Raymond Frenken

The increasingly stringent EU regime for green finance was discussed in Paris on Wednesday at the World Pensions Council conference. Pension fund APG believes that the EU approach has introduced “commercial incentives to go dark green”, exposing the industry to greenwashing. “I am not convinced that all the rules and regulations get the industry to do the right thing,” said Gert Dijkstra, senior managing director at APG.

Germany has unexpectedly reported its first trade deficit since 1991. The reversal of the trade balance in Europe’s largest economy shows how difficult it is for German companies to handle rising costs of oil and gas. Economists at ABN Amro and Nomura meanwhile expect Europe will enter into a recession.

In Luxembourg’s financial sector, ‘the new Ucits’ is an informal but widely recognised label that stands for innovation and promising change. It refers to the success of its 1980s investment legislation that offered European passports to Ucits investments funds, sparking a multi-decade boom in the financial sector, turning Luxembourg into Europe’s leading hub for investment funds and replacing the steel industry as the country’s main economic driver.

Private Equity in the coming years is set to attract a wider range of investors, in particular those who are considered High Net Worth Individuals. But the expansion of what still largely is seen as a private club does not come without risk, a conference organised by the Luxembourg Private Equity Association has heard.

Luxembourg’s post-Brexit boom in financial sector relocations and foreign direct investment is over, according to an EY study on the Grand Duchy’s attractiveness that was released on Tuesday.

In an interview with Investment Officer, Nobel Economics Prize winner Daniel Kahneman, speaks about making decisions. His theory, which also holds value for the financial sector, has demonstrated that our decisions are often flawed, biassed and inaccurate. “If people made better decisions, the world would be a better place.”

Luxembourg has witnessed that European integration still has its limits, even when war rages on Europe’s doorstep.

As world markets digested the Federal Reserve’s rate hike and the ECB’s emergency meeting, finance ministers of the 19 eurozone countries met at the EU conference centre on the Kirchberg plateau in Luxembourg and passed on an opportunity to further integrate financial services. Plans to complete Banking Union, first agreed in 2013, are now sent back to the drawing board. 

Although its overall market share contracted slightly, Luxembourg last year held on to its number one spot among Europe’s top 10 investment hubs for both Ucits and Alternative Investment Funds, with a market share of 26.8 percent, compared to 27 percent that was reported for the previous year, according to the latest annual reported released by the Association for the Luxembourg Fund Industry, or Alfi. Ireland’s share of the pie increased to 18.6 percent last year from 18 percent reported for 2020. 

At Apex Group, present in Luxembourg also with management companies such as FundRock and LRI Invest, each new acquisition and partnership announcement marks a waypoint on its long-term strategic journey. That journey still has some way to go, Apex’s founder and CEO Peter Hughes said in an interview with Investment Officer. “In terms of what the potential is, half-way certainly feels about right.”

It’s not difficult to compare today’s era to the 1970s. An energy crisis, a hot war, a cold war, persistent inflation, soaring interest rates, rising house prices. Even Abba, with its flared trousers, is performing again, albeit as a hologram. For investors, a rerun of the 1970s would require a profound rethink.