Luxembourg’s fund industry posted its fifth consecutive year of double-digit growth in both euro and US dollar terms in 2007 despite difficult market conditions in the second half of the y
Luxembourg’s fund industry posted its fifth consecutive year of double-digit growth in both euro and US dollar terms in 2007 despite difficult market conditions in the second half of the year, according to the 14th edition of the Luxembourg Fund Encyclopaedia first published by Fitzrovia International, now part of Lipper.
Assets in Europe’s largest fund domicile grew by 23.8 per cent to USD3.02trn (EUR2.07trn) at the end of last year, up from USD2.44trn (EUR1.85trn) in 2006. Specialised Investment Funds, largely alternative investment vehicles launched under a regime introduced in February 2007, contributed USD205.4bn to the total, nearly twice the amount that funds under the previous institutional funds law of July 1991 contributed the previous year (USD104.7bn).
Lipper notes that growth in mainstream funds has been complemented by alternative investment vehicles such as real estate funds, protected capital funds and funds of hedge funds, all of which have seen year-on-year increases in assets of more than 40 per cent.
‘While assets invested in SIFs have nearly doubled over one year, the industry as a whole saw growth across different asset classes, which should help in current, tougher market conditions,’ says Ed Moisson, director of fiduciary operations at Lipper.
Among service providers, JPMorgan Bank maintained its position as the largest administrator by total net assets with USD351.1bn, followed by RBC Dexia with USD245.4bn, Fastnet with USD210.4bn, UBS Fund Services with USD204.3bn and European Fund Administration with USD166.9bn.
JPMorgan Bank also retained first place for custody services with USD438.6bn, ahead of State Street with USD237.6bn, RBC Dexia with USD235.1bn, UBS with USD204.3bn and Brown Brothers Harriman with USD187.3bn.
PricewaterhouseCoopers remains the leading auditor to Luxembourg funds with a total of 4,943, far ahead of KPMG (1,994), Ernst & Young/Compagnie de Revision 1,914 and Deloitte (1,840), with BDO Compagnie Fiduciaire the leading auditor from outside the big four with 199.
Among law firms serving the sector, Arendt & Medernach is legal advisor to 2,752 funds, just ahead of Elvinger Hoss & Prussen with 2,602, followed by Linklaters (1,082), Bonn Schmitt Steichen (572) and Kremer Associés & Clifford Chance (265). However, Lipper says Elvinger Hoss & Prussen has maintained its leading market share by total net fund assets.
Money-market funds attracted the highest volume of new assets (USD24.8bn) last year, Lipper says, while there were more funds of funds launched than any other product type with 255. The six largest promoters of Luxembourg-domiciled funds all have total net assets exceeding USD100bn, with JPMorgan (USD212.0bn) and UBS (USD193.5bn) followed by Deutsche Bank/DWS, DekaBank, Pioneer Investments and Fidelity.
