Assets under management of Luxembourg-domiciled investment funds have amounted to €3.74trn as at 31 December 2016, establishing a new record. The figure has risen by 6.7% year-on-year.
Denise Voss, chairman of Alfi, commented: “These record figures and the strong net sales that we continue to see demonstrate that Luxembourg remains a preferred global fund hub (…) 2016 was a challenging year in many respects.
“First the UK vote to exit the EU has brought uncertainty to cross-border distribution in Europe, with the possible loss of both fund and fund manager passports for UK asset managers. Second we have seen the threat of US protectionism with the election of Donald Trump..”
Voss highlighted that these challenges can be source of opportunities as asset managers from the UK and those using the UK to access investors based in the European Union will have to domicile their funds in an EU member country.
“We have already had confirmation that M&G, one of the largest UK asset management firms, is seeking permission from the Luxembourg authorities to launch a new Ucits fund. We understand other firms will make public similar plans in the next weeks and months.
“We are also seeing opportunities brought by digitalisation and the growth of fintech companies. Online investment is slowly but surely continuing to grow, robo advice is developing and, as a result, we have to change our way of working, not only to facilitate these new technologies and distribution platforms but to take advantage of the efficiencies digital technologies can offer our industry,” Voss said.
Alfi has plans to promote the Luxembourg domicile and global fund hub in Asia, Australia, the US and the LatAM region this year.
The association has negotiated an exemption with Australian regulator for financial services providers regulated by the CSSF, from the obligation to hold an Australian license to provide financial services in Australia.
This is aimed to enable Australia’s institutional investors, including superannuation funds, to get easier access to Luxembourg Ucits.