Alfi

The exact impact on private asset values of this year’s declines on global stock and bond markets has yet to be determined, but already some family offices are concerned about the shifts in their portfolios. “There are capital calls that have not been met,” a UBS banker told the Alfi conference on Tuesday.

​​​​​​​Ambitions to build on Luxembourg’s global hub status for investment funds to make this country a global fund distribution centre are being held back by differing national approaches on regulations as well as prudential rules, despite efforts to harmonise European legislation and the EU’s cross-border fund framework. 

Young investors are seen as a bit of a wild card by the investment industry. But look closely and it’s obvious that many young investors are fundamentally cautious due to their financial circumstances, while sympathising to a greater or lesser extent with rebellious social media elements intent on taking the financial industry down a notch or two.

We’re finishing a productive week at Investment Officer Luxembourg in terms of news stories, with surprisingly strong and growing interest from international readers.

This IO Talks Luxembourg podcast episode with Corrine Lamesch, chair of the Association of the Luxembourg Fund Industry (ALFI), sheds light on the growing popularity of alternative investments in Luxembourg, addresses the complexity of ESG and sustainable finance regulation, and hears about the role of the grand duchy as a global distribution centre for financial products.

The fund management industry can counter reputation risks posed by the increasingly complex regulatory requirements for sustainable investments with a bigger effort to boost investor education, a top executive at the Association of Luxembourg’s Fund Industry, Alfi, said on Tuesday. 

One month after the EU ordered the investment sector to ask clients for their sustainability preferences, investment firms appear to show limited enthusiasm for complying with the new requirements as complexity around the EU’s ESG rules persists and greenwashing fears linger.

Swing pricing “has become common market practice” in the Luxembourg fund sector to manage liquidity at times of volatility in the market, according to a recent industry survey by the Association of Luxembourg Fund Industry.

Five representatives of the financial services sector in Luxembourg have been named as members of working groups and specialist advisory committees of the European Securities and Markets Authority, or Esma. The new composition of the committees was made public on Friday and includes about 200 names.

The sustainable fund market in Luxembourg and other European fund domiciles has continued its strong growth of recent years, but the short-term impact of the Ukraine war has already disrupted the move to a green future. Still, positive developments are expected in the longer term.  The latest updates were set out in the 2022 edition of the European Sustainable Investment Funds Study by Zeb and Morningstar on behalf of the Association of the Luxembourg Fund Industry.