Luxembourg is the leading domicile for Ucits-regulated funds, holding about a third of the total market, more than twice as much as number two Ireland. But for alternative investments funds, which are regulated under the Alternative Investment Fund Managers Directive (AIFMD), Luxembourg only comes second after Germany.
“At the moment, almost 90% of the funds we domicile are Ucits-regulated funds,” says Marc Saluzzi, the chairman of the Association of the Luxembourg Fund Industry (Alfi). “Ideally, we would like to lower this to 70%, with 20% consisting of alternative investment funds and the remaining 10% for sustainable investment funds.”
From multinationals to NGO’s?
When it comes to the latter category, Saluzzi is thinking aloud. “SRI-labelled funds, funds which focus on impact investing and microfinance funds are the sort of fund we would like to attract,” he says. The commitment of Luxembourg’s government to spend at least 1% of GDP to development assistance could help here, the Alfi-chairman thinks. “We suppose this could assist in attracting NGO’s to set up their headquarters in Luxembourg.” This could in turn persuade asset managers to domicile their sustainable investment funds in the Grand Duchy, according to Saluzzi.