alternative investments

One of my first lessons in finance was that you cannot consistently outperform the market. When it does occur, it is the result of luck rather than skill. You are better off investing in passively managed funds than those actively run by gurus and clairvoyants.

In the Luxembourg market for Reserved Alternative Investment Funds, Dublin-headquartered investment services firm Waystone has emerged as the biggest issuer by a landslide, analysis of 2022 data by Investment Officer Luxembourg shows. The list of most active Raif issuers also includes Carne Global - the number one issuer in previous years, One Funds and Hauck Aufhäuser Lampe.

The analysis showed that Luxembourg was home to a total of about 2125 Raifs at the end of last year after adding some 472 new funds during 2022.

An extrapolation of Preqin’s global projection for private capital demand to Luxembourg suggests the grand duchy’s private and alternative investment market could add more than 1000 billion euro in private capital during the coming years.

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.

Economic insecurities on a broad scale are increasingly impacting the decision making of institutional investors. With continuously high volatilities in equities and, as an effect of rising interest rates, even in the bond markets, they look at illiquid assets, or alternative investments that can offer solid cash flows and long-term returns.

An American early-stage fintech named Pontoro recently pitched in Luxembourg its development of an innovative new digital assets platform that makes infrstructure investments more liquid, and thus less difficult to finance.

An alternative investment vehicle that relatively swiftly established itself in Luxembourg continued to become more popular last year, an analysis of data filed with the country’s business register shows. If growth continues at the current pace, Luxembourg will be home to more than 2,000 such funds, known as Raifs, by the end of this year.

Investors are increasingly turning to alternative instruments for diversification, risk mitigation and to future-proof their returns, especially given today’s market conditions. This has resulted in surging interest in alternative investments from a wider variety of market participants, which is forcing the alternative asset servicing industry to adapt to new demands. 

Goldman Sachs has struck a tremendous blow with its takeover of NN Investment Partners, the asset management arm of Dutch insurer NN Group, which was announced a few days ago.