By Robin Pagnamenta – It may be one of Europe’s smallest countries, but Luxembourg has never lacked for ambition.

The Grand Duchy is set to capture an important chunk of the growing global market for alternative investment funds.

Luxembourg is widely regarded as a prime location for investment in private assets such as private equity, private debt, real estate and infrastructure. Much of its success in this field can be attributed to innovative investment vehicles which are success stories in themselves, and a perfect match for the dynamism of private assets investment.

By Jevgeniy Nesch and Virginie Leroy, AKD – Private equity and venture capital are amongst the key investment fund strategies showing the strongest growth in the last decades. Even if at the beginning of the Covid-19 pandemic, some PE and VC funds faced challenges such as a reduction in the activity of their portfolio companies, valuation difficulties, exchange rate volatility and liquidity, most of the fund managers were able to adapt and address those issues in an efficient, rational, cost-effective and prudent manner. In addition to the handling of the day-to-day challenges, PE and VC fund managers have also discovered new opportunities where they might help to navigate the businesses out of economic emergencies, while providing investors with attractive returns and necessary protection.

If any jurisdiction can claim to be the home of the global fund industry, it is Luxembourg. The Grand Duchy is the second largest investment fund centre worldwide and the first in Europe, with an 8.8 per cent global market share in 2020 and is a prime location for alternative investment funds.

Visitors to Luxembourg are often surprised and pleased to discover that public transport is free. Step onto a tram in Luxembourg city, and there is no conductor to pay, and no machine to stamp tickets.

By Dr Marcus Peter & Irina Stoliarova – 2020 was a challenging year for the Luxembourg funds market. Despite a strong start in January and February, the Covid-19 pandemic caused a slowdown to fund set-up and net asset developments due to valuation issues and travel restrictions. However, it should be noted that the Luxembourg investment fund industry remained robust given the market regained growth starting mid-2020 and continuing into the third quarter of 2021. 

By Stephane Pesch – The private equity and venture capital industries have shown tremendous growth and have attracted lots of attention and new investors over the last years due to their inherent qualities (strong performance and returns, long term approach, focus on value creation, financing of the real economy and innovation).

One of Luxembourg’s big advantages has always been its small size, which has allowed successive governments to introduce new rules with a speed and nimbleness that bigger nations would struggle to replicate.