Alfi

Luxembourg’s fund and asset management association Alfi has told Europe’s financial markets supervisor Esma that its proposed rules on the use of ESG-related names in investment fund names lack clarity and will render the marketing of these funds more difficult.

Britta Borneff, a former managing director at Fuchs Asset Management, has been appointed as the new director of events, communications and business development at the Association of the Luxembourg Fund Industry, Alfi. 

Borneff’s professional career in Luxembourg started in 1996 with Schroders where she worked in marketing and client relationship roles for more than a decade. From 2007 to 2021 she worked as head of sales and marketing at Waystone in Luxembourg. From October 2021 she served at Fuchs, a Luxembourg investment firm,

Luxembourg’s fund industry has high hopes for Eltif 2.0, the revised European regime for long-term investment funds that is set to be approved next month by the European Parliament. Thanks to the updated rules, products like private funds can be targeted directly at retail investors in all 30 countries in the European Economic Area with one single AIFM passport.

Geopolitical uncertainty, rising interest rates, more stringent sustainability requirements, modernisation of the regulatory environment, democratisation of private equity, and pressure on costs and margins are expected to shape the next twelve months in the grand duchy’s financial system. Camille Thommes, Nicolas Mackel, Jerry Grbic, Stephane Pesch, Nicoletta Centofanti and others told IO what they expect in the new year.

Luxembourg’s international status as a hub for alternative investments and private equity this year was reinforced as institutional investors sought stability as global equity and bond markets were taking a beating by surging inflation and rising interest rates.

Infrastructure investing has looked like a very good business in recent years. Initially, interest in infrastructure was due to its role as a long-term, inflation-resistant vehicle for institutional investors. But the crying need for building, repairing and upgrading the built world while most governments are short on funds has given it an almost socially-conscious image. 

Most such funds have realised they can easily more towards doing ESG-related investments. Often, it’s just about looking for the right investment option.

The spread of web-based platforms has reached into the rarefied atmosphere of private equity, which has historically been paper-based and face-to-face in-person meeting with one’s investment adviser. This is taking place against an industry-wide drive to “democratise” the private assets world, in order to sate huge desire to invest, but also to address the equity issues raised in relation to significant barriers to access, Alfi’s Private Assets Conference made clear this week. 

Financial regulators across the European Union next year will embark on a comprehensive review of costs that investment firms charge to investors for their investment funds. Claude Marx, director general of Luxembourg financial supervisor CSSF, speaking at the Alfi private assets conference on Wednesday, elaborated on some of the next steps. The industry, he said, needs to maintain its focus on efficiency, which also is in the interests of investors.

When it comes to enhancing the economic value chain in terms of sustainability, net-zero and financing the energy transition, the private assets sector is well positioned as an actor that can help deliver the changes that are needed to keep growth sustainable, a Luxembourg panel on net-zero investments was told on Wednesday. 

Real Estate Investment Funds, or Reifs, in Luxembourg saw total assets climb by 26 percent in the year running up to the end of the third quarter, to 131 billion euro. The number of Reifs increased by 20 percent to 621 funds.

The latest edition of the Reif survey conducted by the Association of the Luxembourg Fund Industry, or Alfi, showed that multi-sector allocations remain the most popular strategy for Reif investors, with 49 percent.