Investment Officer Luxembourg

Government bonds classified as sustainable or ESG securities continued to win market share during the third quarter as more of them were issued while the total amount issued in fresh state debt in Europe  declined.

Private market investments have become overweight in institutional portfolios following this year’s substantial declines in public markets. Half of investors are waiting “as long as necessary” for this dislocation to subside. The other half is concerned, a new survey by Bfinance shows. The report is of particular interest to Luxembourg, where interest in private assets and alternative investments has increased significantly in recent years.

European Fund and Asset Management Association Efama will host its 2022 Investment Management Forum on Thursday and Friday in Brussels. Director-general Tanguy Van de Werve spoke to Investment Officer about prospects for the industry, sustainable finance as the new normal, persistent pressure on costs, and the need for financial education. 

Style risk is one of the key risks that sustainable investors need to be aware of. After all, many equity funds with a sustainable mandate tend to lean towards a growth style. Any choice of style brings the likelihood of it falling out of favour with investors over a period of time. So too this year’s growth style.

The latest round of greenwashing allegations targets Luxembourg’s banks and their investment funds. Greenpeace, presenting a mystery shopping survey, now claims Luxembourg’s financial centre is “guilty of greenwashing”.  Bank sector group ABBL challenges Greenpeace’s approach. Meanwhile, UN secretary-general Antonio Guterres has fiercely condemned private sector behaviour that uses “bogus net-zero pledges”.

By successfully closing its acquisition of European Fund Administration, Universal Investment has pushed its assets under administration by more than a fifth to above 900 billion euro in more than 7000 funds, the firm has announced. Financial details were not disclosed.

Outlines of reform proposals for European long-term investment funds (Eltif), agreed by EU policy-makers last month, have been hailed as major positive step forward by some in the industry. More quietly, though, others suggest the fundamental contradictions at the heart of the vehicle have yet to be resolved. 

Although inflation has made its comeback in Western economies after decades of oblivion (the great moderation), in public discourse on the housing market, the impact of current inflation levels is quite often ignored. In particular, people talk about the nominal price level of the housing market without looking at the real price level.