey, conducted among 1,100 people in April and May of this year.

The fund management industry can counter reputation risks posed by the increasingly complex regulatory requirements for sustainable investments with a bigger effort to boost investor education, a top executive at the Association of Luxembourg’s Fund Industry, Alfi, said on Tuesday. 

Financial regulators across Europe are keeping a close eye on their Luxembourg counterpart CSSF, which is reviewing its rules that tell investment firms how to handle errors in calculations of Net Asset Values, or NAVs. “I think that we may consider the CSSF approach as a best practice.”

Following 1.55 million euro in regulatory fines, Luxembourg investment firm Fuchs & Associés Finance SA is stepping up efforts to address internal compliance problems, adding additional directors and compliance staff to bring its governance back in line with legal requirements.

This week on Investment Officer Luxembourg again demonstrated that the Grand Duchy can be a source of financial stories of a surprising nature. Bill Gates’ new hotel is being financed with an alternative investment fund registered in Luxembourg.

Europe’s biggest fund manager, Amundi, is telling investors that it is time to get back into the bond market. And it believes that reports of the death of the 60-40 portfolio are greatly exaggerated. That theory merely has spent time in the freezer, said Vincent Mortier, Amundi’s chief investment officer.

“Bond is back, and not only on screen,” Mortier jokingly told journalists in a media call on Tuesday.

A reserved alternative investment fund registered in Luxembourg turns out to have played a central role in the 165 million euro financing of the Palazzo Marini, Bill Gates’ new six-star hotel in the centre of Rome, close to the Trevi fountain. The team that supported the deal from Luxembourg was at law firm Dentons, with European Capital Partners SA as AIFM.

Canada’s main pension fund, CPP Investments, has agreed to become a major shareholder in Universal Investment, a leading third-party Super ManCo in Luxembourg, by acquiring a significant stake in the firm from private equity and venture capital firm Montagu. The deal demonstrates that investors worldwide see further potential in Luxembourg’s growing asset services market.