New findings from the 23rd edition of the Monterey Insight 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.
The Luxembourg-domiciled fund industry continued a steady growth by 3% to US$3,976.9 billion (€3,771.2bn) over 2016, up from US$3,857.4 billion (€3,551.1bn) in 2015. Of the total assets in 2016, SICARs contribute a total market size of US$44.6bn and Specialised Investment Funds (SIFs) contribute US$462.2bn with 3,359 funds, up by 8% from US$424.5bn (3,275 funds).
This year Monterey Insight has introduced the highly anticipated fund and assets information on reserved alternative investment funds (RAIF) and a new ranking on Transfer Agents.
The newly launched Luxembourg investment fund structure RAIF, reached a total of US$1.8bn in assets with a total fund count of 33 funds, whose performance will be closely monitored during the next year.
The overall number of sub-funds reached 14,481, an increase of 4% from the 13,920 of the previous year.
Concerning the ranking of service providers, State Street remains in first position as the largest administrator by total net assets (US$703.2bn), followed by J.P. Morgan Bank in second position (US$548.8bn), and BNY Mellon (US$304.5bn) ranked third ahead of BNP Paribas (US$285.6) in fourth.
David Suetens, EVP and Country Head of State Street in Luxembourg commented: “In today’s digital age, we put our clients front and center of everything we do and partner with them to unlock new opportunities for cross-border distribution. We are very proud to further strengthen our position this year as No.1 fund administration, transfer agent provider and No. 2 for custody services in Luxembourg. For the first time ever, Monterey Insight’s newly transfer agent ranking truly demonstrates how IFDS and State Street united employees deliver high standard services our clients expect.”
 IFDS Luxembourg is a joint venture between DST and State Street
As has been the case in the past 10 years or more, Custodians J.P. Morgan Bank have the largest proportion of assets under custody (US$761.7bn) ahead of State Street (US$704.7bn) and Brown Brothers Harriman (BBH) (US$331.2).
Michael Fox, Head of Custody and Fund Services Luxembourg comments “At J.P. Morgan, we are focused on being a powerful partner to our clients and our Luxembourg platform is fundamental to this. Our sustained leadership positions in the region, including the continued number one Custodian title and a leading fund administrator, positions us perfectly to support our clients. In the current dynamic market environment, having the ability to innovate and be nimble is key. Luxembourg is critical to this strategy and we are excited to continue growing our service offering in the region.”
Newly added to the report, the largest Transfer Agent is State Street with a total of US$555.8bn in assets and a total of 1,503 funds, followed by RBC Investor Services Bank (US$489.5bn) and in third position J.P. Morgan Bank (US$382.5bn).
PwC maintained its lead, auditing 5,878 sub-funds, ahead of KPMG and Deloitte.
Steven Libby, partner and Asset and Wealth Management Leader at PwC Luxembourg states "We are proud to top the league for funds services in Luxembourg. Leading in all categories, by assets with US$2,076bn and by number of funds with 5,878 sub-funds, ahead of the other Big 4, is testimony to our expertise in both mainstream and alternative funds. We continue to use this privileged position to help asset managers to solve important issues and to contribute to building trust in the fund industry."
For legal advisers, Arendt & Medernach have maintained first place by number of funds (with 3,788 sub-funds), followed by Elvinger, Hoss & Prussen (with 3,346 sub-funds). However looking at the market share by total net assets, Elvinger, Hoss & Prussen leads in first position as has been the case during the last decade.
According to Isabelle Lebbe, Head of Investment Management, Arendt & Medernach, “2016 confirmed the expansion and diversification of activities within the asset management industry. We are proud to advise more than one third of the Luxembourg market and grateful for the trust placed in our teams. Providing tailor-made advice and innovative solutions to our clients remains our top priority for the coming years.”
In the Manco/ AIFM rankings, for the ManCo’s (UCITS/Part I only) we have J.P. Morgan Asset Management in first position with a total net assets of US$291.2bn followed by Deutsche Asset Management (US$154.3bn) in second and BlackRock (US$143.2bn) in third. And in the AIFM rankings (Part II/SIF & SICARs), Deka International stands in first position with a total net assets of US$25.3bn followed by Universal –Investment Luxembourg (US$22.0bn) ranked second and Cadelux (US$18.2bn) ranked third.
Among fund manager companies, the largest promoter/initiator of Luxembourg domiciled schemes is J.P. Morgan (US$294.6bn), followed by Deutsche Asset Management (US$176.5bn) and in third position BlackRock Financial Management (US$145.5bn).
For SICARs, as per last year the US based Carlyle Group continues to be the largest promoter and administrator of SICARs with $6.1bn in assets. Followed by Partners Group (US$5.0bn) and Trief Corporation (US$4.5bn) as promoters in second and third position for SICARs.
As last year Equity funds, at US$1,145.7bn are still the most popular asset class accounting for 29% of the total assets in Luxembourg, followed by bond funds which have increased in numbers and assets to 3,018 and US$1,140.8bn. Cash products are on the rise this year with a growth of 8% and alternative Investments increased this year by 5%.
Among newly launched funds, out of 1,591 funds launched during 2016 with a total assets of US$149bn and increase of 9% from last year. The top five sectors were traditional investments such as Global Bonds and Global Mixed Equities Bonds with a total assets of US$ 86.6bn accounting for 58% of the assets launched in 2016.
Karine Pacary, Managing Director, Monterey Insight, comments, “Our 23rd edition of the Monterey Luxembourg Fund Report has highlighted how 2016 has proved to be a year of continuous steady and innovative growth for the Luxembourg Fund Industry in a developing economic landscape. We are pleased to have introduced to this year’s Monterey report statistical analysis on the new regulatory additions; RAIFs & LPs and a new ranking on Transfer Agents. Our financial research on ManCo/AIFMs which was introduced for the first time last year, has been extremely well received and our new charts on new business have proved to be insightful.”
Please note the figures listed above include UCITs, SICARs and SIFs unless indicated otherwise.
For more information, please contact:
Managing Director, Monterey Insight
Tel. +44 (0)845 625 3863
Notes to Editors
Monterey Insight is an independent fund research company that provides comprehensive statistical analysis of the Luxembourg, Ireland, Guernsey and Jersey fund industries: the only complete reference of service providers for all funds serviced in these jurisdictions.
As at 31st December 2016, leading service providers for Luxembourg funds were as follows:
Source: Monterey Insight, Luxembourg Fund Report.