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- Press releases

The ALFI Global Distribution Conference on September 15-16, organised in co-operation with NICSA and HKIFA, the industry associations of the US and Hong Kong, took place this year at the Philharmonie. Our usual venue at the Centre de Conference is hosting meetings of Luxembourg’s Presidency of the European Council during the second half of 2015.  

Kick-off of the conference by ALFI's new chairman - Denise Voss

Denise Voss, Chairman of ALFI

The conference was opened by Denise Voss, who took over from Marc Saluzzi as Chairman of ALFI in June. In her introductory speech, Ms Voss said Luxembourg now has a record E3,500 bn in AUM, with E252bn of new money flowing into its funds since the start of the year. But she cautioned against complacency: ‘We continue to be optimistic for our industry but the recent volatility and drop in values in emerging markets will undoubtedly have a negative impact on AUM – in the short term at least.’

Challenges ahead for ALFI, said Ms Voss, include working with the Luxembourg government to ensure efficient fund taxation, while challenges for investment firms and the fund industry include addressing the needs of an ageing population and embracing technology.

NEW Twitter campaign #askALFI


ALFI recently launched a new campaign on Twitter called #askALFI. Followers can ask questions related to the investment fund industry using hashtag #askALFI and ALFI experts respond to selected questions via short video messages.

The videos recorded at the conference are available here.

Conference in pictures


FinTech takes centre stage


H.E. Pierre Gramegna, Luxembourg’s Minister of Finance

Financial technology is no longer a back office function, and is becoming a key driver of industry performance from front to back office. H.E. Pierre Gramegna, Luxembourg’s Minister of Finance, told conference delegates: ‘Changes in technology are not only changing the way we perceive the world, but your whole business model.’ Minister Gramegna said he had tasked Luxembourg for Finance, the agency which fosters growth of the financial sector, to channel more resources into FinTech activities.  

Fund managers, too, acknowledged the rising importance of FinTech. Anne Richards, Chief Investment Officer of Aberdeen Asset Management, said: ‘The two aspects of FinTech that are interesting to us are the possibility of it being disruptive to our supply chain and its ability to deliver investment solutions.’

Anne Richards, Aberdeen Asset Management

Ms Richards said the fund management industry, to date, had been slow to adopt FinTech, a view that was shared by many at the conference. Service providers urged the industry to engage more with FinTech and support nascent providers of innovative technology. Nicolas Buck, for instance, CEO of Sequoia, said: ‘Behind every tech enhancement there is an entrepreneurial story, a small business.’ Mr Buck congratulated ALFI for offering exhibition stands to a number of FinTech companies and launching FinTech speed presentations during the lunch breaks. ‘It is important for our industry to embrace that topic,’ Mr Buck added.

Delegates predicted that FinTech would move beyond dealing with volumes of data, to dealing with KYC issues, distribution, commissions and data analysis.

Capital Markets Union moves ahead


The President of the European Commission, Jean-Claude Juncker, established CMU to increase funding to SMEs, to create more opportunities for investors and to facilitate cross-border investment.

Panel discussion: Capital Markets Union, on the verge of a new era

For CMU to work, it will require fixes to existing rules and commitments, said Jonathan Griffin, Managing Director, JP Morgan Asset Management (Europe). ‘The single market is far from complete, there is still fragmentation across states,’ he said.

The UCITS passport must work more efficiently and UCITS funds must be able to invest more easily in loans, was the view of Claude Niedner, partner at Arendt & Medernach.

The Commission’s public consultation on securitisation would be beneficial for the EU’s economy, it was generally agreed. Securitisation can also offer stable cashflows to long-term investors such as pension funds and insurance companies. Other aims of CMU, such as unlocking private investor’s savings, and encouraging additional sources of funding such as investment funds, would add jobs and increase growth in Europe.

Doing business in emerging markets


Panel discussion: China, Hong-Kong, Taiwan – the ‘promised lands’ for fund distributors?

Three Asian fund initiatives are moving ahead in parallel. These are: Mutual Recognition of Funds between mainland China and Hong Kong, the Asia Region Fund Passport and the ASEAN CIS Passport.   

Mutual Recognition of Funds (MRF) is still a work in progress, according to Sally Wong, CEO of HKIFA. Regulators are still working on applications both northbound and soundbound and are assessing issues such as quotas and order flow.

Meanwhile, six jurisdictions have signed a memorandum of understanding for the Asia Region Fund Passport. Securities regulators are due to produce a substantive framework within 12 months.

Will these initiatives reduce demand for European fund products, such as UCITS? Ms Voss, of ALFI, thought otherwise: ‘Given the continued rise in the number of middle class consumers, including in China, as well as the low penetration of funds in emerging markets, there is lot of opportunity for growth globally for investment funds.’

But European jurisdictions must continue to communicate with and educate Asian investors and regulators if they want their products to remain relevant in Asian markets. ‘We have to monitor closely what is happening in Europe,’ said Ms Wong. ‘We are watching developments in UCITS V such as the impact on depositaries and on remuneration. We need our European counterparts to help educate us on these issues.’

Jose Carlos H. Doherty, ANBIMA

Of course, the opportunity in emerging markets extends beyond Asia. Brazil’s fund industry, for one, is now the 7th biggest in world, with 12m investors and $990bn in AUM at end-2014. Growth in assets has been mainly due to a rise in high net worth individuals and the mass affluent, according to ANBIMA, the Brazilian funds industry association. The opportunity for foreign managers is growing as Brazilian investors gradually switch out of fixed income and into shares and foreign securities. Fixed income represented 80% of Brazilian assets in 2000, but that has now fallen to 44% as investors diversify their assets, said Jose Carlos H. Doherty, CEO of ANBIMA. The regulator now allows pension funds to double their allocations to foreign assets, he added, and Brazil’s upcoming reform of its investment fund regulation will allow Brazilian investors invest outside of Brazil, via Brazilian feeder funds and into regulated investment funds including, it is anticipated, UCITS.

The challenges for the industry now, Mr Doherty said, include raising funds to meet growing Brazilian infrastructure requirements.

Pension assets – an expanding


Dariush Yazdani, PwC Luxembourg

Pension assets will surge amid ageing populations, and pension funds will increasingly invest outside the borders of their home countries. These were the findings of a study commissioned by ALFI and produced by PwC. The study, presented for the first time at the conference, noted that in 1950 there were only eight retirees per 100 people. This number will rise to 25 per 100 by 2050. ‘This is the pension bomb that gives governments sleepless nights,’ said Dariush Yazdani, PwC partner and author of the study.

Pay-as-you-go systems are no longer viable and governments are pushing the pension burden onto individuals and corporates, Mr Yazdani said. As a result, pension assets will rise at a compounded rate of 6.6% a year from now until 2020 to reach some $55,000 bn.

Pension funds are increasingly investing outside their borders, which is a real opportunity for asset managers and for Luxembourg. Much of this investment will take place through mutual funds, which are attractive because they are highly regulated.

The study can be downloaded here.

Tax and regulation – are we done?


One of the biggest questions at the conference was whether we can now expect an end to the wave of regulatory and tax initiatives which have preoccupied investment firms since the financial crisis. The answer is: yes and no.

There was agreement that the industry was unlikely to face new regulation in the immediate future. However, there remained the considerable task of bedding down recently implemented regulation and refining rules and roles.

Jean-Marc Goy, CSSF

Jean-Marc Goy, Counsel for International Affairs at the CSSF in Luxembourg, said: ‘We should focus on fixing on what can be fixed to improve existing legislation instead of coming up with new initiatives. The time is right for a regulatory break, and for regulators and supervisors to apply in practice the new rules.’

Tax is a different story, however. Global tax initiatives such as FATCA, the Common Reporting Standard and BEPS, are only in their infancy and will pose challenges to investment firms and regulators alike as they are developed and implemented.   As noted during the conference ALFI continues to defend the interests of investment funds in respect of these initiatives and ALFI working groups are active in developing practical solutions to implement them.

Updated on 24/09/15
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- ALFI statements

On 23 September 2015, ALFI responded to the International Organization of Securities Commissions (IOSCO) consultation report on Elements of International Regulatory Standards on Fees and Expenses of Investment Funds, which proposes an updated set of common international standards of best practice for the operators of Collective Investment Schemes(CIS) and regulators.

Download the document here.

Updated on 24/09/15
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- Press releases

Pension funds around the world are increasingly looking beyond their borders to address their investment needs, according to the Association of the Luxembourg Fund Industry (ALFI) which today released its global pension fund report, “Beyond their borders: evolution of foreign investment by pension funds,” produced by PwC Luxembourg.

The report - which looks at the growth of pension funds globally, the asset allocation of pension funds on a regional basis and the foreign investment of pension funds - found that South America’s pension funds showed the highest growth rate globally, with assets soaring from USD 184 billion (bn) in 2008 to USD 528 bn in 2014, a 19.2% compound annual growth rate (CAGR).

In terms of investing overseas, foreign investment for the pension funds of the majority of OECD countries (excluding the US) accounted for about 25% on average of their total pension investments in 2008, but jumped to almost 31% in 2014.   

Denise Voss, Chairman of ALFI, comments: “As the baby boomer generation approaches retirement and life expectancy continues to improve, public sector pension liabilities will grow. At the same time the need for greater personal savings for retirement income is growing. This study provides more clarity on the global investments of pension funds, demonstrating the opportunities offered by global investing and how some markets are approaching this, but also highlighting how pension fund regulations differ from one country to the other. In particular it highlights the regulatory constraints on some pension funds in the amount they can allocate to investment funds or in foreign investments and suggests the impact this could have on their growth.”

Dariush Yazdani, Partner of PwC Luxembourg Market Research Centre, adds: “The new millennium has changed the playing field for pension funds. There are significantly more people retiring today than there were even a decade ago and this is putting pressure on pension funds' investment strategies. But even in the midst of new challenges, pension fund managers are facing a future brimming with opportunities. The unique ability of pension funds to focus on long-term investments allows them to absorb short-term volatility while bearing market and liquidity risk through diversification - one of the most effective means of achieving diversification is through foreign exposure.”

Key findings of the report include:

  • On a regional basis, North America’s pension funds represented the largest assets at a global level, having reached USD 27.21 trillion (tr) in 2014, up from USD 15.8 tr in 2008. 
  • Taken globally pension funds allocated 44% of their total portfolio to equities, 28% to bonds, 26% to alternatives and 2% to money market products in 2014. Allocation varies considerably from region to region, with North America allocating 48% of total assets to equities, Asia Pacific 40%, Europe 37%, and South America 34%.
  • The US, Canada, Japan and the Netherlands are the countries that pursued the largest equity investments in 2014, allocating USD 12 tr, USD 986 bn, USD 662 bn and USD 582 bn respectively to this asset class.
  • Japanese pension funds experienced the largest increase in the share of equities within their total portfolio, which increased by 21% from 2008 to 2014. In contrast, South Korea’s pension funds showed the largest decline in their equity share, decreasing by 22% from 2008 to 2014.
  • The alternative asset class has shown a strong increase from 2008 to 2014 with the total amount allocated to alternatives jumping from USD 4.4 tr in 2008 to USD 9.7 tr in 2014, a 117% increase. 
  • Foreign investment by the pension funds of the majority of OECD countries (excluding the US) accounted for about 31% of their total pension investments on average, however with regional differences described below.
  • In North America[1], pension funds’ overseas investments stood at 16% of the region’s total portfolio in 2008, reaching 21% in 2014.
  • In Europe, the average percentage of pension fund portfolios allocated to foreign markets increased from 32% in 2008 to 34% in 2014, with the Netherlands, Finland and Portugal investing the highest percentage of their pension fund portfolios overseas in the last six years – in the Netherlands foreign investment reached 76% of the country’s total portfolio in 2014.
  • Asia Pacific’s pension funds invested, on average, 19% of the region’s total portfolio in foreign markets in 2008, and expanded that to 31% in 2014. Hong Kong and Japan are the most aggressive investors in foreign investments within Asia, with Japan’s pension fund allocation to foreign markets rising from 16% in 2008 to 32% in 2014.
  • In South America, this is the case for Chile and Peru, with Chile allocating 44% of total assets to foreign markets in 2014 and Peru investing 41% for the same period.  Brazil, in contrast, invested less than 1% in foreign markets in 2014 due to stringent regulatory barriers which are beginning to soften. 
  • When investing abroad, pension funds favour equity investments but adopt different strategies:
  • Some pension funds develop asset management teams based abroad. For example in 2011 Norges Bank Investment Management, which manages the Government Pension Fund Global for Norway, established a subsidiary in Luxembourg to oversee direct and indirect real estate investments in Continental Europe. The South Korean National Pension Service opened an office in London in 2012, followed by another in Singapore three years later.
  • Another strategy includes acquisitions or partnerships with asset managers that have expertise in foreign markets. In 2012 Fidante Partners, which manages the Australian government’s pension funds bought a significant stake in MIR Investment Management, a specialist in Asia-Pacific equities.
  • Investing in foreign funds is another efficient way to invest abroad. Nearly all mature pension markets tend to use investment funds when investing a large percentage of their assets abroad as they are one of the most effective and convenient vehicles for gaining exposure to international assets, giving liquidity and exposure to a wide variety of global assets that are not always available in a domestic market. For less developed pension markets, a higher usage of investment funds is expected over the coming years. Developing countries are likely to follow the move of the Chilean pension funds, which have been achieving higher diversification through the use of UCITS funds.

Ms Voss concludes: “A key finding of this report is the importance of investment funds in the diversification of the portfolios of pension funds around the world. Investment funds, and UCITS investment funds in particular, provide pension funds with a substantial degree of liquidity, diversification and a very high level of investor protection.”

[1] Excluding the US

Download the press release in English, French and German.

The study "Beyond their borders: evolution of foreign investment by pension funds" can be downloaded here.

Updated on 22/09/15
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- Press releases

The Luxembourg Stock Exchange in cooperation with the Association of the Luxembourg Fund Industry (ALFI) has announced today the publication of a compendium of Luxembourg laws and regulations on investment funds.

The compendium, currently published in English, French and German and made up of two separate publications in each language. The first publication covers undertakings for collective investment in transferable securities (UCITS) established under Luxembourg law and contains the amended Law of 17 December 2010 on undertakings for collective investment as well as the main regulatory texts relating thereto.

The second publication covers alternative investment funds (AIFs) established under Luxembourg law and other investment vehicles which are neither UCITS nor AIFs. It contains the amended Law of 12 July 2013 on alternative investment fund managers (AIFM), the amended Law of 17 December 2010 on undertakings for collective investment, the amended Law of 13 February 2007 on specialised investment funds, the amended Law of 15 June 2004 on the investment company in risk capital as well as the main regulatory texts relating thereto.

Denise Voss, Chairman of ALFI, comments: “The publication of such a reference booklet was long overdue. The number of laws, regulations and circulars impacting investment funds is steadily increasing. Fund professionals now have access to a single source book for each particular type of fund, containing all main legal texts and accompanying circulars.

I am convinced that these publications will prove extremely useful to the international investment fund community”.

Robert Scharfe, Chief Executive Officer of the Luxembourg Stock Exchange, adds: “Investment funds are the second largest segment on the Luxembourg Stock Exchange, with more than 6,500 listings. As an international exchange serving a global base, these two publications respond to a clear need from the fund industry and provide an essential reference”.

These two publications of the main legal and regulatory texts were produced by the two Luxembourg law firms, Arendt & Medernach and Elvinger, Hoss & Prussen, who have actively cooperated to select and compile the legal and regulatory texts that are relevant for the different types of investment vehicles concerned. These two law firms have also prepared the English and German translations.

These publications are available in French, English and German and may be downloaded at and at

Regular updates will be published to keep track with ongoing changes and additions to Luxembourg laws, regulations and circulars.

The press release is available in English, French and German.

Updated on 14/09/15
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- Press releases

Luxembourg is the second largest European domicile for ETFs with 465 funds units and some 82 bn EUR of AUM (end of June 2015). Luxembourg notably continues to attract ETFs sold on an international basis, gathering around 35% of the total authorisations in Europe for cross-border distribution of ETFs.

ALFI has set out ten reasons for managers to make Luxembourg their ETF domicile. Reasons include:

  • Outstanding distribution support, with Luxembourg-domiciled investment funds being sold into more than 70 countries.
  • A state-of-the-art legal and regulatory framework, allowing for all types of traditional and alternative funds, including all types of ETFs.
  • The quality of Luxembourg’s market infrastructure, as it is home to one of the largest ETF settlement infrastructures.
  • An efficient tax environment for ETFs.
  • Strong expertise, with a strong concentration of investment fund experts who are specialised in all aspects of product development, administration and distribution.

Many investors find ETFs attractive as they’re listed on stock exchanges and can be traded easily, and offer investors diversification, liquidity and transparency, all at a low cost. ALFI expects to see continued growth and further innovation when it comes to this kind of products, such as the development of ETFs investing in China or in RMB, in Islamic finance, or in socially responsible projects. Luxembourg is already ideally placed to domicile these funds.

Download the press announcement here.

Updated on 10/09/15
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- Press releases

Send your tweet to @ALFIfunds using the hashtag #askALFI!

The ALFI communications team will suggest the subjects which will be related to the latest industry trends or topics discussed at specific ALFI events.

ALFI will answer selected questions via short video messages taking into account that we are limited to six per event.

Updated on 07/09/15
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Send your tweet to @ALFIfunds using the hashtag #askALFI!

The ALFI communications team will suggest the subjects which will be related to the latest industry trends or topics discussed at specific ALFI events.

ALFI will answer selected questions via short video messages taking into account that we are limited to six per event.

Updated on 07/09/15  
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- ALFI statements

On 17 August 2015, ALFI responded to the technical discussion paper on packaged retail and insurance-based investment products (PRIIPs), which was published end of June 2015 by the European Supervisory Authorities (ESAs).

The ESAs are mandated by the Regulation on Key Information Documents for Packaged Retail and Insurance-based Investment Products to develop draft Regulatory Technical Standards (RTS) on the content and presentation of the Key Information Documents (KIDs) for PRIIPs. The aim of the latter is to provide EU retail investors with consumer-friendly information about investment products with the ultimate aim of improving transparency in the investment market.

The technical discussion paper aimed to collect views on the possible methodologies to determine and display risks, performance and costs in the KID for PRIIPs.

Click here for ALFI’s response.

Updated on 18/08/15
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- ALFI statements

ALFI responded to the EC consultation on regulation EU No 648/2012 on OTC derivatives, central counterparties and trade repositories.

Download the document here.

Updated on 14/08/15
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- Press releases

The Board of Directors of the Association of the Luxembourg Fund Industry (ALFI), has appointed Freddy Brausch, Partner at Linklaters LLP in Luxembourg, as Vice-Chairman focusing on National Affairs and Michael Ferguson, Partner at EY Luxembourg, as Vice-Chairman focusing on International Affairs. The Board of Directors furthermore renewed the mandate of Julien Zimmer, General Manager Investment Funds at DZ Privatbank S.A., as Treasurer of the association.

The Chairman, the Vice-Chairmen, the Treasurer and the Director General form ALFI’s Executive Committee. 

Freddy Brausch is the Managing Partner of Linklaters LLP in Luxembourg and has been a partner in the Investment Management Group since 1988.

Michael Ferguson is the EY EMEIA Regulated Funds Practice and Luxembourg Wealth & Asset Management Leader. He has an experience of more than 30 years in the investment fund industry in Luxembourg, Ireland, the UK and the US.

Julien Zimmer is the General Manager Investment Funds in charge of coordinating the DZ PRIVATBANK S.A.’s Investment Fund Business and has been actively involved in the industry since 1983.

Updated on 17/07/15
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