This paper represents a collaborative effort among the main asset managers active in Luxembourg, with the active participation of PwC, to assess the ‘user experience’ of those who rely on (or contribute towards) Luxembourg’s solution set. In doing so, we hope to draw attention towards areas of strength and improvement, as well as identify potential for future development. In our view, this paper is only the starting point of a larger journey. After the present assessment of the wider satisfaction level of the global asset management community, we propose to develop actual work streams. Indeed, the key strength of “Luxembourg Inc.” has always been the common aspiration of the actors to continuously contribute to the financial centre’s sustainable development.
Luxembourg’s triple A rating, combined with its historical political and economic stability, create a sturdy regulatory landscape that provides a high degree of investor confidence and certainty. This unique characteristic of Luxembourg compared with respect to other EU countries remains key for all interviewees, whose investors see Luxembourg as a safe place to invest as a result.
The country’s geographical and diplomatic proximity to the EU institutions has proved essential in ensuring ongoing alignment with EU regulations - not only in terms of attaining regulatory compliance, but also in actively leveraging regulatory opportunities.
Luxembourg is also perceived as an extremely holistic, resourceful financial centre - containing the full spectrum of the financial ecosystem within its small borders. The country is home to an extensive network of global players who lead in their respective fields that enable AWM players to uncover and leverage opportunities and solutions in a timely and streamlined manner. This ultimately creates a network spillover effect, in which every single financial player benefits from the presence of its peers.
Luxembourg is a truly cross-border fund centre, with the international distribution process being far smoother when coming from Luxembourg. Our interviewees attest to this, with the vast majority confirming that the cross-border distribution process of their Luxembourg-domiciled product shelves is significantly less burdensome than that of their internationally domiciled products.
Despite its minute size, Luxembourg is home to a wide, multilingual pool of talent with strong competencies in areas relevant to the AWM industry. Our respondents have strongly emphasised the fact that Luxembourg’s strong, diverse and highly skilled workforce is highly conducive to further enhancing the positioning of its AWM industry.
Despite these above-mentioned advantages and positive characteristics, complacency is not in Luxembourg’s DNA - as the Grand Duchy constantly seeks to reinvent itself alongside the winds of change. Indeed, there remains potential for further improvement - potential that must be unlocked in order to ensure the long-term prosperity of its financial centre and, subsequently, the long-term success of its economy.
Some quick fixes
In the very short-term, we highly recommend some quick win actions that would serve to help financial players in their daily operations, while simultaneously heightening the global perception of Luxembourg as a safe, attractive, compliant and innovative financial centre.
Given that the financial center has evolved and is continuing to do so, it has a series of highly appreciated solutions on offer. We should speak about those. Also, Luxembourg is not only attracting major asset managers but also key talents. This attractivity should be increased jointly to ensure that we can continue to grow along with the significant opportunities. Finally, strategic discussions should further cover well-known challenges, such as cost of living and the global evolution of the tax framework.
Luxembourg AWM Leader, Partner, PwC Luxembourg
Tel: +352 49 48 48 3175
Partner, Global AWM Market Research Centre Leader, PwC Luxembourg
Tel: +352 49 48 48 2191
Luxembourg AWM Strategy Leader, Partner, PwC Luxembourg
Tel: +352 49 48 48 2256
Partner, PwC Luxembourg
Tel: +352 49 48 48 2124
Partner, Markets and Strategy Financial Services Leader, PwC Luxembourg
Tel: +352 49 48 48 4174