LUXEMBOURG Law and Practice Contributed by: Evelyn Maher, Gaston Aguirre Draghi and Djelloul Mansour, BSP
BSP 11 rue du Château d’Eau L-3364 Leudelange Luxembourg Tel: +352 260 251 Fax: +352 260 259 99 Email: marketing@bsp.lu Web: www.bsp.lu
1. Market Overview 1.1 State of the Market
The success of Luxembourg as a financial cen - tre is testament to the strong regulatory and operational environment that Luxembourg has created. Its willingness to adapt to change will ensure that, over the coming years, the industry will continue to thrive. In addition, to illustrate some recent trends, and given Luxembourg’s status as a leading pri - vate markets hub, it is well positioned for 2025 to capitalise on the new European long-term investment fund (ELTIF) 2.0 structure, regu - lated per ELTIF regulatory technical standards (RTS) as referenced in 4. Legal, Regulatory or Tax Changes , and the burgeoning worldwide trends of retailisation in private markets. Out of 132 ELTIFs as of September 2024, 84 are domi - ciled in Luxembourg, holding EUR7.7 billion in AUM (as of the end of 2023). Finally, the trend of more sustainable funds in Europe that are domi - ciled in Luxembourg keeps evolving. This trend towards more sustainable investing is expected to continue during 2025, as the AUM of asset managers with sustainable funds domiciled in Luxembourg jumped 12.3% from 2022 to the end of June 2024.
As the second-largest fund market in the world after the USA, Luxembourg has earned itself a reputation for stability, a business-friendly envi - ronment and excellence in the provision of ser - vices to the investment management industry. The world’s leading asset managers have cho - sen Luxembourg as a centre for their interna - tional fund ranges, and Luxembourg regulated funds are now distributed in more than 80 coun - tries throughout the world. Luxembourg had approximately EUR5.5 trillion in assets under management (AUM) in regulated funds as of 31 May 2024. Since the first Undertakings for Collective Invest - ment in Transferable Securities (UCITS) Directive in 1985, Luxembourg has been at the forefront of the implementation of European financial legislation, showing an ability to evolve and adapt quickly to changing requirements. There now exists a wide choice of vehicles, allowing managers to structure a fund (both alternative investment funds (AIFs) and retail funds) in Lux - embourg that best suits their own needs as well as the needs of their investors.
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