Alfi

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.

Luxembourg’s fund industry supports the introduction in new EU retail finance legislation of more lenient ‘opt-up’ criteria for retail clients that would give them the same status as professional clients. At the same time, it opposes the creation of a new category of semi-professional investors.

Although its overall market share contracted slightly, Luxembourg last year held on to its number one spot among Europe’s top 10 investment hubs for both Ucits and Alternative Investment Funds, with a market share of 26.8 percent, compared to 27 percent that was reported for the previous year, according to the latest annual reported released by the Association for the Luxembourg Fund Industry, or Alfi. Ireland’s share of the pie increased to 18.6 percent last year from 18 percent reported for 2020. 

In Luxembourg, international law firm Clifford Chance this week announced the promotion of two of its counsel and the appointment of nine senior associates, while industry group Alfi has hired a new head of communications from PWC Luxembourg.

Funds exposed to the Ukraine war have new liquidity management options following the recent publication of the CSSF’s guidance. To understand more about how the market is adapting , particularly during the current annual reporting season, we spoke to Nicolas Hennebert, partner and investment management leader audit & assurance at Deloitte Luxembourg.

In this second podcast from Alfi’s 2022 European Asset Management conference we enlighten you with valuable insights on what’s happening in Luxembourg’s asset management ecosystem. You will hear about Luxembourg’s new securitisation law, about collateralised loan obligations, about plans for the European Long-Term Investment Fund, known as ELTIF, as a new type of collective investment framework. 

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. 

Financial sanctions against Russia and the exposure of investment funds to Russian assets were widely discussed at the 2022 European Asset Management Conference in Luxembourg, hosted by the Association of the Luxembourg Fund Industry, or Alfi, on 22-23 March.

The popularity of digital assets will lead to significant changes for the financial industry, including within the area of asset custody. Today’s global custody industry goes back to regulatory changes in the 1970s. Digital assets, the most well-known being Bitcoin, differ in several ways from traditional assets, including the role of information technology, specifically of private key management, which will be accompanied by potential regulatory differences.

The Luxembourg fund industry was given its ESG marching orders last week by CSSF CEO Claude Marx at the Alfi European Asset Management conference. “I am sometimes irritated by those who over inflate small issues or imperfections in this area,” he said.