Raymond Frenken

Luxembourg’s financial supervisor, releasing its eagerly anticipated guidance for investment funds exposed to Russia, has outlined a range of segregation options to handle stranded assets in Russia. Funds also were reminded to assess if they are potentially in breach of sanctions against Russia and Belarus. 

New options for trading securitised debt products are available in Luxembourg after its parliament approved long-awaited amendments to its securitisation law. In an interview with Investment Officer, Harneys’ counsel and securitisation lawyer Massimiliano della Zonca sees it as a game changer for the Grand Duchy. 

Tech advisory and investment firm GP Bullhound on Monday said it is opening an Luxembourg office after the national supervisor gave a green light to application for a licence as Alternative Investment Fund Manager, or AIFM. In parallel to the Luxembourg launch, the company is opening a new office in Zurich.

Fierce competition has emerged in the changing data landscape for investment funds, and Luxembourg is the finding itself at the centre of attention. The Frankfurt and Luxembourg stock exchanges now confront each other face to face in the grand duchy, while the Paris bourse has thrown its towel into the ring and is back on the sidelines. 

Fund data specialist FE fundinfo, partly owned by the Luxembourg Stock Exchange, said it has reached an agreement with Euronext to acquire French fund data provider Funds360 for an undisclosed amount. The deal expands its geographical presence in Europe and Asia. 

Although there is some room for improvement, liquidity risks in corporate debt and real estate investment funds do not pose any substantial risk for financial stability, the EU’s top financial securities markets regulator said on Wednesday.

Luxembourg has frozen some 2.5 billion euro in Russian assets, mostly held in shares, bonds and bank accounts, as part of the international sanctions against Russia, its finance minister told a parliamentary committee on Tuesday.

The frozen funds relate to sanctions that have been imposed since Russia’s invasion of Ukraine on 24 February and do not consider sanctions that existed beforehand, the minister said. 

Deutsche Börse Group is taking over Luxembourg-based fund data specialist Kneip Communication S.A. for an undisclosed amount in order to expand its offerings in the data services space and to develop an international fund data hub based in the Grand Duchy.

This partnership forms the basis for creating a leading fund data hub based in Luxembourg, the companies said in a joint statement.

Corinne Lamesch, chair of the board at the Association of the Luxembourg Fund Industry (Alfi), speaks to InvestmentOfficer.lu for a podcast about current challenges facing the asset management industry, specifically in dealing with investment funds exposed to Russian assets and the implementation of sanctions against Russia, and in sustainable finance and ESG.

Even as limited trading resumed on Moscow’s exchange on Thursday, prospects for emerging market funds exposed to Russia remained cloudy as determining accurate asset values continued to be nearly impossible. Fund managers now await guidance from financial supervisors before taking next steps on suspended funds.