Luxembourg
06 February 2018
Reporter: Jenna Lomax

ALFI: 2018 will bring opportunities, but also challenges


The Luxembourg fund industry had a very good year in 2017, and 2018 brings plenty of opportunities, according to Denise Voss, chairman of The Association of the Luxembourg Fund Industry (ALFI).

In a report from ALFI, released on 1 February, Voss stated that although it's been a very good year, Luxembourg funds “still face challenges particularly in regard to regulation”.

Voss said: “[Regulation is] important and our efforts to make sure that regulation works in the interest of both the investor and the asset manager alike is a fundamental part of ALFI’s mission.”

At the end of November last year, assets under management grew 12 percent, with an increase of €458 billion over the last 12 months.

Since last January, ALFI reported that 73 percent of the growth in assets under management was from new money being invested into Luxembourg funds.

Most of the funds were UCITS, but other money was put into alternative strategies such as private equity and real estate, with the remaining increase due to the impact of global markets.

At the end of September, ALFI reported that 32 percent of new investments into European funds since January 2017, were invested into Luxembourg-domiciled funds.

Voss explained that the plan to introduce a pan-European personal pension product, a pick up in sustainable finance, and the development of new technologies were the most successful elements of 2017.

In the report, ALFI revealed some of its priorities for the year, which included its distribution opportunities worldwide as it celebrates its 30th anniversary.

It stated that another priority was to make the most of the European Commission’s plan to create a Capital Markets Union (CMU), of which Voss said: “The CMU should help investors have access to a larger choice of investment solutions.”

ALFI also touched on the importance of sustainable finance and responsible investing going forward into the new year and that in 2018, ALFI would continue its interaction with fintech players to monitor and develop regtech and blockchain tools, which it claimed will reduce costs and increase efficiency.

When discussing the hot topic of Brexit, Voss said: “ALFI follows the Brexit negotiations with interest.”

“The City of London is Europe's leading financial centre and will remain so for years after Brexit. Its interconnection with the EU's financial and economic system is undeniable and future relations with the UK should be determined in this light.”

She added: “Luxembourg has a long standing working relationship with the UK, evidenced by the fact that over 17 percent of assets under management in Luxembourg funds are managed by UK asset managers. Our efforts will focus on how we can continue this constructive relationship even after Brexit.”

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