Raymond Frenken

Amidst heightened regulatory scrutiny, Luxembourg’s private investment fund landscape experiences a transformative shift in valuation paradigms, a panel discussion on Wednesday made clear.

Brussels has opted to abandon the proposed establishment of a ‘European passport’ for depositary banks. While initially touted as an innovative concept, the idea was fraught with potential market challenges and risked undermining the work of supervisors. The alternative approach that has emerged now is being hailed as a success by Luxembourg banking association ABBL. 

Luxembourg’s financial regulator CSSF has updated its guidance for the crypto investment landscape, clarifying that only ‘well-informed investors’ within alternative investment funds can tread into the virtual asset territory.

Luxembourg’s lawmakers are making strides in proposals aimed at alleviating the tax burden on actively managed Exchange Traded Funds (ETFs), aligning their fiscal treatment with that of standard passive ETFs, a senior industry voice made clear on Tuesday.

In comparison to some other European countries, including Luxembourg and Germany, investors in the Netherlands appear hesitant to embrace the new generation of Eltif funds at the moment. Questions to private banks and wealth managers in the Netherlands reveal a restrained level of enthusiasm.

Imagine a groundbreaking European savings and investment product, open to all 450 million individuals across the European Union, supported by a harmonised tax incentive endorsed by every EU member state. Wishful thinking? Probably so, but maybe not.

Although fundamentals remain weak and carbon prices are half of what they were a year ago, market participants said a fresh round of global tensions could drive up natural gas prices and potentially trigger a short squeeze in the carbon market.

Protracted discussions over the EU’s new regime for European Long Term Investment Funds, known as Eltifs, are delaying the launch of new funds for these private asset investments.

Switzerland is preparing to step up competition with Luxembourg as a fund domicile for alternative investment funds. The industry, however, is not convinced that the Swiss alternative can fully match the international success of Luxembourg Raifs.

From next month, the Swiss will allow management companies to create a new type of fund known as L-QIF that will compete with the successful regime for Reserved Alternative Investment Funds, or Raifs, first made possible in the Grand Duchy in 2016.

Berlin-based Moonfare said it plans to create a dedicated secondary liquidity mechanism that enables retail investors in Eltif 2.0 funds to unwind their holdings before the fund matures.