Investment Officer Luxembourg

European private equity investors have become more cautious during recent weeks following the collapse of Silicon Valley Bank and Credit Suisse. Appetite for alternative investments however remains strong while some investors embrace the ‘dislocation’ in the market as an opportunity. “If you’re selective, you can even do better than expected.”

Panic over banks and falling treasury yields have gold prices flirting with an all-time high again. In the short term, a quicker turn by the Federal Reserve may be the deciding factor, but the precious metal’s real success lies deeper. “Gold deserves a structural role in the portfolio.”

Gold prices briefly climbed past the 2,006 dollar per troy ounce level last week. With that, the August 2020 all-time high of 2,075 per troy ounce is getting closer.

This edition of IO Talks Luxembourg hears from the managing director at M&G in Luxembourg, Micaela Forelli, on the firm’s positioning in the European funds market, on private markets and Eltifs, on cost savings and how the firm’s redundancy programme at M&G group is affecting its Luxembourg business.

The data science revolution is sweeping the investment industry. Some firms are looking to create an in-house solution combining artificial intelligence, machine learning and data science. Picking the right data set, and separating the wheat from the chaff, is critical. 

BTG Pactual, the largest investment bank in South America, said it acquired Luxembourg-based private bank FIS Privatbank in a move that should enable its Latin American clients to diversify their investment portfolios in developed countries while expanding its European client base beyond Portugal, Spain and the UK.

The focus on sustainable investing has faded somewhat, with the drumbeat of crisis after crisis recently, and now problems with banks in Switzerland and the United States grabbing the headlines. But listen to anyone focussed on the climate for long and you’ll realise that however bad things are now, it will get much worse. Large investment firms are developing impact investing projects and reaching for the next level in ESG – maintaining biodiversity.

Green bonds are becoming mature and are a good diversification in a portfolio because they provide above-average transparency, according to Julien Bras (photo), bond manager at Allianz Global Investors. 

Bras argued that green bonds are an interesting way to get more diversification in bond portfolios. “The main argument for me to include green bonds in portfolio is their transparency compared to traditional bonds.”

As Investment Officer knowledge partner, Universal-Investment’s Luxembourg country head Sofia Harrschar argues that reforming the EU regulation on social security would be in the interest of Luxembourg’s financial services sector and the many thousands that it employs. The industry meanwhile, needs to adapt quickly, look across the border and develop new ways of working.

Total interest income at Luxembourg’s 120 credit institutions last year surged 39 percent as most banks were able to boost their margins from borrowing and lending activities on the back of higher central bank interest rates, according to data posted by financial supervisor CSSF. The supervisor also said, like last year, that 23 banks in the grand duchy were not profitable.