Annual Report 2023/2024
WELCOME
Growing the fund industry by embracing change and collaboration
We are thrilled to present to you the ALFI Annual Report 2024, a comprehensive reflection of our organisation's work and accomplishments and that of its members and stakeholders. It covers the period between 01 June 2023 and 31 May 2024.
To our esteemed members, we extend our sincerest gratitude for your unwavering support and commitment. Your invaluable contributions have propelled us forward, shaping our initiatives and guiding our progress.
We invite you to watch Britta Borneff, ALFI Chief Marketing Officer, sharing with you interesting information that is contained in this report.
Enjoy!
OVERVIEW
by Britta Borneff, ALFI CMO
In this video, we delve into some key trends, regulatory impacts, and technological advancements shaping the investment fund industry.
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With €14 trillion of household savings sleeping in cash and bank deposits across Europe, the industry faces a significant opportunity and challenge to mobilise these funds into investments by educating the public about the benefits of investing, promoting financial literacy, building trust through transparency, simplifying the investment process through digital platforms, and demonstrating robust risk management practices to instill confidence.
We also discuss the recent regulatory changes, particularly AIFMD II, which aims to enhance investor protection, market efficiency, and transparency. Some of the main changes include enhanced liquidity, management requirements for open-ended funds, the introduction of a new regime for loan-originating AIFs, and enhanced governance and substance requirements for AIFMs. Over the past year, investor behaviour has shifted due to macroeconomic factors and technological advancements, leading to increased risk aversion, a focus on sustainable investing, an emphasis on cost reduction and passive investing, growing interest in alternative investments, and enhanced access to information through online resources.
Additionally, we highlight how technology brings enhanced efficiency to the fund industry by reducing manual intervention, saving time, minimising errors, and cutting operational costs. Looking ahead, the next big challenge is attracting young, tech-savvy professionals proficient with digital tools and data analytics to align talent with technology, reshaping the future of the investment industry. Stay tuned as we unpack these critical topics and explore how the investment fund industry can stay relevant and thrive in the evolving financial landscape.
FOREWORD
by Jean-Marc Goy, ALFI Chairperson and Serge Weyland, ALFI CEO
Over the past year, the asset management industry has experienced significant changes, with the Association of the Luxembourg Fund Industry (ALFI) adapting and evolving in response. ALFI Chairman Jean-Marc Goy and CEO Serge Weyland highlighted several key developments in this interview.
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One major change was the restructuring of the ALFI board to become more diverse and representative, now consisting of 29 members instead of 24, including various industry stakeholders. Additionally, there were significant leadership changes, including the appointment of a new CEO and the recruitment of a new director to replace the outgoing Deputy CEO, Emmanuel Gutton.
ALFI’s priorities focused on four main pillars: shaping regulation, developing best practices, identifying new business opportunities, and promoting Luxembourg internationally. Efforts in shaping regulation included significant work on AIFMD II and ELTIFs, which are expected to impact the industry heavily but also create opportunities. In terms of best practices, ALFI worked with partners like the ABBL to navigate regulations such as DORA.
To drive growth, ALFI emphasised strengthening its representation, enhancing dialogue with the Minister of Finance, and promoting Luxembourg as a financial centre. The new government and active Minister of Finance were noted for their dynamic approach and collaboration with ALFI.
Geographically, ALFI has targeted expansion in Latin America, Asia, and the US, focusing on establishing structures in Luxembourg to channel investments into these regions and promoting Luxembourg’s financial products.
To remain competitive, Luxembourg aims to be the world’s leading cross-border domicile for funds, accommodating a diverse range of investment strategies and asset classes. The country is addressing challenges in talent retention and attraction, leveraging its central European location to draw in expertise from across the region. This comprehensive approach ensures Luxembourg’s position as a go-to domicile in the global financial landscape.
We invite you to listen to this podcast with ALFI CEO Serge Weyland and ALFI Chairperson Jean-Marc Goy, where they exchange their ideas on topical industry matters with a focus on the Capital Markets Union 3.0.
2023/2024 AT A GLANCE
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STATE OF THE INDUSTRY
ALFI ORGANISATION
CORPORATE RESPONSIBILITY AND CITIZENSHIP
A taste of ALFI's governance best practices
Over the past year, we have made significant steps in our commitment to corporate social responsibility (CSR). The implementation of a new CSR strategy and the renewal of our CSR label by the Institut National du Développement Durable (INDR) underscore our dedication to sustainability and social impact.
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The keystone of our progress lies in the development and execution of a comprehensive CSR strategy. Together with our stakeholders, we have identified key areas where our association could make meaningful contributions to the Fund Industry and to the society at large, while aligning with our core values. This strategy not only serves as a roadmap for our CSR initiatives but also embodies our commitment to responsible business practices.
Furthermore, the acknowledgment and validation of our efforts by Institut National du Développement Durable (INDR) for the fourth consecutive time since 2014, highlights the benefits of our CSR endeavours. Beyond the label, our initiatives have positively impacted both our organisation and the Fund community we serve. From shaping regulations and frameworks that guide businesses and organisations towards responsible and sustainable practices (link to Désirée’s part) to supporting education, training, diversity, and human rights, we have made meaningful contributions to society while fostering long-term value for our members and our stakeholders.
As we reflect on our achievements, we are thrilled to continue our journey toward corporate social responsibility. Our commitment extends to exploring new paths, such as measuring our environmental footprint and supporting education through initiatives like sponsoring of a new Master's program in Private Equity with the University of Luxembourg. With enthusiasm and dedication, we look forward to fostering our impact in the years ahead.
CSR actions
A UPDATE ON FINANCIAL LITERACY
Listen to Mihaela Mercier, ALFI Investor Forum Coordinator, addressing the importance of improving financial literacy to enhance retail investors' access to investment products, and incentivis retirement savings. Activating long-term capital pools is essential for financing innovation, supporting economic growth, and ensuring the resilience of European capital markets.
HIGHLIGHTS OF OUR WORK
Within this section of the annual report, our focus lies on the organisational objectives that have experienced notable advancements over the past year. By highlighting these key areas of progress, we aim to underscore our commitment to doing great work and always getting better.
Communication
ALFI makes use of a broad range of channels to communicate with its members and inform industry experts and the broad public about the latest developments in the Luxembourg investment fund sector.
The typology of the content is diverse, ranging from publications to posters and videos, always keeping in mind its mission to lead industry efforts to make Luxembourg the most attractive international investment fund centre.
