The Luxembourg investment fund industry has maintained its assets under management slightly above 4,000 billion euros in 2018. The 2.28% decline over one year is due to a "difficult and volatile context" and "A volatile market environment," said Denise Voss, president of the Luxembourg Association of Investment Funds (Alfi), on Wednesday at a press conference.
Brexit has contributed to this instability, even if the first effects are positive for the Luxembourg market. 41% of the new investment funds created in the Grand Duchy last year were by UK players and 17% to 18% of additional assets came from the United Kingdom. Twenty-three companies from Great Britain, active in asset management, have also demonstrated their relocation or the development of their activities in Luxembourg. "It has to be sustainable and we need to see how to continue to work with these managers and offer them solutions," said Denise Voss. The position of the Financial Sector Supervisory Commission (CSSF) in Luxembourg, which indicated that cooperation between the two markets would be maintained, was welcomed.
In this unstable context, nothing to panic, reassured the president, the fundamentals remain strong. The Luxembourg market remains the first in Europe and the second world behind the United States. Among the reasons for satisfaction, 45.4% of the € 231.8 billion "fresh money" invested in funds in Europe, have been in products distributed from Luxembourg. The position in alternative funds is strengthening (11.6% of the European market, 4th position), with dominance in the cross-border distribution segment.
Sustainable finance will be "the priority for 2019," said Anouk Agnes, deputy director of Alfi. "As pioneers, we already see the benefits on the spot. We are already number 1 in Europe (note: with 31% of funds and 39% of assets under management on 476 billion euros). The European Commission is active on the subject and our position allows us to influence the debate. Transparency influences investor confidence and the texts under discussion focus on this topic. We must fight against the green-washing, which is to say that funds are "green" when this is not the case, "she says.
Disagreement on the subscription tax
The Alfi is broadly in line with the new finance priorities of the new government: sustainable finance development, regulatory and compliance excellence, more presence in European institutions, market promotion strategy, education financial and investment in research ... But a disagreement remains on the subscription tax, paid by investors, that the Alfi would like to see lower, which is not expected. The Alfi sees a problem of competitiveness. "On some low-cost products, we reach a somewhat unbearable tax. For some market players, the tax becomes a ball that may leak. There are relocations or relocations of this type of products, these are signs that must be interpreted, "warned Freddy Brausch, Vice President, who advocates an in-depth analysis of the tax, depending on the products and categories investors.