Because our clients have very different needs, our teams are organised around five major industries: Alternatives, Asset and Wealth Management (AWM), Banking, Industry & Public Sector (IPS) and Insurance.
Our Alternatives practice experienced an incredible growth of 18.5% in our turnover. When it comes to the Luxembourg Alternative Investments market in 2020, we counted EUR 815 billion in regulated Alternative assets and EUR 863 billion at the end of June 2021. The country ranks fourth as a domicile destination for Alternative Investment funds in Europe and experienced one of the largest growths, behind Germany, the UK and the Netherlands, accounting for 12% (+2pp) of total Alternative Investment funds assets in Europe (source: ESMA Annual Statistical Report, April 2021).
Our Alternative Investments practice experienced a significant increase in terms of resources and number of clients in 2021, which resulted in the industry generating the largest revenue increase for PwC Luxembourg. In addition, we have the largest Alternative Investment practice in the country, which we cultivate by implementing continuous digital and business upskilling for our teams. Moreover, the Alternative Investments practice has developed strong relationships with their clients by supporting them with a broad service offering, spanning from support to their day-to-day activities, regulatory change and business efficiency as well as adapting to new ways of working. Finally, the integrated offering of capital markets and securitisation services completes our value adding relationship with our clients.
Asset & Wealth Management
Asset & Wealth Management
Luxembourg as a financial center has continued to increase its AuM in the funds industry to reach EUR 5487 billion in June 2021, despite the Covid-19 pandemie. Existing players are extending their footprint and new players are coming into the market, both fueled by a Luxembourg business and regulatory environment that has showcased its agility to cope with fast-changing stakeholder requirements.
We are supporting our clients throughout the lifecycle of their activities. This means advising them in coping with challenges and launching new services to support them in the widening of their operations, of their global distribution and with regard to new product launches.
ESG— and more wider Sustainable Finance—is a priority for our clients, and we are investing massively in this area. We have built a leading expert team, which is supporting our clients on their ESG journey, from strategy through execution. We launched our "2021, the year of the ESG business change" initiative to accompany our clients with bi-monthly discussion forums, thought leadership papers and webcasts.
Despite a challenging context, our Banking practice had an exceptional year with 9.1% growth mainly driven by our Consulting and Audit practices, proving once again the depth of the trust our clients put in our services and expertise as well as the strength and resilience of the sector.
Our Advisory, Assurance & Tax teams collectively worked together to help our clients adapt and operate as normally as possible under exceptional working conditions. In an increasingly digital environment, customer journey and digital transformation have been key topics all year long. In addition, the past year was marked by ESG & Sustainable Finance rocking the Banking sector with increasing demand from customers and investors to invest in products that are socially and environmentally acceptable, which inevitably comes with an increasing regulatory and disclosure pressure that needs to be addressed proactively.
To keep up with an evolving market and meet clients expectations,we invested in our Asset Servicing, Capital Markets and E-Money & Payment Institutions practices.
The Insurance sector has not been spared in the last 12 months, starting with the COVID-19 pandemic in March 2020, experiencing "roller-coaster" financial markets and, more recently, being impacted by the unprecedented flooding across the country (and the exceptional support of insurers to their clients on this occasion). Nevertheless, the industry grew by 29.7% compared to last year.
Our Insurance practice had a truly remarkable year, driven by extraordinary Strategy & Joint Business Relationship projects. The Insurance sector also makes no exception when it comes to the ESG wave, and new disclosure requirements will force (re)insurers to fully embrace a genuine sustainable mindset.
On the tax side, the entry into force of DAC6 and the general reinforcement of reporting requirements and in general contributed to a significant growth in revenues. Our Audit practice remains a leader on the market with more than 32% of Insurance companies in Luxembourg being audited by PwC with new iconic clients coming up.
There is also much to come on the digital and AML fronts, amongst other things, with the recent Cloud Computing CAA Circular and the GAFI visits, promising an exciting and challenging year again, for both our clients and our outstanding insurance staff.
Industry & Public Sector
Industry & Public Sector
Despite a turnover drop of 9.8% mainly explained by the consolidation of the top line for the international tax portfolio, our non-financial sector (Industry and Public Sector) experienced a remarkable year considering the overall economic environment generated by the pandemic.
Our Consulting practice was the largest contributor to this success with a strong momentum in the Public Sector, fuelled by a heavy EU and governmental agenda in matters such as Modernisation and Transformation, Digital, Healthcare as well as Policy Advice (Climate Finance). Demand for Data Analytics, AI and Cyber services has reached record levels.
Our Assurance portfolio continued to grow with the win of some iconic audit clients, reflecting the trust of the local market in the quality of our audits.
The tax consulting and compliance activity remains a key pillar of our strategy in the context of a fast evolving EU and worldwide tax environment.