New findings from the 27th edition of the Monterey Insight Luxembourg Fund Report, as compiled by Monterey Insight, the independent fund research company, reveal the market shares of all services providers in Luxembourg’s funds industry.
Please note all findings below include regulated funds (SIFs, UCITS/UCIs and SICARs) unless indicated otherwise as at 31-Dec-2020.
The total net assets for regulated collective investment funds domiciled in Luxembourg increased from US$5,351.9bn to US$6,145.3bn in 2020. This represents an increase of 14.8% in US Dollar or equates to a Euro increase of 5.1% from €4,777.3bn in 2019 to €5,022.5bn in 2020. Of regulated funds, the largest growth of assets during the year went to UCITS with +15.7% followed by SIF with +11.7%.
The overall number of regulated sub-funds reached 14,651, a negligible decrease of 2.3% from the 14,991 of the previous year. This slight decrease was most probably to the benefit of unregulated vehicles such as RAIFs which have seen their number increase by 46.0% with 1,530 active funds and sub-funds in comparison to 1,048 last year. The attractiveness and trustworthiness of unregulated structures sees their ascension continue year-on-year. RAIFs enjoyed a 58% increase of assets to reach US$193.0bn from US$122.2bn last year. LuxLPs reached US$291.0 from US$167.8bn with 1,740 sub-funds compared to 1,303 sub-funds in 2019.
As was the case in the previous year, for regulated funds, equity fund products are once again the most popular by AUM (US$2,008.2bn) exceeding bond funds which have assets of US$1,703.6bn. This represents an increase of 22% and 15% respectively. Not surprisingly, ESG made a whopping increase of 117% reaching US$350.3bn and over 884 funds and sub-funds.
Turning to the service providers, for fund manager companies, the largest promoter/initiator of Luxembourg regulated domiciled schemes is J.P. Morgan (US$435.5bn). Amundi reasserts its second position (US$246.5bn) with DWS International in third position (US$226.7bn). Among the Luxembourg located ManCo/AIFM rankings of regulated schemes, J.P. Morgan Asset Management (Europe), as has been the case for a number of years, retain their top position with total net assets of US$435.1bn followed by DWS Investment (US$225.2bn) in second place. UBS create the surprise and after taking the fourth place last year, gain another rank this year to jump to third position with US$224.2bn. Amundi Luxembourg follow closely in fourth position with US$216.7bn.
Christoph Bergweiler, Managing Director and CEO of JPMorgan Asset Management Europe S.à r.l. (JPMAME) in Luxembourg:
“We’re delighted to maintain a leading position which builds on more than thirty years of on-the-ground experience in Luxembourg, overseeing client assets. Luxembourg remains a critical hub for excellence in cross-border investment solutions, as well as the industry-leading provision of Alternative Investment Fund Management, and we look forward to continuing to play a growing role in the provision of investment services that support our institutional and retail clients across Europe and internationally.
This year again State Street maintain their lead position for all the three rankings of fund administration, custody and, together with IFDS, transfer agent.
Riccardo Lamanna, Country Head of State Street in Luxembourg:
“With our presence in Luxembourg for more than 30 years, State Street has shown its strong commitment to asset servicing and supporting our clients’ cross-border funds. We are proud that these ambitions are reflected in our continuous market leadership in fund administration, custody and transfer agency service. Our leading industry position is a testament to our team’s ability to continuously innovate and enhance our services based on our clients’ evolving needs.
We will continue to increase our capabilities and scale to further strengthen State Street’s position as the front-to-back partner of choice for clients with complex global needs."
In more detail, the top positions remain unchanged for the fund administration ranking: State Street is first by total net assets (US$1,210.2bn) followed by J.P. Morgan Bank in second position (US$938.5bn) and BNY Mellon (US$419.3bn) ranked third ahead of BNP Paribas (US$378.8bn) in fourth.
Among custodians/depositary, State Street secure this year again the top position with the largest proportion of assets under custody with US$1,214.0bn, followed by J.P. Morgan Bank with US$1,175.4bn and in third position by Brown Brothers Harriman (BBH) with US$484.6bn. BNP Paribas follow in fourth position with US$451.7bn.
Regarding the transfer agents ranking, no changes since last year, however IFDS / State Street pass the trillion US$ mark and top the rankings with US$1,195.3bn of assets followed in second position by RBC Investor Services Bank with US$766.4bn. CACEIS maintain their third position for the second year with US$466.7bn ahead of J.P. Morgan Bank with US$440.5bn.
Among audit firms, as it has been the case for a few years, PwC maintain their lead in auditing with a total of 5,949 sub-funds, ahead of KPMG with 2,927 sub-funds. EY keep their third position with 2,757 ahead of Deloitte with 2,517 sub-funds.
Oliver Weber, Partner and Asset and Wealth Management Leader at PwC Luxembourg, says: "We are still seeing a strong resilience of the Luxembourg mutual fund industry despite the COVID-19 crisis. Luxembourg as a financial center has continued to increase its AuM in the funds industry with total net assets for regulated collective investment funds domiciled in Luxembourg increasing from US$5,351.9bn in 2019 to US$6,145.3bn in 2020. Of regulated funds, the largest growth of assets during the year went to UCITS with +15.7% followed by SIF with +11.7%.
ESG plays a large factor in this success, with an increase of 117% reaching US$350.3bn and over 884 funds and sub-funds. ESG - and more wider Sustainable Finance - is a priority for our clients and we have invested massively in this area. Existing players are extending their footprint and new players are also coming into the market, both fueled by a Luxembourg business and regulatory environment that has showcased it’s agility to cope with fast-changing stakeholder requirements.
We are pleased to see that among audit firms, we have maintained the lead in auditing with a total of 5,949 sub-funds. Our audit team never rests on its laurels and has invested in numerous audit transformation initiatives to redefine the client experience.
As the largest professional services firm serving the Asset and Wealth Management industry globally and in Luxembourg, our PwC team stands at the ready to help our clients in critical issues and assist them to stay competitive in this challenging environment. We are with our clients throughout the lifecycle of their activities, advising them in coping with challenges and launching new services to support them in the widening of their operations, of their global distribution and new product launches."
For legal advisers, Arendt & Medernach maintain their lead by number of funds with 4,413 sub-funds) followed by Elvinger Hoss Prussen with 3,567 sub-funds.
Gilles Dusemon, Partner, Investment Management at Arendt & Medernach commented:
“As the world continues to face the challenges and rippling effects of the pandemic, the global funds market is also being impacted but in very different ways. Looking ahead we see that the focus of investors and sponsors is shifting towards strategies that incorporate new investment themes and sustainable objectives in particular. As significant regulatory changes are ongoing, we are looking forward to helping our clients embrace positive change and assist them in navigating the emerging tax, legal and regulatory landscape that is developing at a rapid pace. We thank our clients for their continued trust, which has made us once again the leading funds legal advisor in Luxembourg.”
As in previous years, Elvinger Hoss Prussen is in first position by the total amount of net assets with US$1,971.5bn and Arendt & Medernach in second position with US$1,883.4bn.
Karine Pacary, Managing Director, Monterey Insight, commented:
“In our 27th consecutive publication, we are pleased to share the new results of the Luxembourg fund industry in our Monterey Luxembourg Fund Report 2021. In the current climate, and with the unprecedented situation of COVID-19, the Luxembourg fund industry has proved its resilience and once again demonstrated notable growth.
This latest edition demonstrates the ever increasing appetite for alternative products in all categories as illustrated by the sustained growth of asset classes such as Private Equity/Venture Capital, Private Debt, Real Estate, Hedge funds and Infrastructure.
The heightened status of RAIFs are again in the spotlight (along with unregulated LuxLPs), as their number of funds and assets continue a constant rise (an almost 60% increase from last year). Their contribution to overall assets growth is of ever more importance and their take-up is helping to reshape the future fund landscape of Luxembourg. Unsurprisingly, ESG vehicles are gaining in popularity especially with various developments from the regulator helping to provide better transparency for these funds. The increasing demand for an ESG investment element in funds ensures it will rapidly become a must-have and a future driven attribute in the make-up of investment products.”
Please note the figures listed above include UCITS, SICARs and SIFs unless indicated otherwise.
For more information, please contact: Karine Pacary Managing Director
Tel. +44 (0)845 625 3863. Email: karine.pacary@montereyinsight.com
Notes to Editors
For LuxLPs and SOPARFI, we have included schemes which we believe are classified as an investment fund product, especially focusing on those with an appointed AIFM. However, RAIFs and unregulated Luxembourg Limited Partnerships are excluded from the table rankings below.
Monterey Insight is an independent fund research company that provides comprehensive statistical analysis of the Luxembourg, Ireland, Guernsey, Jersey and UK fund industries: the only complete reference of service providers for all funds serviced in these jurisdictions.
As at 31st December 2020, leading service providers for Luxembourg funds were as follows (the below ranking includes SIFs, UCITS/UCIs and SICARs):
