Luxembourg is well-reputed as a successful onshore financial centre and the second largest hub for investment funds in terms of AuM after the USA. From an investment funds perspective, the national government and regulator (CSSF) has been relatively adept in implementing EU UCITS legislation thus far.
Since 2003 and the transposition of UCITS III into Luxembourg international law, the role of the Luxembourg jurisdiction as a hub for investment funds was established. Under UCITS IV and the establishment of the management function i.e. allowing funds to be domiciled in one jurisdiction but distributed in all EU jurisdictions, this again fuelled the funds industry in the Grand Duchy.
Despite the crisis between 2008-2011, total assets under management within Luxembourg structures remained above 2.5 trillion US dollars and in 2014, AuM now exceeds 3.5 trillion. 2014 was also an important year for alternative asset managers with the transposition of the AIFMD into Luxembourg national law on the 22 July 2014.
Alternative assets remain only a fraction of total assets but are considered to be a strong growth area for the future. As of October 2014, most service providers focusing on alternative assets are experiencing strong growth.
The Luxembourg regulatory regime has continued to evolve fulfilling the waves of EU regulatory requirements whilst maintaining a high level of accessibility and adopting a business-like approach to new structures. The Luxembourg brand has the confidence of both investors and regulators across the globe.