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- Press releases

“The asset management industry has a once-in-a-generation opportunity to re-imagine and modernise its distribution model to address market and operational challenges – for future and current investors,” says Denise Voss, Chairman of ALFI.

“The asset management industry has a once-in-a-generation opportunity to re-imagine and modernise its distribution model to address market and operational challenges – for future and current investors,” says Denise Voss, Chairman of ALFI.

According to a new paper published today by the Association of the Luxembourg Fund Industry (ALFI) and Deloitte, “How can FinTech facilitate Fund Distribution”, the surge in FinTech is starting to reshape the financial sector on a global scale with a flourish of new players attracting significant attention from markets, customers and investors. ALFI believes that Luxembourg asset servicing firms have a major opportunity to help asset managers and distribution intermediaries to succeed in the change. 

Denise Voss, Chairman of ALFI, says: “FinTech is more than a buzzword. It will have a fundamental impact on the operating model of asset managers, distribution intermediaries and service providers, who are also facing new investor behaviours. The investment management ecosystem has not only to increase efficiency, but also to provide a better customer experience if it is to succeed in the future. In order to help asset managers and service providers to adapt their respective business models, ALFI has established its Digital/FinTech Forum whose aim is to highlight the challenges and opportunities inherent in new digital technologies.” 

Simon Ramos, Partner of Deloitte Luxembourg, says: “FinTech will be a game-changer in investment management operating models. Luxembourg’s strongly connected industry players are well-positioned to ensure that Luxembourg is in the driving seat for innovation.”

The paper outlines the growth and driving forces of FinTech:

  • Worldwide investment in FinTech is growing exponentially, with investment into companies in the sector tripling to USD12 billion from 2013 to 2014;
  • Luxembourg has seen a flourish of start-ups, with over 150 FinTech companies based in Luxembourg providing IT infrastructure or IT services as well as software or technology-based business services;
  • New technologies have emerged: Blockchain, artificial intelligence, machine learning, digital investment platforms, peer-to-peer “P2P” lending;
  • The new generation of investors wants more proximity with asset managers, a better ability to compare their investments with peer groups, to invest in a social responsible way and it will seek to use online investment platforms;
  • Big Data and analytics make sense of data and can produce descriptive & predictive analytics on investor behaviours, performance measurement, market intelligence or risk metrics;
  • Regulation in the historical ecosystem is still evolving and regulation of the fast evolving FinTech is uncertain;
  • RegTech emerges as a technology based solution creating efficiency and automation in non-subjective compliance tasks.

According to the paper, successful asset management companies will adapt product management and marketing strategies to the mind set and habits of the new generation of investors, using FinTech to make use of a wide set of available data sources, including external sources such as social media. Client profiling will be supported by data analytics. Key features of online platforms will be education, risk & performance metrics, account management functionalities, wealth reports vs investment goals and market insight. These enhanced digital platforms will stimulate direct-to-consumer (“D2C”) distribution channels in both retail and the institutional investor segments.

Luxembourg has very strong investment fund and private banking sectors efficiently working together for the prosperity of investors and the market place. Transfer agents, order management platforms, central administrators and custodians have a major role to play in the Fintech change. Luxembourg players must actively drive the Fintech innovation locally and engage with disrupters, modernizers and enablers in order to be ahead of developments, adapt their operating models with agility and avoid innovation imposed from abroad.

Denise Voss concludes: “The asset management industry has a once-in-a-generation opportunity to reimagine and modernize its distribution model to address market and operational challenges – for future and current investors.  Luxembourg asset servicing providers should make engagement in the FinTech revolution a top priority to remain relevant and competitive to continue to provide best-in-class services to their asset management clients and investors.”

Download the press release in English, French or German.

Download the report How can FinTech facilitate Fund Distribution.

Updated on 30/03/16
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- Press releases

ALFI has issued the ALFI Spring Mag 2016, which brings forward and deepens key topics addressed at this year’s Spring Conference, looks into factors that drive market trends and how those dynamics ultimately affect the investment fund business. 

 

Download the PDF version.

fintech - diversity - regulatory & tax

In compiling this magazine, ALFI has leveraged the wealth of diversity of thought engendered by the broad range of professional backgrounds and experience of its members, who represent the entire value chain of the investment fund business.

ALFI would like to thank all the contributors of the magazine, whose aim was to provide each conference participants with a memento of key industry references discussed during the ALFI Spring Conference and depicted in this unique publication, as we move forward with the fund industry.

Updated on 08/03/16
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- Press releases

Co-chair of the new ALFI Fintech/Digital Forum Serge Weyland (BIL) and Steven Libby (PwC Luxembourg) speak about the Luxembourg initiatives in the fintech space. 

How is Luxembourg positioning itself as a Fintech hub?

Serge Weyland, BIL, Co-Chair of the ALFI Fintech/Digital Forum, says:

"There is a lot going on in Luxembourg at the moment. There are various forums, including the ALFI newly launched Fintech/Digital Forum. We believe that this is definitely an opportunity for Luxembourg as there is lot of knowledge bundled in a small country. We can give access to this knowledge to the Fintech companies for them to develop use cases, to develop ideas of how they can help our industry to become more efficient and come up with new services, new ideas to better serve our customers."

What initiatives is ALFI taking in this regard?

Steven Libby, PwC Luxembourg, Co-Chair of the ALFI Fintech/Digital Forum, says:

"Within ALFI we’ve decided to create the ALFI/Fintech Digital Forum. The idea of this initiative is to bring our members together to look at those disruptors or enablers that will have the most significant impact on our industry. It’s a great opportunity to bring together our community, our ecosystem, together with the Fintechs and look very carefully at different areas: disruptors, digital, blockchain and others which we think will have a significant impact.

We want to be ahead of the curve – we want to drive these initiatives, facilitate the different requirements in Luxembourg regulation in order to help us to win in this quickly evolving space."

Updated on 29/02/16
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- Press releases

Anouk Agnes, Deputy Director General at ALFI, unveils the most appealing topics which will be discussed at the ALFI Spring conference on 8 & 9 March 2016!

 

Ms Agnes says: "The ALFI Spring conference reflects some of the topics addressed in the recent ALFI 2020 Ambition Paper. In this strategy paper we have identified a number of trends that are likely to impact the asset management industry in the years to come: like technology, demographics or consumer behaviour. You will find all these topics on the agenda of the upcoming Spring conference.

For instance: fintech – how can it best serve the asset management industry?

We will also speak to the new generation of investors and look at what it is they really want? In this context we will speak about ESG and also the gender bias in the fund industry. Finally, we will obviously look at how funds can best serve the economy and growth!

So come join us at ALFI Spring conference on 8th and 9th March and look at what matters today and what is important for the fund industry tomorrow!"

Join the conference now!

Updated on 24/02/16
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- Publications

On 5 February 2016, the Luxembourg Caisse de Consignation published Frequently Asked Questions regarding the Law of 28 July 2014 on the immobilisation of bearer shares and bearer units.

The FAQs provide useful guidance on some of the practical steps that Luxembourg companies and Luxembourg investment funds must take with respect to the cancellation of bearer shares and bearer units that will not have been deposited with a depositary before 18 February 2016. The FAQs gives some information in particular on (i) the list of documents that the Caisse de Consignation must receive upon deposit of assets (ii) the level of fees and expenses charged during the period of deposit and (iii) the procedure that the holder of certificates must follow when claiming a refund of assets that have been deposited with the Caisse de Consignation.

Click here to access the text of the FAQs in French or unofficial translation in English and in German.

Related documents:

- the  text of law of 28 July 2014 in French or in English

- the FAQs published by the CSSF on 5 May 2015

Updated on 29/02/16
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- Press releases

Ms Sasha Baillie, Diplomatic Advisor and Deputy Chief of Cabinet of the Vice Prime Minister at the Ministry of Economy, Luxembourg, and Chair of the Nationbranding Committee, speaks about the importance of the nation branding.

Ms Baillie comments: "Yes absolutely, it does. As we all know you never get a second chance to make a very good first impression. In a world where things are moving faster and faster and decisions are taken swiftly, it’s crucial that you are well positioned right from the beginning – it’s important to help to attract investors, new companies, talents, artists, innovators, creators, etc. – and it is also important for the financial services industry. This is why, the Luxembourg government has been pursuing nation branding strategy with the objective of creating a coherent, very positive and authentic image of the country. We want this image to reflect all the positive assets of the country: that we are open, reliable and a dynamic country. This is the objective we want to pursue so it is known instinctively that this is what Luxembourg is."

View other ALFI videos here.

Updated on 15/02/16
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- Press releases

Likhit Wagle, Global Industry Leader, Banking & Financial Markets, IBM Global Business Services, IBM Industry Academy Member, speaks about digital.

Mr. Wagle comments: A digital is very much a must for three main reasons:

1. Customers are demanding it more and more. The customers of the financial services industry are getting very used to digital. They are getting a great experience in everything they do through digital and they are expecting the same type of experience from their financial services companies. So digital is essential from that perspective. 

2. If you look at the financial performance of these companies, there must be substantial improvement, particularly substantial reduction in cost. I think digital is the way to do that through automation of processes and also to get to the next generation of infrastructure which will radically reduce the level of operations and IT cost that the industry is facing.

3. The industry continues to be under regulatory pressure, and if you look at the compliance that is required – once again, I think digital will enable financial services companies to be able to comply much more effectively, efficiently and at significantly lower levels of cost.

See more videos here.

Updated on 08/02/16
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Likhit Wagle, Global Industry Leader, Banking & Financial Markets, IBM Global Business Services, IBM Industry Academy Member, speaks about digital.

Mr. Wagle comments: A digital is very much a must for three main reasons:

1. Customers are demanding it more and more. The customers of the financial services industry are getting very used to digital. They are getting a great experience in everything they do through digital and they are expecting the same type of experience from their financial services companies. So digital is essential from that perspective. 

2. If you look at the financial performance of these companies, there must be substantial improvement, particularly substantial reduction in cost. I think digital is the way to do that through automation of processes and also to get to the next generation of infrastructure which will radically reduce the level of operations and IT cost that the industry is facing.

3. The industry continues to be under regulatory pressure, and if you look at the compliance that is required – once again, I think digital will enable financial services companies to be able to comply much more effectively, efficiently and at significantly lower levels of cost.

See more videos here.

Updated on 08/02/16  
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- Press releases

How is Luxembourg positioning itself in follow-up of COP21 in Paris?
Marc Bichler, Ambassador-at-large for climate change, Ministry of Foreign and European Affairs, Government of the Grand Duchy of Luxembourg, comments on the post-COP21 initiatives in the financial sector.

At the COP21, 195 countries plus the European Commission expressed their political will at the highest level to launch the transition from the fossil fuel economies and lifestyles towards renewable energies and increased energy efficiency. It is important to recognise that in this energy transition lie many new and huge economic opportunities including for job creation as well as opportunities for investment. The implementation of this unprecedented global political commitment in the fight against the climate change will require very important new flows – financial flows both from the public and from the private sector side.

The governments would be well advised around the globe to examine how to make the best use of their public funding in order to leverage private sector investment. Luxembourg government for its part is doing so for certain as we speak in close consultations with private sector actors as well as the multilateral partners like European Investment Bank for example. The aim being to establish Luxembourg also as an international centre for climate finance.

Read Marc Bichler's speech at the ALFI European Alternative Investment Funds Conference on 19 & 20 January 2016.
 

Updated on 05/02/16
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- Press releases

With 3,506.2 billion EUR of assets under management as at 31 December 2015, Luxembourg retains its position as the leading investment fund domicile in Europe, growing by 13.29% last year. The number of investment funds stood at 3,878. As at the end of November, Luxembourg accounted for 42.43% of all net sales in Europe.

With 3,506.2 billion EUR of assets under management as at 31 December 2015, Luxembourg retains its position as the leading investment fund domicile in Europe, growing by 13.29% last year. The number of investment funds stood at 3,878. As at the end of November, Luxembourg accounted for 42.43% of all net sales in Europe.

Investment funds domiciled in Luxembourg and initiated by US and UK asset managers represent the 1st and 2nd largest net assets under management, namely EUR 759.8 billion and EUR 581.5 billion, respectively, at the end of 2015.

Luxembourg is also increasingly recognised as a prominent hub for alternative investment fund managers with 211 authorised AIFMs, 626 registered AIFMs and 950 limited partnerships. For real estate and private equity funds, Luxembourg is leading the way in Europe.

Denise Voss, Chairman of ALFI, comments: “The high net sales that we continue to see demonstrate that the Luxembourg investment fund product remains a preferred choice for the international investor. Likewise, fund promoters from 69 countries around the world continue to use Luxembourg as their platform for marketing their funds internationally.”

2015 also marked further developments with the gradually opening Chinese market, with Luxembourg remaining Europe's leading financial centre for RMB denominated investment funds, demonstrated by the fact that:

  • Chinese asset managers launched investment funds in Europe by selecting Luxembourg as the domicile for their funds, including: Harvest Fund Management, CSOP Asset Management (China Southern AM), China AMC, ARC China, Oriental Patron, Guotai Junan, BOCOM Schroders, GF International, China Universal and E-Fund.
  • Luxembourg UCITS received permission to participate in the Hong Kong-Shanghai Stock Connect scheme as early as 2014 and, by 2015, 81 Luxembourg domiciled investment funds were  authorised by the CSSF to take advantage of the facility (alongside QFII and RQFII) to invest in China A-shares listed on the Shanghai stock exchange.
  • In April 2015, the People's Bank of China announced the granting of a 50 billion RMB RQFII quota to Luxembourg. ICBC Europe and Bank of China (Luxembourg) SA are the first financial institutions to have benefited from this program in the amount of 4 and 2 billion RMB, respectively.

Although further growth opportunities for the industry exist, there is also a need for caution, for a number of reasons. The Capital Markets Union (CMU) is very positive for the asset management community as CMU can leverage the potential of investment funds to contribute to overall economic growth in a number of ways. For example, investment funds can help resolve long-term issues like retirement funding and the financing of innovation and infrastructure. In addition, the newly introduced ELTIFs play an important role in this context, as does the Luxembourg ‘Reserved Alternative Investment Fund’ which will provide a timely additional and useful alternative investment fund regime.

However, several factors, including increased competition between financial centers, the uncertain economic environment and the current high volatility of capital markets mean that continued steady growth is far from certain.

“In order to sustain the sector’s development, ALFI will continue to communicate to its stakeholders – including the general public - the essential role that investment funds play in creating jobs and sustainable growth by channelling capital into the economy”, says Denise Voss.

Another factor that is likely to present growth potential for the industry is technology. At the same time technology and big data can also be disruptive forces, as they may fundamentally change the way investors interact with the asset management industry. Asset managers will require support to develop new business models and ALFI has therefore launched the ALFI FinTech Forum to spread digital know-how within its asset management community and to focus on practical developments that will help the Luxembourg asset management centre to thrive, both today and in the future.

Finally, the pace of regulation has been very intense over the last few years. Although each individual piece of regulation is founded on the good intention of protecting the investor, when added together they can not only create a compliance challenge, but also lead to additional costs for companies and, in turn, their clients. Going forward, ALFI will continue to engage pro-actively with national and international stakeholders to promote ‘better’ rather than ‘more’ regulation.

Denise Voss concludes: "The overall environment in which the asset management industry evolves has rarely been as diverse as today. If some recent developments and trends clearly have the potential to stimulate the sector, others are more likely to have a negative impact. However, our industry players’ proven capacity to adapt to a rapidly changing environment and the fact that Luxembourg funds are distributed on such a large scale around the world lead me to believe that our industry can continue to progress in the coming years."

 

Download the press release in English and French.

Updated on 03/02/16
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