Ceri Jones, Global Investor/ ISF:
has Luxembourg’s position versus other financial
centres changed over the last year? Can it repeat its UCITS
success with AIFs?
Marc-André Bechet, head of legal and tax
affairs, ALFI: It’s fair to say
that 2015 was a good year for the Luxembourg market. The growth
of assets was slightly above 13%, with 72% of that coming from
net subscriptions. Growth on UCITS and AIFs together
accounted for 41% of net subscriptions for the European market.
Luxembourg’s historical market share of UCITS is
36%, so that 41% means an increase in our market share. On AIFs
we have a slightly lower market share, which is explainable by
the fact that traditionally these funds are rather domestic
funds, so you see countries such as France and Germany leading
I would say, yes, we can repeat the success of UCITS with
AIFs, for several reasons. In terms of net sales in 2015, we
had a market share of 22% for Luxembourg AIFs in Europe, which
is again growing our market share. I would not like to predict
2016 because markets are so bumpy, but last year is a good
place to start. Of course, on the management company side, we
have a tremendous presence of Luxembourg UCITS ManCo, and these
ManCos have traditionally moved into the alternative space and
transforming the licences into what we call a Super ManCo,
looking at UCITS and AIFs.
What are the legal reasons for the success of UCITS
and AIFs in Luxembourg?
Claude Niedner, partner at Arendt &
Medernach: We have to distinguish between the
UCITS and the alternatives side. On the UCITS side, Luxembourg
is the leading European jurisdiction, and Luxembourg UCITS are
recognised as the reference for cross-border international
distribution. UCITS is a more mature market, but from time to
time we still see additional asset managers bringing funds to
Luxembourg, either new funds, re-domiciling funds or launching
new funds. Some Channel Islands funds are coming over, which
have more a retail-distribution approach. Recently, we had a
Danish initiative coming to Luxembourg, but it’s
generally a mature market.
On the alternatives side, Luxembourg can grow significantly.
For me, the most important point was that the Alternative
Investment Fund Managers Directive (AIFMD) created a European
passport for distribution of alternative investment funds for
professional investors in Europe. What created the success of
Luxembourg was having European passports for distribution. We
are recognised as a pan-European fund distribution centre, and
even though France and Germany have quite a significant role,
going forward, this international, cross-border component will
become more important.
Ewald Hamlescher managing director of GAM
(Luxembourg): AIFs will take time gaining as
prominent a role as UCITS, which are clearly a marketdominant
brand that Luxembourg has disseminated globally. But I think in
the AIF space, though we have more competition, there is clear
and strong potential, definitely.
What other innovations have there been in
Bechet: We have always been at the
forefront of innovation in terms of legal structures, covering
the needs of any European asset manager, be it German or
French, and more recently, the Anglo-Saxon world, because we
have introduced the limited partnership and special limited
partnership regimes, which are geared to asset managers in the
alternative space. But we have also traditionally had umbrella
funds for maximum flexibility. Other centres are copying what
we’re doing, but we have the lead. Maximum
flexibility for asset managers and promoters is, of course, a
key consideration in terms of innovation.