In 1908, there were 16,000 Luxembourgish immigrants living in Chicago. They were extremely poor and needed to emigrate to survive. Today, people emigrate to Luxembourg for different reasons. It’s more about thriving rather than surviving.
Without immigration, there would be no fund industry, there is a constant need to attract talent from abroad. Amazingly, only 20% of the local population works in the private sector. Probably even less in the fund industry.
Luxembourg has the second largest fund industry in the world and is ranked as the 6th leading financial center in the EU by the Global Financial Centres Index (GFCI 32). A true success story for such a small country.
Ranked first
The government and various industry bodies are heavily engaged in marketing our industry abroad and this has been successful. According to the Global Talent Competitiveness Index (GTCI), Luxembourg is ranked 1st place in the world for attracting talent.
New arrivals share positive reviews Luxembourg for Finance’s website:
“When I’m not working, I enjoy visiting the Moselle. I love the open landscape and the beautiful views. I come here to walk along the river, have a drink and clear my mind. Having that in this country is an amazing experience.” Group Head of Information Security.
“We like the fact that our children will be classmates with people from all over the world due to the international environment.” Managing Director & Conducting Officer.
“From the day I started, it took me five weeks to complete the paperwork related to my work permit and visa.” Business Analyst.
They appreciate the quality of life, multilingualism and environment that Luxembourg provides.
It’s not all roses though.
Housing
Grumbles can be heard in our offices by the water cooler, after work on the terraces and constantly on social media. The complaints are twofold, housing is extremely expensive and the country is perceived as being BORING.
Not great for attracting talent.
The housing crisis is particularly acute in Luxembourg City. Set aside around one million euro to buy a house or apartment. And expect to pay anywhere between one to five thousand euro for rent. A challenge regardless of how much you earn.
Commuting from outside of the city is extremely common but it is not for everyone. It is quite hard to integrate when you live in a village. Besides, housing costs are only slightly lower than in the city.
Whereas Luxembourg is mainly specialized in fund administration, jurisdictions such as New York and London offer a broader range of financial services. They specialize in front-office, revenue generating activities which many consider more appealing than repetitive back-office tasks.
Furthermore, these cities are also perceived as being trendy places to live. Not something that Luxembourg is usually associated with. In terms of culture, arts, museums, restaurants, education and nightlife; these cities are buzzing.
Great for attracting talent.
Front office
Luxembourg is a great place to live and work. However, things need to improve for the fund industry to continue to attract talent. The perception of the country as being boring needs to be improved, the housing situation needs to be solved and we need to bring the front office to Luxembourg.
We should manufacture and sell funds, not just administer them.
P.S. Luxembourg is my home. I’ve grown up here and I love it. Most cities struggle with housing and anywhere is boring if you don’t make an effort!
Gregory Kennedy is a columnist for Investment Officer Luxembourg. His columns appear on Wednesdays. He also works as business development manager at Finsoft Luxembourg.