This site uses third party analytics cookies. Continuing the navigation over the following banner or closing the same is expressed consent to their use.

Understanding Investing 简体中文网页 Members section

- ALFI statements

On 8 January 2015, ALFI responded to the ESMA call for evidence on the AIFMD passport and third country AIFMs.

ALFI is of the view that an extension of the passport to non-EU managers in 2015 would be premature. Moreover, ALFI thinks that abolishing national private placement regimes (NPPRs) is a prerequisite for an extension of the passport to third countries. A parallel system would cause market distortion by putting EU AIFMs at a clear disadvantage. Therefore, ALFI concludes that a decision by the Commission should be deferred until at least 2018, i.e. the point in time where NPPRs are meant to disappear. A possible decision in favour of an extension at that point in time should be followed by a one year transition period.

Updated on 09/01/15
Share |
- ALFI statements

Download the document here.

Updated on 21/05/15
Share |
- Press releases

Industry experts comment on the current challenges and opportunities that the alternative investment fund industry faces and the impact of AIFMD on the private equity, real estate and hedge fund sectors. These podcasts were filmed at ALFI’s 2014 European Alternative Investment Funds Conference.

Real Estate: “Luxembourg is the most popular international domicile in Europe for real estate funds today”

Michael Hornsby, Partner at EMEIA Real Estate Funds Leader and Co-chairman of the ALFI Real Estate Investment Funds Sub-Committee, comments on the main trends within the current real estate investment fund sector.

  • There are now more than 300 real estate funds domiciled in Luxembourg and there has been diversification in the number of countries that these funds raise money from and an increase in the number of investors on average per fund.
  • AIFMD has pushed real estate fund managers and service providers to formalise their operating models and create a standardisation across Europe.
  • Many offshore managers wanting to access European capital look to Luxembourg for experience and infrastructure to service real estate fund market.

Private Equity: “2014 has set a record for fundraising since the crisis”

Jérôme Wittamer, Chairman of the Luxembourg Private Equity and Venture Capital Association, discusses the current state of the private equity sector and some of the key trends within the industry.

  • After weathering challenging economic conditions over the last 5 to 6 years, the European Private Equity sector is now entering a new period of optimism as 2014 has set a record for fundraising since the crisis.
  • Key trends include a rise in the number of PE and VC managers setting up AIFMs in Luxembourg and growth in the use of Special Limited Partnerships.
  • VC and PE have yielded significant benefits for the economy and wider society and have been behind most of the last decade’s innovations in clean tech.

Hedge Funds: “The challenge is to comply but the opportunity is there”

US General Counsel at Lombard Odier Asset Management, Ray Mouhadeb, explains the challenges and possible rewards of AIFMD for alternative investment and hedge fund managers.

  • Whilst hedge fund managers are faced with the challenge of being compliant, to get up and running and have the infrastructure in place to be able to distribute in the EU, there is also a great opportunity to distribute products and access types of capital that others won’t be able to.
  • Private placement regimes are the more efficient approach for targeting specific key markets whereas passporting provides opportunity to access broader distribution channels.
  • There is a myth around historic domiciliation of funds, when in reality the focus should be on the best approach for the investor base and how to tailor for this.
Updated on 19/12/14
Share |
- ALFI statements

This paper consults on the content of the technical advice that ESMA should provide by 30 April 2015 to the European Commission on the implementing measures of the Regulations 346/2013 on European Social Entrepreneurship Funds (EuSEF) and 345/2013 on European Venture Capital Funds (EuVECA). The European Commission requested the advice of ESMA on 27 May 2014.

View the ALFI's response here.

The consultation paper is divided in five parts. The first one deals with the advice on the types of goods and services, methods of production for goods and services and financial support embodying a social objective. The second and third parts deal with the advice on the conflicts of interest of EuSEF and EuVECA managers, respectively. The fourth part deals with the advice on the methods for the measurement of the social impact. The fifth part deals with the advice on the information that EuSEF managers should provide to investors. Each of these parts is divided in five sections: the first sets out the applicable legal framework; the second describes the mandate and indications from the European Commission; the third explains the proposed policy approach; the fourth sets out the proposed advice to the Commission; finally, the fifth presents a number of questions to the participants in this consultation.

Updated on 12/12/14
Share |
- ALFI statements

ALFI published its reply to IOSCO’s Consultation Report on Principles regarding the Custody of Collective Investment Schemes’ Assets (CR07/2014).

Download the document here.

IOSCO consultation report can be downloaded here.

Updated on 10/12/14
Share |
- Press releases

ALFI, the Association of the Luxembourg Fund Industry, considers it important to clarify the position of Luxembourg-domiciled funds in relation to the recent discussions on the so-called “LuxLeaks”.

Luxembourg is a leading investment fund domicile with more than 3900 regulated funds, or close to 14000 fund units, currently domiciled in the Grand Duchy. Fund promoters from all over the world choose to domicile their funds in Luxembourg because of the professional expertise, the market infrastructure, a state-of-the-art legal framework, and the quality of services available in Luxembourg. Last but not least, Luxembourg plays a key role in enabling fund management companies to distribute their funds in more than 70 countries globally. Over the past 25 years, assets under management by regulated Luxembourg investment funds have grown to reach over 3000 billion EUR at the end of 2014.

ALFI, the Association of the Luxembourg Fund Industry, considers it important to clarify the position of Luxembourg-domiciled funds in relation to the recent discussions on the so-called “LuxLeaks”.

  • Luxembourg-domiciled investment funds are subject to an annual subscription tax (“taxe d’abonnement”) calculated on their assets under management. In contrast, the vast majority of other countries do not apply any taxation at all on a fund level. 
  • The quasi-totality of Luxembourg investment funds, and more specifically ‘UCITS’ funds, do not need, nor do they obtain, rulings.
  • At times, real estate or private equity funds, which represent only a few tens of billions of the EUR 3000 billion of total assets under management by Luxembourg funds, need to use ‘special purpose vehicles’ (SPV) at the level of which rulings may be granted. SPVs are common market practice and used in many jurisdictions, primarily for legal and regulatory reasons[1]. Rulings applied to SPVs mainly aim to ensure that fiscal neutrality is maintained. In other words, an investor should not be fiscally disadvantaged when he invests in real estate or private equity through a foreign fund rather than directly.

Camille Thommes, Director General of the Association of the Luxembourg Fund Industry (ALFI), says: “There is no tax advantage by domiciling an investment fund in Luxembourg. Fund managers and international investors select Luxembourg as a domicile because of the track record and unequalled expertise of the investment fund industry in Luxembourg.”

He adds: “Regulated investment funds are an important source of funding for the economy, i.e. for small- and medium, as well as for multinational companies, for infrastructure projects, environmental or social entrepreneurs. They are well-regulated financial products for investors around the world. There is no reason to draw such investment funds into the recent discussion on tax practices in Luxembourg.”

Camille Thommes emphasizes that:  “Investment funds play no role in enabling people or companies to avoid tax: investors in Luxembourg investment funds will be essentially taxed in their home country, according to the local tax rules, on the income derived from their investment.”

Camille Thommes concludes: “In the meantime, everybody knows that tax rulings are legal and commonly used in many jurisdictions. They are not a “Luxembourg-specific” practice, contrary to what the LuxLeaks press seems to suggest. It is difficult to get rid of the feeling that LuxLeaks is a targeted campaign against Luxembourg”.

Download the press release in English and German.

[1] For example, banks will insist on the creation of SPVs to guarantee their security when they act as lending banks in a private equity or real estate acquisition.


Updated on 08/12/14
Share |
- Press releases

A number of Luxembourg UCITS have shown interest for the pilot program that provides mutual trading access between the Shanghai and Hong Kong stock markets (Shanghai Hong Kong Stock Connect). This program offers an opportunity for UCITS to invest into A-shares listed on the Shanghai stock exchange alongside the existing investment schemes (such as QFII and RQFII). The first Luxembourg UCITS was now approved.

“The stock connect program represents one of the most significant developments for foreign investors wishing to access these markets” says Camille Thommes of ALFI.

A number of Luxembourg UCITS have shown interest for the pilot program that provides mutual trading access between the Shanghai and Hong Kong stock markets (Shanghai Hong Kong Stock Connect). This program offers an opportunity for UCITS to invest into A-shares listed on the Shanghai stock exchange alongside the existing investment schemes (such as QFII and RQFII). The first Luxembourg UCITS was now approved.

Camille Thommes, Director General of the Association of the Luxembourg Fund Industry, said: “Over the past years, the Chinese economy and financial markets have undergone a remarkable transformation and seen significant growth. More specifically, the Chinese equity market has grown to the second largest equity market in the world after the US.”

“The Shanghai – Hong Kong Stock Connect program therefore represents one of the biggest developments for foreign investors wishing to access this market. The program, launched on 17 November 2014, enables foreign investors to trade Shanghai-listed shares via the Hong Kong stock exchange, and mainland investors to invest in Hong Kong shares via the Shanghai stock exchange.  A number of Luxembourg UCITS have already seen the opportunity that this represents and sent their applications to the supervisory authority and the first one has now been approved.”

There are a number of factors which require careful consideration and appropriate solutions for those Luxembourg UCITs considering accessing this market through the Shanghai Hong Kong Stock Connect. The Luxembourg UCITS, its management company (if any) and the depositary bank appointed by the fund must give due consideration to a number of factors and ensure that their risk management procedures adequately covering them.  These factors include:

  • accounts opened by the depositary bank of the UCITS with a sub-custodian in Hong Kong are segregated at the level of the UCITS' sub-funds or structured as UCITS client assets omnibus accounts of the Luxembourg depositary with that sub-custodian;
  • the broker model involving Delivery Versus Payment settlement must be chosen in order to limit counterparty risk;
  • the prospectus, and most particularly the KIID, will contain a specific disclosure to inform investors of the specific legal risks linked to compulsory requirements of the local CSDs, HKSCC and ChinaClear for custody of securities on a cross-border basis.

Luxembourg UCITS whose investment policy already permits exposure to A-Shares and which only need to adapt their prospectus and KIID to cater for the access through the Shanghai Hong Kong Stock Connect will benefit from a fast-track procedure when filing their application with the supervisory authority, the Commission de Surveillance du Secteur Financier.

Download the press release in English.

Updated on 02/12/14
Share |
- Press releases

According to a report published today by the Association of the Luxembourg Fund Industry, carried out by Oliver Wyman, the introduction of the AIFMD has fuelled strong growth in European fund domiciles, with the number of alternative investment funds increasing by10% since 2010, and assets under management increasing by 13%.

“The introduction of the AIFMD increased the attractiveness of European onshore domiciles,” comments Marc Saluzzi, Chairman of ALFI.  “Whilst many were against it when it was first introduced because of the fear of high compliance costs and additional complexity, this piece of regulation has brought significant benefits, allowing EU domiciled managers to market authorised funds across the EU.”

The study identifies four main trends in the choice of domicile for alternative investment funds (AIFs)[1]:

  • Strong growth in European domiciles:
    • Luxembourg, the largest EU domicile corresponding to 60% of analysed EU alternative funds (i.e. Luxembourg, Ireland and Malta), grew by 11% between 2010 and 2013, with an addition of 169 funds.  The strongest growth came from private equity and real estate funds, with approximately 30-35% growth in funds and AuM. 
    • Ireland, the second largest EU domicile with around 21% of all the EU alternative funds analysed, grew by 58%, mainly due to an increase in the number of hedge funds. Besides, it is estimated that around 40% of hedge funds globally are administered in Ireland[2].
    • Malta shows the strongest growth amongst the EU domiciles analysed, explained by its relative small size and “newcomer” status.  It attracts niche markets within the hedge fund industry, with an average fund size below EUR 20 million. 
  • Demand for alternative investment funds under mutual fund structures; the usage of UCITS compliant structures for alternative investment strategies is estimated to have more than doubled since 2009 on a global basis.  Demand for transparency and regulation post-crisis increased the attractiveness of UCITS structures.  The number of alternative investment funds is estimated to have increased by 17% since 2010.
  • Domiciles offering “one-stop-shop” solutions attract funds at the expense of domiciles with less well-developed fund infrastructure.  With the introduction of AIFMD fund, the quality of fund administration services has become a crucial element, together with the need for an independent depository.  Overall the study therefore expects large domiciles to win over smaller domiciles with less developed fund infrastructures. 
  • Between 2010 and 2013 traditional offshore domiciles confirmed their dominant role within respective AIF asset classes, but there is no clear winner across all asset classes:
    • For hedge funds, Cayman Islands, traditionally the global home of hedge funds, is estimated to have increased its AuM share from 55% to 60% during the period of 2010 and 2013.  Luxembourg and Ireland are popular among UK and European fund managers, however Ireland is experiencing a growing number of registrations from US fund managers
    • For private equity, Delaware, which is by far the most important domicile for this alternative asset class, is estimated to account for around 57% of the analysed 5,500 funds or 69% of the EUR 1.2 trillion assets invested in private equity. In the EU, Luxembourg holds the dominant position in private equity with 90% of the analysed EU funds domiciled in the Grand Duchy. Guernsey is the third largest domicile for private equity funds by AuM, seeing high growth in the last four years and today private equity funds account for nearly three quarters of all Guernsey domiciled funds. 
    • Delaware is also the domicile of choice for the majority of real estate funds, with 67% of the analysed assets estimated to be managed by real estate funds domiciled in the US state, up from 60% in 2010.  In Europe, Luxembourg has the highest share of real estate funds amongst the European locations analysed, with an estimated 15% of local AIF assets in real estate.   

Looking forward, the report expects most of the existing trends to continue or strengthen over the coming years, fuelled by regulatory developments and investor demand. 

Mr Saluzzi concludes: “It’s clear from this that investors want the safety of regulation and we expect to see more offshore funds taking advantage of the AIFMD. After having attracted a high number of AIFM applications over the last 12 months (240), the challenge for us will be to attract more AIFs in Luxembourg. Cayman and Delaware are strong competitors but we believe our fund centre has what it takes to become the "alternative" product domicile for more and more fund managers and institutional investors.”

[1] The study examines those domiciles attracting the largest number of AIFs by number fund registrations and AuM, as well as key domiciles in the European Union (EU). These are:

  • the Cayman Islands
  • the State of Delaware in the United States of America
  • key domiciles in the EU: Luxembourg, Ireland and Malta
  • the Channel Islands comprising Jersey, Isle of Man and Guernsey
  • the rest of Caribbean Islands: Bermuda and British Virgin Islands (BVI)

[2] HFMWeek 20th Survey & IFIA, April 2013.


Download the press release in English, German of French.

Updated on 25/11/14
Share |
- Press releases

The Association of the Luxembourg Fund Industry (ALFI) today released the 2014 version of its annual real estate investment fund (REIF) survey, showing the development of the Luxembourg-domiciled REIF market as at the end of 2013.

According to the survey, 2013 was a good year for Luxembourg domiciled REIFs. 15 new Direct REIFs were launched, slightly down compared with 25 launches in 2012. Early signs for 2014 are very positive, with an additional 15 Direct REIFs launched in the first six months, bringing the total of Direct REIFs surveyed to 237, with an additional 40 Funds of Real Estate Funds completing the total survey population of 277 funds.

Marc Saluzzi, Chairman of ALFI, observes: “The sector has grown 276% since 2006, a compound annual growth rate of 21%. The continued growth in the number of REIFs in Luxembourg demonstrates that Luxembourg remains a favoured location to establish and maintain multi-national and multi-sectoral regulated real estate investment funds which continue to appeal to institutional investors and fund managers around the world.”

He continued: “The introduction of the AIFMD has impacted REIFs and the slight slowdown followed by an acceleration were expected. We believe Luxembourg continues to appeal to the global REIF industry as a domicile, as it combines investor protection with well-established industry practices at a reasonable cost.”

Key findings of the survey include:

  • Almost all of the new REIF launches were initiated by initiators in Europe with Benelux, German, and Swiss initiators again being the most active;
  • The most common target sector is still ‘multi-sector’, with, 57% of the surveyed REIFs investing in a variety of sectors, with a preference for ‘office’ at 27% and for ‘residential’ at 21% in 2013. 30% of early 2014 launches, meanwhile, were in the more traditionally preferred ‘retail’ sector.  
  • A single country investment focus still represents only 41% of the geographic investment strategies. This is a rise compared with 27% and 35% in the 2012 and 2013 ALFI REIF Surveys and supports a move toward simplification, but nevertheless underlines the suitability of Luxembourg investment vehicles for multi-national investments.The vast majority of the Direct REIFs surveyed invest in Europe, whereas eight funds invest in the Americas only and eleven in the Asia/Pacific region;
  • Although umbrella fund structures remain popular due to practical and cost considerations, the trend over the last few years has been towards a simplification of structures and strategies; as indicated by 64% of the funds surveyed having a single compartment structure.
  • In total 70% of Direct REIFs are closed-ended, reflecting the inherent illiquidity of real estate as an asset class and the difficulties of achieving investor liquidity on demand;
  • Similar to the findings of the previous two ALFI REIF surveys, average fund sizes continue to decrease, with the most common net asset value range between EUR 100 and 200 million and with the most common gross asset value range between EUR 400 and 800 million. Funds are becoming smaller, which reflects the more cautious capital raising forecasts of 2014 and preceding years. While target gearing is down in most of the ranges, the results are mixed, indicating some optimism in relation to the ability to borrow;
  • Investors are predominantly European, but a significant number also come from the Americas, Asia and the Middle East. Direct REIFs are widely distributed (but with a focus on specific geographical areas), with only 27% limited to a single country, and 24% being sold in more than six countries. The growing trend toward wider distribution confirms the global appeal of the Luxembourg real estate investment vehicles, especially those set up under the Specialised Investment Fund (SIF) regime, which has accounted for all new launches over the last 30 months;
  • Luxembourg domiciled Direct REIFs and funds of REIFs are mainly used for small groups of institutional investors, with 84% having less than 25 investors. Only 2% reported having more than 100 investors.

Download the press  release in English, German and French.


Updated on 25/11/14
Share |
- ALFI statements

ALFI replied to the ESMA Consultation paper on technical advice to the EC on delegated acts required by the UCITS V Directive.

- ALFI reply to the ESMA Consultation paper on technical advice to the European Commission on delegated acts required by the UCITS V Directive (ESMA/2014/1183) - download here

- Reply form for the Technical Advice on the delegated acts required by the UCITS V Directive - download here

Updated on 30/10/14
Share |
Displaying page 17 on 31 pages