Luxembourg for Finance

Luxembourg retained its lead last year as the biggest global hub for sustainable investment funds. Nearly half of all ESG assets in Europe now have a home in Luxembourg, according to LFF, while the appeal of the Luxembourg Green Exchange continues to grow.

As digital assets are in focus for investors, there is a less visible, less shiny side to at least the Bitcoin story. While the total potential number of Bitcoins is fixed at 21 million, they haven’t all been created yet. New Bitcoins can be ‘mined’ through power-intensive computer analysis, which has a significant carbon footprint, according to Marion Laboure, senior economist at Deutsche Bank in London. There’s also a contrasting view, as set out by US-based portfolio manager Mark L. Casey at Capital Group.

Luxembourg companies from small to large are taking strides in the realm of virtual assets. This market is still under construction and regulatory and infrastructural elements are still pending. Several companies were represented at the recent Luxembourg For Finance Digital Capital Raising webinar, along with a representative of Luxembourg’s financial regulator CSSF.

Nicolas Mackel, CEO of Luxembourg For Finance, speaks to us about Luxembourg’s role as a home for global funds, Brexit, EU cooperation, global competition, and the challenge to attract talent.

It may be only 8 years away, but many representatives of Luxembourg’s financial centre have clear visions of a 2030 of higher technology but also a commitment to ESG values, but which may be a challenge to bring about.

SFDR and the green investing taxonomy have been broadly well received across Europe, but what if other economic powers adopt contradictory rules? Some signs of action are emerging from global discussions.

Financial services firms have paid attention as a variety of mostly-American-owned digital companies have gained increasing market share, a trend that has increased notably during the Covid-19 pandemic.

Since Amazon is one of the best-known of these firms, those who want to emulate its success have dubbed the process “Amazonisation”, a concept explored in more detail by a Luxembourg for Finance session held earlier this year.

Yesterday we saw how Luxembourg is playing a significant role helping international investors gain exposure to the Chinese market. Yet what about the movement in the other direction, as Chinese investors seek to diversify into other markets? This question was explored by a panel of locally-based experts at Luxembourg For Finance’s China Finance Forum 2021.

Quietly, Luxembourg has built substantial fund investment access to the Chinese market. This was highlighted at the “Access Channels” roundtable at Luxembourg for Finance’s China Finance Forum 2021. With Chinese markets being some of the fastest growing in the world, little wonder the appeal to global asset managers of this market via the Luxembourg route is strong.

EU-UK relations regarding financial sector regulation are liable to be fraught and driven by political considerations over the medium term. A Luxembourg For Finance (LFF) seminar on 23 February explained why equivalence measures cannot replicate the access and predictability of a full financial services passport.