Fund Management in LuxembourgUpdated on Tuesday 08th February 2022
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When opening an investment fund in Luxembourg or in other top jurisdictions that offer a suitable environment for the registration of investment funds, businessmen will typically decide based on the variety of funds that are available for incorporation, the capital requirement, the investment strategies that they can use, the tax advantages and obligations, but also based on the strategies for fund management.
Fund management in Luxembourg is an activity that is developed with the participation of a fund manager, who is a person that has the necessary expertise and certification to provide financial services that will ensure the proper functioning of the fund. In this article, you can find out more details on what fund management refers to.
What is fund management in Luxembourg?
It refers to the service through which a person (the investor) benefits from the knowledge of another person (the fund manager), who can make an informed decision on how to invest the assets of the first person. Thus, fund management is a procedure that is necessary when opening a Luxembourg fund, as the investor, after settting up the fund and depositing the initial capital, will need a person or a management company, to manage the said assets.
Although local and foreign investors must have knowledge in the financial sector, they will not be the persons who will handle the daily management operations made in the name of the fund; they will agree on how to use the respective assets, but most of the procedures will be done through fund management in Luxembourg.
In the list below, our team of financial advisors have prepared a short description on the main activities developed by a person who will act as the fund manager of an investment fund registered in Luxembourg. If you need more information on this subject or you are interested in how to become a fund manager, our team remains at your disposal:
- fund management is also known as asset management, because a fund manager will always have as a main activity handling the assets of a fund;
- fund management can be applied to tangible assets or intangible assets;
- the purpose of the entire system is that the manager will take the most cost efficient measures;
- the fund manager’s responsibility is to observe the value that must be invested in a project and estimate the risks associated with the said investment, in order to project the highest possible return on investment;
- fund management can be used outside of the scope of the financial sector, it can also be applied to the public sector or to businesses.
What is the data on asset management in Luxembourg?
Asset management in Luxembourg has some of the most competitive results at a global level, and this is given by the fact that Luxembourg is one of the top jurisdictions for fund industry (and the most important in Europe). The country has outstanding results for all types of funds; our financial consultants can help you register any type of fund, including the SICAR in Luxembourg. Below, we present few data on fund management in Luxembourg:
- in 2021, Luxembourg held EUR 5.75 trillion assets under management (held in investment funds), according to the data gathered by the Commission of Surveillance of Financial Sector (CSSF);
- a large part of the top 56 asset management companies have chosen Luxembourg for their operations (69.6% of them);
- Luxembourg is also an important market for the assets under management held for UCITS funds – the country accounts for 36% of all European UCITS or for EUR 4.7 trillion assets under management;
- the assets under management of regulated alternative funds in Luxembourg account for EUR 928 billion;
- in November 2021, there were more than 600 registered alternative investment fund managers in Luxembourg.
Fund management in Luxembourg – main possibilities
Foreign businessmen who want to open a Luxembourg fund will need to appoint a fund management team, in accordance with the type of fund they will set up. There are different types of funds regulated by different types of laws, and they can require a specific type of management structure.
In Luxembourg, one can appoint one of the following for fund management in Luxembourg: the authorized management company, the alternative investment fund manager or a delegated administrative agent, who must be authorized by the CSSF following a specific rule of law.
We invite you to contact our team of financial consultants if you need more information on the type of fund management you will need for you investment fund. Our team can present the main legislation applicable in this case and you can also receive legal representation in the process of registering the fund.