Luxembourg Funds Intelligence Briefing
7th October 2019
Topics
Asset Management
Fund Services
Regulation
Brexit

Luxembourg’s fund industry assets reached the symbolic milestone of €4.5trn in domiciled assets under management at the end of August, on the way toward the goal cited by ALFI chairwoman Corinne Lamesch of €5trn. So far this year much of the growth in industry assets has come from the rebound in financial markets rather than net new investment, but in August new fund subscriptions accounted for more than 100% of the monthly growth as stock markets drooped.

— Simon Gray, Editor in Chief

Asset Management
Luxembourg fund net assets pass €4.5trn in August

The aggregate net assets of Luxembourg-domiciled investment funds increased by €17.72bn in August to a total of €4,502bn, an increase of 0.4% during the month and 5.39% over the previous 12 months, according to the CSSF. The sector saw net inflows of €28.6bn during the month, more than outweighing a €10.9bn decline in asset value due to financial market movements.

Best source: Luxembourg Chronicle
Capital Group launches Luxembourg-domiciled UCITS fund

US asset manager Capital Group has launched a Luxembourg-domiciled UCITS fund, Capital Group World Growth and Income, targeting investors in Asia and Europe. The fund, which will invest in dividend-paying companies that offer attractive growth prospects, will be managed by the investment team that runs the Capital World Growth and Income in the US, which was launched in 1993. Capital Group has $1.9trn in assets under management.

Best source: Funds Global
Fund Services
Prestige Funds lists another Luxembourg-domiciled fund on Euronext Dublin

Prestige Funds has listed the Prime Alternative Finance Fund on Euronext Dublin, the second Luxembourg-domiciled fund it has listed on this exchange. The Luxembourg SIF invests in a portfolio of secured loans to UK-based agricultural businesses, in addition to assets in the Netherlands, Ireland and the US. Launched in 2018, the fund has around $50m in assets under management.

Best source: Wealth Adviser
Regulation
UK regulator calls for clear disclosure of liquidity risk by fund groups

The UK's Financial Conduct Authority has called for clearer disclosure of liquidity risks by fund groups in the wake of problems at the Woodford Equity Income Fund, which was forced to suspend withdrawals in June due to its inability to meet redemption requests. The regulator says fund groups should be clear with investors about the risk of withdrawals being frozen if the investment portfolio includes hard-to-sell assets. The FCA has also released rules for open-ended funds with real estate holdings that may be extended to the broader fund industry.

Best source: Financial Times (subscription required)
See also: Reuters
Innpact receives AIFM authorisation for impact finance

The CSSF has authorised a subsidiary of the impact finance consultancy firm Innpact to act as a third-party alternative investment fund manager. Innpact Fund Management will offer portfolio and risk management services to investment managers and advisors investing in private equity and private debt with the purpose of creating sustainable and measurable social and environmental impact, the company says.

Best source: Delano
Brexit
Luxembourg ranked fourth for Brexit banking relocations: Helaba

Luxembourg City is the fourth most popular destination for banks seeking a post-Brexit base in the EU, according to a study by Germany's Landesbank Hessen-Thüringen. The authors say eight banks have chosen to relocate operations to the grand duchy, compared with 31 to Frankfurt, 11 to Paris, nine to Dublin, and five to Amsterdam. Helaba estimates that Brexit will see the creation of 3,500 new jobs in Frankfurt by 2021, compared with a current banking workforce of around 65,500.

Best source: L'essentiel (in German)
See also: Landesbank Hessen-Thüringen (in German)
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