Sector

Artificial intelligence (AI) is reshaping the financial landscape with promises of efficiency, innovation, and superior decision-making capabilities. However, as the European Securities and Markets Authority (Esma) warned this week, the integration of AI in investment services comes with significant risks. Like a double-edged sword, AI’s greatest strengths can become its most dangerous liabilities if not handled with care.

Banks and asset managers continue to make misleading sustainability claims, according to the European Securities and Markets Authority, Esma. Following an investigation into the compliance of marketing communications with MiFID II rules, Esma found that financial products and services are often presented as green without substantiating the sustainability claims.

This week’s overview of transfers, appointments, promotions and other people news includes updates from Universal Investment, Gen II Fund Services, Deloitte and JP Morgan.

British-American multinational insurance services provider Willis Towers Watson (WTW) is preparing to launch its first Luxembourg-based private equity fund in the coming months. The firm has already has secured over 500 million euro in commitments. The move follows WTW’s recent announcement of a UK private equity fund.

In an unstable investment environment with wars and crises looming worldwide, contradictory inflation data as well as insecurity regarding interest rate development, alternative investments have evolved into a diversifying and stabilising element of institutional portfolios – and will continue to do so.

The European Securities and Markets Authority (Esma) unveiled a new initiative this week aimed at making investment opportunities more accessible across the EU. At the heart of this plan is a new “basic and simple” EU investment product label, intended to simplify and streamline choices for retail investors.

Speaking at an ALFI event in New York, the U.S. Securities and Exchanges Commission, SEC, and Luxembourg financial supervisor CSSF have jointly voiced significant concerns about “increasingly complicated fee structures” in the fund industry, warning that these practices may be obscuring the true costs for investors. 

Emmanuel Gutton, a well-known legal expert in Luxembourg who until recently served as deputy CEO at the Association of the Luxembourg Fund Industry (Alfi), has joined New York-headquartered law firm White & Case LLP as funds partner. 

Gutton will advise on the creation, structuring and conversion of funds across a wide range of asset classes including private equity and real estate. The firm said he will also assist in setting-up and advising investment fund managers. 

Brendan Ballou’s book “Plunder” exposes how private equity firms, like Carlyle, harm businesses and evade legal responsibility, despite promising high returns. In this interview, Ballou discusses the alarming frequency and impact of these practices.

The latest edition of the Boston Consulting Group’s (BCG) Global Asset Management Report provides a stark portrait of today’s asset management industry. Despite a robust 12 percent growth in global assets under management, reaching a formidable 120.000 billion dollars in 2023, the sector faces significant headwinds. Rising costs, eroding revenues, and the fading allure of traditional asset management approaches paint a troubling picture.