Events

“Climate change is not a scenario for the distant future; it’s already affecting all asset classes,” said Lisa Backes, deputy CEO of Hauck & Aufhäuser Fund Services, during the LuxFlag Sustainable Investment Week in Luxembourg. For banks, sustainability has become a strategic and regulatory issue at the core of risk management and client relations.

Luxembourg’s private debt market has been flourishing. But products that can pose systemic risks, difficulties with valuation, and potential misunderstandings of the risks involved in the market are issues lurking in the shadows.

The long-assumed stability of Europe is over. Wars on the periphery, a crumbling system of free world trade, and great powers using economic interdependence as a weapon: the continent is under pressure. “The world in which investors must navigate has become more unpredictable.”

Diversification remains the cornerstone of asset allocation, investment strategists agreed at Investment Officer’s Portfolio Day, as volatility upends assumptions about safe assets.

Just two weeks ahead of the NATO summit in The Hague, former Belgian Prime Minister Yves Leterme has sharply criticized the alliance’s proposed five-percent-of-GDP defense target, calling it a “collective irrationality” that risks overwhelming European decision-making.

Despite a US backlash, Luxembourg champions still sustainable investing through institutional support, regulatory debate, and industrial innovation.

Institutional investors remain wary of semi-liquid private funds, a sentiment that was on full display at this year’s Luxembourg Meeting for Private Markets Investments, a German-language private markets conference known as Lumpi.

While digitalisation offers efficiency and scalability, it cannot replace the trust and personalisation that high-net-worth clients expect from their private banks and wealth managers. Investment Officer’s Raymond Frenken reports from The Banking Scene event in Luxembourg.

Several chief investment officers from Dutch private banks have raised concerns about the “great danger” of consensus forecasts on US equities for 2025.

Asset managers are scrambling to rebrand their sustainable investment funds as stepped-up regulatory crackdowns on greenwashing risk deepening fragmentation in the industry, experts warned at the Morningstar Sustainable Investing Summit in Amsterdam.