Paperjam Plus - Alfi

ALFI Focus on global fund distribution 2021 Edition

Banque de Luxembourg, société anonyme – 14, boulevard Royal – L-2449 Luxembourg – R.C.S. B5310

“You have the skills to manage and grow a successful fund.

We have the skills to handle all the rest.”

To find out more about our dedicated services for funds investing in Private Equity and Real Estate, visit banquedeluxembourg.com or call +352 499 24 4949

Édito

Maison Moderne ™

www.maisonmoderne.com TEL. (+352) 20 70 70 COURRIER BP 728, L-2017 Luxembourg BUREAUX 10, rue des Gaulois Luxembourg-Bonnevoie 10, avenue de la Liberté Luxembourg-Gare FONDATEUR

Mike Koedinger CEO

Geraldine Knudson

DIRECTEUR ADMINISTRATIF ET FINANCIER

Etienne Velasti Rédaction

press@paperjam.lu DIRECTEUR DE LA PUBLICATION

Mike Koedinger

RÉDACTRICE EN CHEF

Nathalie Reuter

SECRÉTAIRE DE RÉDACTION

Jennifer Graglia RÉDACTEUR

Marc Fassone FREE-LANCES

Alex Barras, Quentin Deuxant, Sébastien Lambotte, Michaël Peiffer, Jeanne Renauld CORRECTION

Lisa Cacciatore, Sarah Lambolez, Manon Méral, Elena Sebastiani PHOTOGRAPHES

Romain Gamba, Matic Zorman Brand Studio DIRECTEUR DU BRAND STUDIO

Youcef Damardji

STRATEGIC BUSINESS DEVELOPMENT ADVISOR

Francis Gasparotto

DIRECTEUR DE LA CRÉATION

Jeremy Leslie

DIRECTEUR ARTISTIQUE

Marielle Voisin MISE EN PAGE

Juliette Noblot

ILLUSTRATION COVER

Salomé Jottreau

natureOffice.com | DE-261-JYACEBD

Tous droits réservés. Toute reproduction, ou traduction, intégrale ou partiel­le, est strictement interdite sans l’autorisation écrite délivrée au préalable par l’éditeur. © MM Publishing and Media SA (Luxem­ bourg) Maison Moderne ™ is used under licence by MM Publishing and Media SA — ISSN 2354-4619 Conformément à l’article 66 de la loi du 8 février 2004 sur la liberté d’expression dans les médias, la présente mention est obligatoire « une fois par an, au pre­mier numéro diffusé ». Nous avons choisi de la publier chaque mois. La société éditrice de Paperjam est détenue indirec­tement, par une participation excédant 25 %, par Mike Koedinger, éditeur domicilié au Luxembourg. La direction générale et la gestion journalière sont de la respon­ sabilité de Geraldine Knudson.

ALFI 2021

Tous les signaux sont au vert Du 31 octobre au 12 novembre prochains, tous les yeux seront fixés sur la COP26 – la 26e conférence des parties des Nations unies sur le changement climatique. Il est attendu que les pays participants annoncent de nouveaux engagements afin de réduire les émissions de carbone de 45 % d’ici 2030.

Un objectif ambitieux. Qui demande d’énormes moyens. On le sait, les budgets nationaux sont actuellement étendus à leur maximum. C’est là que l’industrie financière doit prendre le relais.

La finance durable a actuellement le vent en poupe.

Pour différentes raisons : l’engagement – voire le militantisme pour certains – des acteurs et des investisseurs pour l’essentiel. De la discussion poussée au militantisme actionnarial, ce sont de nouveaux champs d’action qui s’ouvrent.

Qu’il convient d’encourager. Cette année est celle où « ça passe ou ça casse » pour la lutte contre le changement climatique, a d’ailleurs averti le secrétaire général de l’Onu, António Guterres. À une époque, certaines populations étaient invitées à voter avec leurs pieds. On pourrait aujourd’hui inviter investisseurs et épargnants à voter avec leurs bas de laine. Pour toujours aller de l’avant.

Auteur MARC FASSONE

3

30 years of being your trusted partner in Luxembourg Building on our international law and tax expertise, we provide the investment management industry with pragmatic and innovative solutions.

Working together makes the difference.

www.loyensloeff.lu

Sommaire

06

16

LE JOUR OÙ

CARTES BLANCHES

Photo

Romain Gamba

… J’ai découvert le monde des fonds luxembourgeois

10

INTERVIEW AVEC CORINNE LAMESCH

« La transition vers le durable, une opportunité extraordinaire »

Partie I

26

INTERVIEW CROISÉE DE CLAUDE KREMER ET TANGUY VAN DE WERVE

« Pour rester compétitive, l’Union européenne doit renforcer son marché »

34

CARTES BLANCHES

Partie II

46

INTERVIEW CROISÉE DE JIM FITZPATRICK ET SALLY WONG

« Nous cherchons à nous aligner sur les pratiques luxembourgeoises »

52

CARTES BLANCHES

Partie III

64 AWARDS

The Broadridge Distribution Achievement Awards recognise outstanding performance in the fund distribution industry

66

PROGRAMME

Retrouvez l’agenda de la Global Distribution Conference

74

FORECAST

Quels grands rendez-vous pour les fonds en 2022 ?

La présidente de l’ALFI, Corinne Lamesch, évoque dans son interview l’évolution et les enjeux à venir du secteur des fonds au Luxembourg.

ALFI 2021

5

Le jour où

... J’ai découvert le monde des fonds luxembourgeois Riccardo Lamanna vient d’être nommé country head de State Street Luxembourg. Il évoque l’époque durant laquelle il a découvert et appris à connaître l’industrie des fonds luxembourgeois.

ALFI 2021

Une Place luxembourgeoise unique C’est d’ailleurs pourquoi tous les grands gestionnaires d’actifs et fournisseurs de fonds d’investissement ont un pied au Luxembourg ! La Place luxembourgeoise est unique. Elle offre la possibilité de créer et distribuer des fonds innovants et efficaces, qui sont reconnus à l’international. Elle permet d’accéder à de grands talents.

Et elle s’appuie sur une régulation qui veille à faciliter le bon développement du business et qui cherche à permettre aux gestionnaires d’actifs de proposer les structures les plus innovantes possibles, rapidement, et ce sans jamais délaisser les contrôles attendus d’un régulateur.

Pour un professionnel des services financiers, être au Luxembourg et diriger un marché aussi important pour State Street, c’est à la fois un aboutissement et un grand challenge.

Je suis très heureux d’être ici.

Auteur J. R.

6

Matic Zorman

connaissances, des capacités et des compétences sans égales.

Photo

J’ai commencé à connaître le marché luxembourgeois en 2007, lorsque je suis devenu head of the Italian securities services business au sein d’Intesa Sanpaolo. À l’époque, j’ai été amené à comparer le marché des fonds italiens avec les marchés offshore. Et ma première impression, je dois bien l’admettre, n’était pas très positive. Quand vous dirigez un business italien et que vous voyez la progression des fonds créés et distribués à l’étranger, notamment au Luxembourg, comparativement à ceux émis localement, ce n’est en effet pas très bon pour vous…

Mon regard sur l’industrie des fonds luxembourgeois a toutefois évolué au fil des ans. Lorsque j’ai commencé à être actif sur des marchés à la fois onshore et offshore, j’ai en effet réalisé la dynamique et la plus-­value qu’un marché étranger peut apporter à un marché local ainsi que l’importance d’y être présent.

Chaque partie joue son rôle et leur combinaison donne de la valeur à l’industrie de l’asset management, en permettant d’associer les bons produits, pour l’investisseur final.

Je me suis rendu compte que le Luxembourg avait développé, au cours de ces dernières décennies, des

Entrez dans le futur avec les ETF thématiques de Lyxor

Le futur de l’investissement commence aujourd’hui Le monde change plus vite que jamais et vos investissements doivent pouvoir résister à l’épreuve du temps.

La gamme d’ETF thématiques de Lyxor combine le big data, l’intelligence artificielle et les connaissances humaines pour vous offrir une exposition à la croissance de l’économie numérique (Digital Economy) et des technologies de rupture (Disruptive Technology), au changement urbain avec la mobilité du futur (Future Mobility) et les villes intelligentes (Smart cities) et aux habitudes de consommation propres aux Millennials.

Prenez une longueur d’avance avec Lyxor et entrez dans le futur.

Explorez notre gamme d’ETF thématiques LyxorETF.lu/thematics A l’attention des investisseurs professionnels. Les ETF présentent un risque de perte en capital.

Source : Lyxor International Asset Management. Société par actions simplifiée, Tours Société Générale, 17 cours Valmy, 92800 Puteaux (France), RCS 419 223 375 Nanterre, est une société de gestion de portefeuille agréée par l’Autorité des marchés financiers sous le numéro GP0424 et conforme aux dispositions des Directives OPCVM (2009/65/CE) et AIFM (2011/61/EU). Pour plus d’informations sur les risques spécifiques liés à ces ETF nous vous recommandons de consulter les prospectus ainsi que les DICI disponibles en français sur le site www.lyxoretf.com.

Brand Voice

Les fonds de dette privée en soutien à l’économie La dette privée se positionne comme un moteur essentiel de la relance, et ce alors que les banques sont toujours contraintes à la prudence. Dans ce contexte, le marché des fonds de dette privée connaît une croissance continue tandis que ses acteurs gagnent en maturité.

Dette privée

Contenu sponsorisé par ARENDT & MEDERNACH

Depuis plusieurs années, l’intérêt pour les fonds de dette privée est grandissant. « Il est devenu plus difficile, pour des petites et moyennes structures, d’emprunter auprès des banques pour financer leur projet, explique Nicolas Bouveret, Partner, Investment Management au sein d’Arendt & Medernach. Les emprunteurs, à la recherche de solutions de financement flexibles, se sont alors tournés vers les investisseurs privés. » Le législateur européen a lui-même reconnu l’intérêt de renforcer les capacités de financement non bancaire à l’échelle du marché unique, dont notamment le développement de l’offre de fonds de dette privée.

Marché en croissance Dans le contexte de relance économique post-Covid, ALFI 2021

l’intérêt pour les fonds de dette privée s’accroit plus encore. « Un marché, s’inspirant notamment du modèle US, s’est créé et constitue un nouveau levier de croissance pour l’industrie des fonds, poursuit Nicolas Bouveret.

Du côté des investisseurs, essentiellement institutionnels, les fonds de dette privée ­permettent d’accéder à des rendements adaptés à leurs besoins, que les produits traditionnels ne parviennent plus nécessairement à offrir. » Au cœur de la crise, le marché s’est montré plutôt résilient, et ce notamment grâce à la large diversité de stratégies qu’offrent aujourd’hui les gestionnaires, des stratégies de crédit senior ou direct lending à la dette mezzanine en passant par le marché secondaire, l’octroi de crédits liés à l’immobilier 8

Photo

Romain Gamba (Maison Moderne)

Brand Voice

ou aux projets d’infrastructure, etc. « En fonction des besoins du marché et de l’appétit des investisseurs, diverses approches peuvent être mises en place. Si, l’année dernière, les acteurs ont pu mobiliser des fonds pour venir au secours de l’économie, désormais, il s’agit davantage de soutenir la relance en adoptant des stratégies adaptées », poursuit Nicolas Bouveret.

Enjeux pour les gestionnaires et les investisseurs « Beaucoup de gestionnaires de fonds de dette privée sont aussi présents dans d’autres classes d’actifs, principalement le private equity, et peuvent trouver dans la dette privée des stratégies d’investissement complémentaires, explique Nicolas Bouveret. L’intérêt, pour les investisseurs – principalement les fonds de pension et les assureurs – qui s’intéressent à cette classe d’actifs, réside dans la possibilité d’investir dans un large choix de stratégies adaptées à leurs besoins.

Arendt accompagne le développement de cette classe d’actifs depuis le Luxembourg, contribuant Pour Nicolas Bouveret et Vincent Mahler, partners au sein d’Arendt, les fonds de dette privée constituent une réponse aux besoins de financement des petites et moyennes entreprises.

au renforcement de la maturité des acteurs. « De nombreux enjeux réglementaires et fiscaux doivent être considérés lors de la structuration d’un fond de dette privée, commente Vincent Mahler, Partner, Tax Law au sein d’Arendt & Medernach.

Sous l’angle des gestionnaires d’actifs mais aussi des investisseurs, notre rôle est de les accompagner dans le choix et la mise en place de la structure la plus adaptée pour concilier l’ensemble des contraintes commerciales, juridiques et réglementaires tout en gardant à l’esprit qu’une structure fiscalement efficiente (c.-à-d. limitant autant que possible les frottements fiscaux entre les actifs et les investisseurs) est légitimement attendue par ces derniers dans une logique de réduction des situations de double ­imposition économique. » Dans cette perspective, rappellent les associés d’Arendt & Medernach, le cadre réglementaire et fiscal européen n’est pas encore entièrement harmonisé en la matière. « Lever certaines barrières devrait contribuer à l’émergence d’un marché essentiel pour financer la relance économique », conclut Vincent Mahler.

9

CROISSANCE SOUTENUE $1,46 trillion 1 Selon le fournisseur de données financières Preqin, la classe d’actifs de dette privée pourrait représenter 1,46 trillion de dollars d’actifs en 2025. En 2021, elle représenterait 945 milliards de dollars. Cela correspond à une croissance attendue de 73 %. +380 % 1 Le volume d’actifs sous gestion dans des fonds de dette privée en Europe a connu une croissance de 380 % au cours des 10 dernières années.

20 % 1 Si l’on considère l’ensemble de la classe alternative, la dette privée représente 20 % du volume d’actifs sous gestion.

39 % 2 Leader du conseil juridique dédié aux structures de dette privée au Luxembourg, Arendt représente 39 % de parts de marché (par nombre de fonds et sous-fonds).

Sources 1. Preqin, 2. Monterey Report 2020

ations

nform

’i Plus d

sur

/ t.com arend b eDe t Privat

Pour Corinne Lamesch, la finance durable et responsable est désormais une réalité incontournable.

ALFI 2021

10

Présidente de l’ALFI reconduite pour un deuxième mandat, Corinne Lamesch évoque avec nous l’évolution de l’industrie des fonds au Luxembourg et les enjeux qui attendent ses acteurs.

Interview

Photo

Romain Gamba

« La transition vers le durable, une opportunité extraordinaire » Après avoir traversé une crise inédite, dans une perspective de reprise économique, comment percevez-vous le rôle des fonds d’investissement ?

Un an et demi après la crise, l’activité des fonds d’investissement s’est maintenue. Nous avons connu une forte instabilité au début de la pandémie, avec un recul de 11 % du volume d’actifs sous gestion au Luxembourg. Puis les marchés se sont rapidement redressés. Au terme du premier semestre 2021, nous enregistrions 5,488 milliards d’actifs sous gestion au Luxembourg (pour 4,718 milliards au 31 décembre 2019, trois mois avant la crise). Ce résultat s’explique par la bonne performance des marchés, mais pas uniquement.

Entre janvier et juin de cette année, nous avons enregistré 171 milliards de souscriptions nettes dans des véhicules luxembourgeois. Si les OPCVM (organismes de placement collectif en valeurs mobilières) constituent toujours le socle le plus important d’actifs de la classe, on constate un

attrait très important pour les produits alternatifs. Et la part la plus importante de la collecte concerne des produits durables.

Comment expliquer que l’industrie résiste si bien, alors que l’avenir de l’économie reste incertain ?

Tout au long de ces mois, nous avons pu continuer à travailler sans interruption. Le télé­travail a bien fonctionné. En ce qui concerne le Luxembourg, on peut se féliciter d’avoir une Place très diversifiée, tant au niveau des actifs gérés que de l’origine des promoteurs. Il ne faut pas négliger le rôle des aides mises en place par les banques centrales pour soutenir l’économie, qui ont eu pour effet de garantir la confiance des investisseurs et de ne pas perturber les marchés. Nous n’avons pas assisté à des retraits massifs comme ce fut le cas lors de crises précédentes, dont la cause était le système financier lui-même. Enfin, la crise a conduit à une 11

Pour notre métier, cela représente de nombreuses opportunités.

Lesquelles ?

La crise nous a confortés dans les ambitions que nous avions fixées avant le premier confinement.

Celles-ci tiennent compte des évolutions de notre société et des grandes thématiques que nous voyons se développer, autour du développement durable, du vieillissement de la population. À ce titre, l’industrie des fonds se positionne comme un catalyseur du changement au service du monde de demain. Ces enjeux sont portés par les fonds alternatifs et durables. Les OPCVM demeurent un élément central de notre développement, grâce à notre capacité à distribuer ces produits dans plus de 70 pays. On constate aussi une demande croissante émanant des pays émergents, auprès desquels d’importants efforts de promotion ont été engagés, pour ces produits très répandus et bénéficiant d’une confiance forte.

CORINNE LAMESCH Présidente, ALFI

« Il nous faut investir dans l’innovation et dans la digitalisation de nos métiers. »

L’épargne-retraite et les enjeux de prévoyance constituent un autre enjeu sociétal européen…

Nous entendons accompagner le développement de produits d’épargne et de retraite (PEPP), tels que définis par l’Union européenne, dans une dynamique de prévoyance. Au regard de l’évolution démographique, la population devra de plus en plus cotiser elle-même pour subvenir à ses besoins financiers futurs, le premier pilier de l’assurance-retraite n’étant plus capable d’y contribuer suffisamment. Luxembourg, avec son expertise, a la possibilité de devenir un centre important d’administration et de distribution de ce produit paneuropéen. C’est à nos yeux un bon outil, capable de collecter l’épargne individuelle et de la mettre au service de l’économie.

Au-delà de cet enjeu, il nous faut aussi investir dans l’innovation et dans la digitalisation de nos métiers. Les nouvelles technologies, comme l’intelligence artificielle ou le registre distribué, conduisant à la tokénisation des actifs, sont de nature à profondément changer le métier. Dans le domaine des cryptos, s’il reste des incertitudes liées à la réglementation, le Luxembourg doit ambitionner de se positionner en pionnier.

augmentation importante de l’épargne. Des investisseurs particuliers disposant d’un capital disponible cherchent à placer leurs actifs, à les faire fructifier.

Quels sont les principaux enjeux pour l’industrie des fonds dans le cadre de cette relance ?

Le secteur financier est le principal contributeur à l’économie du pays. Rappelons que Luxembourg est la douzième place financière la plus importante au monde, et la troisième en Europe. Luxembourg est le premier centre de fonds d’investissement en Europe. La finance emploie localement 50.000 personnes, dont 5.000 rien que pour l’activité liée aux fonds, et elle rapporte annuellement jusqu’à 4 milliards d’euros d’impôts à l’État. Cette contribution, en considérant la croissance que connaît le secteur, doit permettre au pays d’organiser une relance économique plus efficiente.

Plus largement, le métier de la gestion collective doit faciliter l’injection de capitaux détenus par des privés dans l’économie, pour soutenir la relance. À ce titre, l’Union européenne a reconnu l’importance de notre secteur pour financer l’économie, créer des emplois.

ALFI 2021

12

À l’heure où une transition écologique et solidaire doit s’opérer, quel sera le rôle des fonds d’investissement ?

La finance durable et responsable est désormais une réalité incontournable et une des réponses aux grands défis à relever. La volonté de la Commission européenne, aujourd’hui, est de mobiliser les actifs et d’orienter les investissements vers des entreprises et des activités durables. De nombreux chantiers réglementaires vont dans ce sens. Cela a commencé avec le règlement sur la publication d’informations en matière de durabilité dans le secteur des services financiers (SFDR), applicable depuis le 10 mars dernier, et qui doit conduire à davantage de transparence. Il concerne tous les produits, durables ou non. Si bien qu’aucun gestionnaire ne peut ignorer le sujet. La taxonomie, par ailleurs, va permettre de définir clairement ce qui relève d’une activité durable.

Un changement gigantesque s’opère pour amener l’industrie sur cette voie. Le changement s’accélère et va considérablement occuper les acteurs dans les cinq prochaines années. Chacun va devoir s’adapter aux nouvelles exigences en la matière.

adaptation difficile, complexe, coûteuse, c’est aussi une opportunité extraordinaire.

Comment le Luxembourg, en matière de finance durable, peut-il faire mieux encore ?

Un des grands enjeux réside dans le développement des compétences et des systèmes. Il est nécessaire de faire évoluer l’expertise existante pour répondre aux nouveaux défis. Pour préserver notre compétitivité, il est aussi important de rester agile dans la mise en œuvre des réglementations, en allant vite et en tirant avantage de ce que propose l’Union européenne. Il faut enrichir l’écosystème, faciliter les échanges, notamment à travers les 11 groupes de travail de l’ALFI qui se penchent sur la finance durable. Nous devons aussi travailler à une bonne collaboration entre le public et le privé, avec le gouvernement, le superviseur, la Bourse, la Luxembourg S ­ ustainable Finance Initiative, InFiNe, Luxflag…

Dans un environnement post-crise, et surtout post-Brexit, comment a évolué le jeu de la concurrence entre les Places européennes ?

Suite au Brexit, la concurrence s’est sensiblement renforcée. L’Irlande, les Pays-Bas, l’Allemagne ou encore la France révèlent de fortes ambitions. Évoluant sur un marché international, le Luxembourg navigue dans cet environnement concurrentiel. Cela ne nous fait pas peur, au contraire.

La concurrence nous oblige à rester vigilants et innovants, à adapter sans cesse notre cadre réglementaire et fiscal afin de rester compétitifs. Dans cette perspective, l’ALFI continue à travailler pour adapter les outils existants en permanence et offrir le panel de solutions le plus complet possible. Nous avons de bons acquis, construits au cours des 40 dernières années, nous pouvons être confiants pour l’avenir.

D’autres défis nous attendent en outre, notamment celui relatif à la pression sur les coûts. Si notre industrie se porte bien, la diminution des marges des acteurs, en raison, notamment, de l’évolution réglementaire, devrait aussi entraîner des mouvements de consolidation dans le futur. Ce sont des enjeux qu’il faudra aussi bien appréhender.

Que représentent les fonds durables aujourd’hui ?

Une étude récente que nous avons menée révèle que, dans l’Union européenne, au 31 décembre 2020, 11 % des actifs étaient gérés au départ de fonds durables, selon la définition qu’en fait ­Morningstar.

En 2020, plus de la moitié (52 %) des souscriptions nettes dans l’Union européenne ont été faites dans ces produits. Cela signifie que c’est un segment qui connaît une croissance plus importante que les autres. Luxembourg est leader européen sur les fonds durables, avec 371 milliards d’actifs gérés depuis des véhicules intégrant les enjeux ESG. C’est bien, mais nous ne sommes pas les seuls en Europe à être bien positionnés là-dessus. Les PaysBas, les pays scandinaves et la Suisse sont aussi très avancés, avec des gestionnaires ayant un appétit important pour les fonds durables. Le Luxembourg a enregistré 44 % des souscriptions nettes dans des fonds durables en Europe. Selon une autre étude, menée par PwC, 77 % des investisseurs institutionnels affirment qu’en 2022, ils ne considéreront que des fonds ESG. Si l’engagement des acteurs dans les fonds durables constitue une ALFI 2021

Auteur S. L.

14

Carte blanche

230

+23%

+40

190

150

Number of sales

ALFI 2021

Index (2017=100)

270

JORGE AGUILÓ Partner and country head Compass Group USA

Values of sales

16

Source

ONLINE SALES INCREASING AT A FAST RATE 1h20 1h21

Compass Group USA

Mexican regions are expected to continue for the foreseeable future.

In addition, Brazil has been experiencing a wave of IPOs, with 74 new companies being offered since 2019. This has resulted in the listing of several companies that represent secular themes in the region such as windmills’ spades – a key asset for the expansion of renewable energy to combat global warming. This growing trend towards new responsible investments, together with the pandemic, has accelerated many ongoing processes and has greatly benefited the adoption of new consumer habits, namely that of e-commerce.

As such, newly listed logistics companies and IT services seem greatly positioned to take advantage of the described developments.

At Compass, we have an advantage point in selecting the best investments and delivering results due to our 25 years of experience and extensive regional presence in the six major countries in LatAm. Our proximity to companies gives us an edge as we construct long-term symbiotic relationships with the diverse management teams and boards. We are highly committed to ESG values and practices across our investment processes and strive to become a reference for global investors who wish to take advantage of what the region has to offer.

Photo

The post-pandemic global economy has seen two major winners from Latin America’s perspective: the United States and the technology sector. Both Mexico, due to its proximity to the US, and Brazil, in terms of its IPOs (Initial Public Offerings) opportunities as a result of its big domestic market, have created interesting investable cases.

The global economic acceleration, high demand for commodities, the US infrastructure plans, and local stimulus packages have all benefited LatAm. The combination of factors has been especially advantageous for Mexico due to its proximity to the US and existing free trade agreements. The northern regions and central valley, which have a privileged geographical location and extensive connectivity to the US, are best positioned to gain from the recovery, and their manufacturing and banking sectors already evidence the ongoing process. Latin America offers a compelling investment case, and we estimate that the recent growth trends seen in the northern and northern-central

MCC-ENET

Latin America’s natural traditional advantages and new consumer trends

Carte blanche

ALFI 2021

18

Photo

I was born in 1978, the year the last iron mine players in the asset management industry are in Luxembourg was about to close. My great-­ already active in Europe’s largest fund domicile! grandfather had worked and died here because But every year, we see more asset managers the mine collapsed. The local steel industry, from all over the world launching their first fund which at the time employed some 25,000 ­workers, in Luxembourg. Furthermore, new service proincluding my grandfather, was still the backbone viders keep entering this dynamic market. Why? of Luxembourg’s economy, even though it had Luxembourg has been able to transform itself just been hit by a crash in steel production. My during the last century from one of the largest father had just started working for the Luxem- steel producers to one of the largest fund jurisdictions in the world because it kept reinvenbourg state bank, a sector that had experienced some recent growth. However, we were still ten ting itself, never resting on its laurels, knowing years away from the implementation of the first how important innovation would be for the future of the country.

UCITS directive into local law from where the Leading by example, the fund industry has investment fund industry emerged and which further enhanced its fund toolbox over the past propelled the Grand Duchy’s fund centre onto the world stage with now more than €5 trillion few years to ensure tailored solutions are available in assets under management. for an international client base. Fund service Today, our country’s fund industry is reco- ­providers have developed sophisticated outsourgnised globally for its expertise and sophistica- cing solutions that make it easy for managers to launch and run their fund from Luxembourg. tion servicing a wide range of asset management clients from around the world. Out of the top 100 Looking back at my ancestors in the iron mining asset managers worldwide, 98 have chosen and steel industries, I am rather proud of Luxembourg as the domicile of their what Luxembourg has become. This international fund ranges, and reminds me of Luxembourg’s the base from which they national motto, from a poem ­distribute into 77 countries. written by Michel Lentz in 19 out of the top 20 global 1859: “We want to remain private equity houses do what we are.” We want to STEVE BERNAT Founding Partner business from Luxembourg remain innovative, forward ONE group solutions and the world’s 20 largest thinking with a can-do attireal estate managers have tude, and Europe’s number “We want operations here, resulting one fund centre! to remain innovative, in Luxembourg-based reguforward thinking lated alternative fund assets of close to €1 trillion. with a can-do Given those numbers, one attitude.” would think that most Author STEVE BERNAT

ONE group solutions

Luxembourg, your domicile of choice

Carte blanche

Appealing a generation reared on smartphones and choice

Photo

Marion Dessard (archives)

Remember when you used to go to a travel agent to plan your holiday? Today, we get to choose, and many of us enjoy the process. We book our own flights, stay in strangers’ houses, and scroll through endless reviews to find that perfect restaurant.

Thank you, Internet. It turns out that we love distribution channels that put the decision-­making power firmly in our hands. Millennials are taking this one step further. Not just a generation of DIY (do it yourself) travellers: the “you choose” formula applies to their finances too. Who needs an adviser or banker when a smartphone and brainpower will do? The number of investors building their own portfolios online is exploding.

The giant of digital brokers, Robinhood, has now amassed 13m users with 80bn in assets under management.

If the platform were the match, then Covid lit the flame. First-time traders in their 20s and 30s flocked to start investing as stocks fell to ­historic lows and opportunity blossomed.

and tutorials to their first real i­nvestments with small sums of money. But here, there’s a glitch.

Make it cheaper Before Millennials can try out investing with small sums of money, something drastic needs to happen to the cost of distribution. Today, the number of actors involved in the process keeps costs disproportionately high. Tomorrow, with DLT technology, the obstacles between the asset manager and consumer could be razed: if securities are tokenised. Investing can and will be incredibly cheap. Finally.

Help them make a difference While we say that experience trumps product, there is, nonetheless, an incredibly powerful product to mention: ESG funds. Building platforms that help people answer the crucial question “where will my money go?” is the next step for sus­tainable investments. Millennials want more rich and varied data to help them make decisions. Any Replicate success new distribution channel should put this up front and centre. Tapping In a world where experience beats products, and where good enough into this era of choice could bring doesn’t exist, it’s time to start new, more engaged customers building distribution platto investment funds. But this forms that make investing GEORGES BOCK will mean more than a rethink.

Founder and CEO in funds an empowering Opening new markets and Investre lowering costs will mean experience. You don’t throw ­ripping up the rulebook for learner swimmers in the pool “Rip up the rulebook fund distribution. Are you without giving them a float. for fund distribution Any new distribution chanready to help put the decision-­ and give Millennials nel worth its salt will have making power in retail ­investors’ hands? to bake education in, giving the decision-making users the ability to glide power they’re craving.” Author GEORGES BOCK ­smoothly from virtual t­ rading Les cartes blanches sont à retrouver en intégralité sur paperjam.lu.

Carte blanche

Reimagining the fund-distribution landscape

ALFI 2021

the industry started from scratch? ” 20

Author CHRIS CHANCELLOR

Photo

Making fund investment more accessible for the younger investors Technology could also attract a new generation of investors. In our current reality, funds tend to appeal to older, more financially savvy demographics. There has been anecdotal evidence over the

past year of younger investors turning to highrisk, high-reward investment strategies such as cryptocurrency, stock or FX trading. What if the asset management industry could present a more ‘exciting’ side, perhaps through the gamification of fund investing – or at least education – and partnerships with trendy brands and social media influencers (within the bounds of regulation, of course)? Making fund investment more relevant and accessible to potential investors of any age and background can only be a good thing – helping them to put their cash holdings to more lucrative use, while also benefiting the region’s economy.

Personalisation is another major opportunity presented by the chance to start afresh with today’s resources. Not so much at product level, where efficiencies of scale need to be struck (although share classes and direct indexing are some measures that can help), but in terms of sales, marketing and client service. Targeting clients only with the information most pertinent to their profiles would help make sure to cut through asset managers’ messaging, and keep invesCHRIS CHANCELLOR tors on side in this age of Senior director, Global Insights Broadridge information overload. Speed is also of the essence here – “What might we should use the opportuEuropean fund nity of a new start to ensure clients are receiving reports distribution and commentary on demand look like if rather than at a time that suits the asset manager.

Broadridge

Over the past century, Europe’s mutual funds have blossomed from a seed of an idea into an industry managing almost €13trn. A complex distribution landscape has developed in tandem, adapting to changing tastes, regulations and innovations along the way. However, ingrained practices understandably take time to evolve. If the industry were to start over again, today, what might fund distribution look like?

Underpinning a reimagination of any industry is one word in particular: technology. Fund distribution has always been a people business, but technology is facilitating faster and broader connections and interactions – a role amplified by the societal lockdowns of Covid-19.

Online platforms, robo-advisers and model portfolios would surely all make the cut in our ‘new’ industry, but a look at distribution trends in Asia Pacific could also be instructive.

Live-streaming platforms allow managers to discuss products, interact with investors and offer investment discounts, while digital-wallet providers are moving into fund distribution via tie-ups with product providers.

Carte blanche

Photo

Waystone

Waystone – bringing certainty to your distribution The Cross-Border Distribution Framework (CBDF) to pre-market and the requirement to closely track subscriptions linked to pre-marketing activis the result of discussions that began in the EU in July 2018. The intention was to create a series ity, although with careful planning these chalof measures intended to reduce regulatory barri- lenges are not insurmountable. ers and harmonise the marketing and distribution While pre-marketing changes focus on AIFs, of funds across the EU, ultimately reducing fund the ‘high level principles’ and ESMA guidelines costs for investors and enhancing the transpar- highlight convergence by immediately applying ency of local regulatory processes and fees. Whether equally to AIFs and UCITS. Remember, however, that member states can apply the guidethe legislation fully achieves its intentions will be lines in differing ways (for example, requiring determined by how each individual member state regulator pre-approval of materials, or translainterprets the directive. tions of materials for certain investor types).

Reflecting on the weeks since the CBDF came The process of building marketing communiinto effect, it is interesting to assess how its approach cations for EU-based prospects and investors has informed wider planning, even where focused solely on one principle, such as pre-marketing for is therefore likely to be in flux during the autumn AIFs (Alternative Investment Funds). It will be of until all member states have outlined how they further interest to observe how the drive to stand- will comply with the guidelines. We therefore ardise activities across fund types works in prac- expect to see ongoing refinements to communications up to February 2022 when tice, as firms adjust marketing materials and communications in the run up the ESMA guidelines come into effect. to the ESMA guidelines becoming In summary, as with previous effective on 2 February 2022. regulatory changes, we anticipate Broadly, harmonising prethere will be local regulatory marketing for AIFs is a clear divergence in the legislation’s improvement of the previous, SELMA COFFEY application, bringing nuances Head of distribution services fragmented, approach. The not previously considered on Waystone expansion of the pre-marketa country-­by-country basis. We ing definition to include esta­ “Harmonising know our asset manager partblished, but not passported, ners will be looking to practipre-marketing funds is a welcome developcally meet the new requirements for AIFs is a clear ment, allowing a test of invesas they arise, and Waystone is tor interest without incurring here to provide certainty to our improvement potentially unnecessary ongoclients and ensure they remain of the previous, ing costs. Potential challenges on the right side of distribution for asset managers and disat all times. fragmented, tributors may occur with the approach.” reduction in entities permitted Author SELMA COFFEY Les cartes blanches sont à retrouver en intégralité sur paperjam.lu.

Carte blanche

The ongoing appeal of Luxembourg

Finding the right match A high-quality service experience comes from finding the right expertise combined with the right cultural match. This balance is best a ­ chieved when an administrator has their service sites in the domicile of the client or the domicile of the fund. By contrast, an organisational structure that functionalises and outsources processes and service models to remote locations often yields a disjointed client experience.

At U.S. Bank, we’re committed to supporting Positioned to support client needs the alternative investment community U.S. Bank made the decision to come to Luxembourg because many of our through our expanding resources and existing clients in the United States presence around the world. We comand Ireland were struggling to bine administration, corporate, find a quality provider here. depositary and custody account They sought the operational services into one seamless, mulefficiency and quality that DIDIER DELVAUX tidomicile solution – consistent, Country head of Luxembourg come from using the same efficient and transparent across U.S. Bank service provider in LuxemLuxembourg, Ireland and the bourg as they use in the United “We’re committed United States.

States and Ireland. to meeting clients’ In building our business needs with local case at U.S. Bank, we identified Luxembourg as a market expertise and that’s had consistent growth global strength.” and innovation. Our ­commitAuthor DIDIER DELVAUX ALFI 2021

22

U.S. Bank Global Fund Services Luxembourg

ment to opening a new Luxembourg office is a vote of confidence in Luxembourg as a market that will continue to thrive.

While there are numerous service providers in Luxembourg, we recognised a gap in the ­market for a provider that combines both the strength of a large bank and the nimbleness and flexibility of a highly automated and customerfocused service organisation.

Photo

Luxembourg currently ranks as Europe’s largest fund domicile, so you’d think most players in the asset management industry would already have an active presence here.

But every year, we see asset managers from around the world still venturing into this m ­ arket for the first time to launch their first Luxembourg funds. And every year, new service pro­ viders enter this dynamic market to meet the needs of this growing client base.

So why are managers and service providers choosing Luxembourg over other jurisdictions?

Should they outsource to the Luxembourg ecosystem or set up their own offices? How easy or difficult is it to find staff? And how do they h ­ andle dealing with the Luxembourg regulator?

These are all questions we get asked regularly – and which we can help you address from our broad experience.

Carte blanche

Governance in data management

Photo

Fundsquare

The efficient management of data should be of utmost importance for any actor in the financial industry. The origination, storage, transmission, and use need to be monitored as any other asset.

Within a continually evolving regulatory landscape, the need for flexible and performant tools supporting data management takes centre stage.

Digitalisation has led to an exponential increase in data. With institutions required to process more and more data, the need for aggregated data respecting compliance rules, but also m ­ aking sure that distribution networks and platforms are disclosing the right information at the right time to the right places, is imperative.

just for the increasing focus of regulatory authorities weighing in on this, industry players feel the definite need to control content and data throughout the value chain.

It is essential to work on bringing aggregated, up-to-date data to asset managers and management companies to support their overall fund distribution process. In line with the ever-­changing regulatory environment and fully aware of ­clients’ preoccupations, financial service providers must keep an open mind and ear.

Flexibility and customisation Clients want to maintain control over their data and how it is being managed. This requires a A different challenge for each individual ­certain level of flexibility and, in our company, is We recognise that data management challenges optimised via tailor-made IT development to are not the same for everyone. Specialised asset ­follow each step of the data processing journey. managers tend to use in-house resources to man- Customisation is key in respecting the needs of every client and provides the ideal foundaage their data and have often not developed tion to cope with these current and the infrastructure that general (and future challenges. Proper governoften larger) asset managers have.

This said, the larger the netance in efficient data management work, the more difficult it is for not only reduces costs, but also a fund manager or management mitigates risk on many levels.

We are a fintech with a sercompany to source and follow MATTIAS DE MOL up on the data. Multiple domvice. Our technology is scalable Head of client service delivery Fundsquare iciles, different regulatory and flexible. As specialists, we authorities per locality, and have the necessary teams and “Data is a key working with various thirdinfrastructure to accompany asset that party service providers render our clients in their projects and the process more intricate. allow them to efficiently man­ requires proper Likewise, the trend towards age and control their data. management to the standardisation of marketing and sales materials for take advantage fund distribution is strongly of its full worth.” felt within the industry. If not Author MATTIAS DE MOL Les cartes blanches sont à retrouver en intégralité sur paperjam.lu.

Carte blanche

Digitalisation: transforming the face of fund distribution

Client interaction The interactions with investors are becoming increa­ singly digital – and even more so due to the CovidWhat now?

19 pandemic. What’s more, robo-advisors are continuing to gain traction in Europe with an esti­ So, what does the absence of a big bang tell us?

First off, the grip that intermediaries have on mated €14bn AUM (assets under management).

Overall, fund distributors have improved their retail investors – and will continue to have. ­Further digital offering towards investors with more user-­ digitalisation of investor interaction will mostly depend on intermediaries. There’s no friendly interfaces. Hardly surprising given the new generation of clients who doubt that a new operational model demand a fully digital service. Young is required to remain relevant in high net worth individuals sit a this new world. Asset managers world apart from their parents, can lead this transformation by either developing more who talked investments from direct channels or working the comfort of a Chesterfield SAID FIHRI at a private banker’s office. more closely with their distri­ Partner, head of fund distribution services KPMG Luxembourg Some asset managers believe bution network. What we in more direct channels and know is that staying passive “Consolidating data have turned towards the in such a fast-evolving envi­ in operations direct-to-consumer model – ronment could prove to be very dangerous. a strategy that may pay off in has become key to the future if inducements are improving efficiency.” Author SAID FIHRI fully banned.

ALFI 2021

24

KPMG

Managing operations As distribution networks become more digita­ lised, asset managers must develop strategies that fit into this new world. Using blockchain in fund distribution (as at FundsDLT) shows that a new operational model already exists.

Beyond the technology itself, an ecosystem where various systems can seamlessly exchange data has been created.

Consolidating data in operations has become key to improving efficiency. KPMG offers an online dashboard where asset managers can visualise their fund distribution processes in one place. Accessible through the KPMG Digital Gateway, it allows clients to manage their data for risk, tax, governance, and strategy purposes.

Photo

Over the last few years, many predicted a techno­ logical revolution that would disrupt the way fund shares are sold in Europe. The rise of various tech­ nologies (e.g., blockchain and AI) was seen as the beginning of a new era in the asset management industry. This “big bang”, however, has not hap­ pened. The industry is going through significant transformation, and ignoring that fact is a risky game to play. Every so often, we see fresh digital solutions from established asset managers as well as new entrants. A steady increase in these types of solutions means that exponential acceleration will soon leave non-proactive players in the dust.

INVESTMENT FUNDS

BECOME AN EXPERT More than 100 training modules 10 professional profiles 15 certified paths in asset management and investment funds

Our training offer includes courses and certified paths: Sustainable Finance Real Estate, Private Equity & Hedge Funds Risk Management Compliance Officer Fund Accountant Register & Transfer Agent Depository Bank Fund Legal

Face-to-face or distance learning

Developing knowledge and competence in association with ALFI and the fund industry’s leading specialists

Information and registration on www.houseoftraining.lu

Comment renforcer la compétitivité des fonds en Europe ? Échange de vues autour de sujets-clés, entre intégration du marché européen, finance durable, épargne à long terme et distribution…

Interview croisée

« Pour rester compétitive, l’Union européenne doit renforcer son marché » CLAUDE KREMER Associé fondateur d’Arendt & Medernach Ancien président de l’ALFI et de l’EFAMA

ALFI 2021

TANGUY VAN DE WERVE Directeur général de l’EFAMA

Romain Gamba et EFAMA Photos

Pouvez-vous nous rappeler les missions et les rôles de l’ALFI et de l’ European Fund and Asset Management Association (EFAMA) en tant qu’associations représentatives de l’industrie des fonds ?

TANGUY VAN DE WERVE (T. V. D. W.) L’ EFAMA repré­ sente les intérêts de l’industrie européenne de la gestion d’actifs auprès des décideurs européens et internationaux. Notre association comprend 28 associations nationales, parmi lesquelles se trouve l’ALFI pour le Luxembourg, et 59 grands gestionnaires d’actifs. Nous agissons notamment avec la volonté d’aider la Commission européenne à atteindre ses objectifs, comme la création d’une Union des marchés des capitaux, le dévelop­ pement d’une finance durable, etc. Nous parta­ geons en ce sens une communauté d’intérêts avec le législateur européen, qui envisage la gestion ­d’actifs comme levier de financement pour r­ elever certains grands défis sociétaux.

CLAUDE KREMER (C. K.) L’ EFAMA est le porte-­ parole reconnu de l’industrie de la gestion c­ ollective au niveau européen. Elle permet à tous les acteurs de parler d’une seule voix aux autorités. Toute la beauté de cette association, que j’ai eu l’honneur de présider, réside dans sa capacité à faire émer­ ger des compromis dans l’intérêt de tous. L’ALFI a pour mission de faire valoir l’intérêt des acteurs luxembourgeois de l’industrie des fonds auprès des autorités nationales ou, en contribuant aux travaux de l’ EFAMA, au niveau européen. L’ALFI joue aussi le rôle d’ambassadeur de notre indus­ trie à l’étranger, permettant de présenter le Luxem­ bourg de manière unie.

à une concurrence accrue entre les acteurs euro­ péens, qui pèse aussi sur les marges et qui conduira inévitablement à des opérations de consolidation.

Enfin, il faut prendre en considération les attentes d’un nouveau type d’investisseurs issus de la génération des Millennials, nés avec la techno­ logie, qui la comprennent et savent l’exploiter.

En ce qui concerne l’industrie des fonds, comment maintenir la compétitivité européenne face au reste du monde ?

C. K. Il faut d’abord poser le cadre. Nous é ­ voluons dans un environnement où les taux d’intérêt sont bas, voire négatifs. Cela conduit les investisseurs et les acteurs, à la recherche de rendement, à s’orienter vers des produits moins liquides, recher­ chant la performance. Ensuite, il faut considérer la pression réglementaire accrue, en faveur d’une grande transparence et d’une protection des investisseurs. Cette réglementation, établie à rai­ son, a toutefois un impact important sur les coûts et, dès lors, la compétitivité. On assiste ­également

Considérant que le Luxembourg a construit son écosystème autour d’une expertise transfrontalière, une plus grande intégration n’est-elle pas de nature à lui faire perdre un avantage compétitif ?

C. K. Le risque de voir l’attractivité du Luxem­ bourg se diluer est toujours là. Un pays comme le Luxembourg n’est grand que parce qu’il est dans l’Union européenne. Toutefois, on peut être confiant sur la capacité du Luxembourg à conti­ nuer à attirer des acteurs dans un marché plus intégré, et ce dans la mesure où l’expertise s’y consolide depuis plusieurs décennies. La boîte à outils est complète et l’écosystème fonctionne 27

Au niveau de l’EFAMA, considérant cette concurrence accrue entre acteurs européens, comment parvenez-vous à parler d’une seule voix ?

T. V. D. W. Au-delà de la concurrence, nous pen­ sons qu’il faut se concentrer sur ce qui nous ras­ semble, à savoir la volonté de faire progresser la gestion d’actifs en Europe et d’améliorer son cadre réglementaire. C’est cette volonté qui nous per­ met de fédérer nos membres et de dégager des positions communes. Cela n’est pas toujours simple dans un contexte de concurrence accrue entre places financières, de désaffection pour le projet européen et de repli sur soi. Mais nous y arrivons.

Pour une association comme la nôtre, la pire situa­ tion est d’être réduite au silence faute de pouvoir dégager un compromis sur une question-clé.

C. K. Si on le compare à celui des États-Unis, avec des fonds en moyenne dix fois plus grands qu’en Europe, le marché européen est très frag­ menté. Actuellement, nous devons composer avec plus de fonds de moindre envergure, ce qui induit une perte d’efficacité. En matière de distribution, cette fragmentation nuit aussi à l’efficience. Il y a une grande opportunité à amé­ liorer l’intégration du marché européen.

bien. La Place dispose de nombreux atouts, d’un temps d’avance sur beaucoup d’autres Places.

La clé résiderait donc dans une meilleure intégration du marché européen ?

T. V. D. W. Oui, la compétitivité de l’Union européenne passe par une meilleure intégration et un approfondissement du marché unique, qui est son principal atout. Elle suppose aussi plus de convergence en matière de supervision, ainsi que le développement de normes adaptées et d’un environnement favorisant l’innovation. Le succès international des UCITS est la preuve de notre capacité à développer de telles normes et à les exporter. Dans un monde globalisé, notre compétitivité dépend en effet aussi de notre capacité à être rule maker, et non rule taker.

On voit souvent la réglementation comme une contrainte. Faut-il aussi la considérer comme une opportunité ?

C. K. La réglementation est nécessaire et de nature à fixer le cadre d’un marché. Le Luxembourg est parvenu, à plusieurs reprises, à tirer avantage de nouveaux cadres définis par le législateur. En matière de compétitivité, il est toutefois important d’éviter la surréglementation. Il importe que les exigences mises en place soient utiles et efficientes. Or, nous sommes parfois confrontés à des contraintes qui ne permettent pas d’atteindre l’objectif poursuivi par le législateur.

CLAUDE KREMER Associé fondateur d’Arendt & Medernach Ancien président de l’ALFI et de l’EFAMA

« L’enjeu est de convertir les épargnants en investisseurs. » ALFI 2021

28

T. V. D. W. En matière de réglementation, j’évite de parler uniquement en termes de coûts. Je pense qu’il convient plutôt de considérer le rapport coût/bénéfice. Une réglementation, si elle peut être source de contraintes pour le fournisseur de services financiers, a généralement pour objectif de protéger le consommateur ou de rendre le système plus intégré, plus résilient ou plus durable, ce qui contribue in fine au développement du marché et profite à ses acteurs.

Encore faut-il, bien entendu, que ces objectifs soient atteints et que les exigences réglementaires soient correctement calibrées. C’est notre rôle d’alerter les autorités si cela risque de ne pas être le cas. Et d’éviter l’usine à gaz.

C. K. Comme l’a évoqué Tanguy, on peut saluer l’ambition européenne en matière de finance durable. Ces produits, à n’en pas douter, vont devenir mainstream. À travers ce développement, on voit tous les bienfaits d’une réglementation européenne, qui répond à un enjeu de transition, contribue à un monde meilleur, tout en créant un nouveau marché, plus vertueux.

Quels autres enjeux percevez-vous en matière de compétitivité ?

T. V. D. W. On ne peut pas ignorer la sortie du Royaume-Uni de l’Union européenne, qui lui a permis de retrouver toute son agilité, avec une capacité à réagir plus rapidement aux évolutions du marché. Il est à espérer que cette nouvelle réalité encouragera la Commission européenne et l’ESMA à tenir davantage compte de l’impact de la réglementation de l’Union sur la compétitivité de son industrie financière.

C. K. Avec l’isolement du Royaume-Uni, le Luxembourg a perdu un allié de poids à la table des discussions européennes, où la concurrence entre États membres, avec des politiques orientées vers les marchés domestiques, peut conduire à certaines positions peu favorables.

T. V. D. W. Il faut garder en tête que les marchés sont globaux et la compétition planétaire. Pour mobiliser l’épargne et financer l’innovation nécessaire à sa transition énergétique et digitale, il est important que l’Union européenne dispose d’un marché intégré et d’une industrie financière dynamique et concurrentielle. Tout en restant ouverte sur le monde et en évitant le repli sur soi.

à long terme. Il faut aussi s’engager en faveur d’une meilleure éducation financière. Beaucoup ont peur des marchés, parce qu’ils ne les comprennent pas. Il faut, dès l’école, enseigner les enjeux de l’épargne, les mécanismes disponibles, pour ­permettre à chacun de mieux veiller à subvenir à ses besoins financiers tout au long de sa vie. Il est aussi intéressant de noter que les enjeux d’investissement à long terme s’accommodent bien avec ceux inhérents à la finance durable.

TANGUY VAN DE WERVE Directeur général de l’EFAMA

« L a (non-)gestion des pensions est un problème majeur. » Quels sont les enjeux en matière d’épargne longue pour l’Europe, indispensable pour financer les retraites ?

C. K. Il faut reconnaître l’échec du premier pilier, autrement dit du financement des retraites par le secteur public. Le deuxième pilier, qui dépend de l’employeur, commence à se développer.

L’épargne-pension personnelle, en Europe, n’est qu’au tout début de son évolution. Considérant cela, il est important d’inviter chacun à faire preuve de prévoyance, pour subvenir à ses besoins au terme de sa carrière professionnelle. Dans cette perspective, l’objectif est de convertir les épargnants en investisseurs.

T. V. D. W. Si on regarde le patrimoine financier des Européens, un peu moins de 40 % est en dépôt bancaire alors même que les taux sont proches de zéro et qu’il y a de l’inflation. Les déposants perdent donc du pouvoir d’achat. La gestion collective doit permettre de mobiliser ce cash, de le mettre au service de l’économie, tout en générant du rendement et une meilleure sécurité financière pour les citoyens. La (non-)gestion des pensions est un problème majeur, insuffisamment pris en compte par l’UE. À l’initiative de l’EFAMA et de plusieurs autres associations, une European Retirement Week sera dorénavant organisée chaque année, fin novembre, afin de mobiliser les décideurs et les médias autour de ces enjeux.

C. K. L’Union européenne se dote de produits adaptés, comme le Pan-European Personal Pension Product (PEPP), devant encourager l’épargne ALFI 2021

30

La conférence ALFI de septembre est orientée vers les enjeux de distribution.

Quels sont-ils, à vos yeux ?

C. K. Jusqu’à présent, l’essentiel de la distribution de fonds mise en place par des gestionnaires passe par des réseaux d’intermédiaires. Si bien que les promoteurs des véhicules ne connaissent généralement pas leurs clients. Contrairement aux GAFA qui, à l’ère numérique, appuient leurs modèles économiques sur une connaissance fine des utilisateurs. Considérant les nouvelles attentes des investisseurs, la distribution des produits financiers doit évoluer. À l’EFAMA, en 2011-2013, j’affirmais déjà que les fonds ne se vendent pas, mais s’achètent.

Et qu’à partir de là, il était essentiel de placer l’investisseur, ses attentes, ses besoins, ses préoccupations, au centre de l’attention. Les gestionnaires de fonds doivent apprendre à connaître leurs clients, utiliser la technologie disponible, que ce soit l’intelligence artificielle ou la blockchain, pour se rapprocher des investisseurs afin de pouvoir mieux les servir, avec un haut niveau de personnalisation.

T. V. D. W. Les attentes des clients ont changé, notamment en raison de la digitalisation. Pour mieux servir la clientèle, lui proposer les produits les plus adaptés à ses besoins, il faut pouvoir s’approprier la donnée disponible, se doter de capacités d’analyse et envisager la fourniture de nouveaux services au départ de plateformes numériques.

L’expérience utilisateur devient un enjeu majeur et est au cœur des réflexions stratégiques des distributeurs, dont certains vont devoir se réinventer au risque de devenir désuets. Face à ces évolutions, le rôle de l’EFAMA est aussi de sensibiliser les autorités à la nécessité d’adapter le cadre réglementaire à la nouvelle donne digitale.

Auteur S. L.

Corporate | Funds | Capital Markets | Private Client

Promoting and protecting investment worldwide Ocorian is a global leader in corporate and fiduciary services, fund administration and capital markets.

Our global network delivers customised, scalable solutions providing the support our clients need: how and where they need it.

• • •

Expert teams Trusted partner with flexible solutions Committed to your success

For more information on our services go to www.ocorian.com Bermuda | BVI | Cayman Islands | Guernsey | Hong Kong | Ireland | Isle of Man | Jersey | Luxembourg | Mauritius | Netherlands | Singapore | UAE | UK | USA Information about our regulators is available online

Brand Voice

L’investisseur en quête de confiance Dans un monde en pleine mutation, les gestionnaires d’actifs sont à la recherche de partenaires de confiance, à même de rassurer les investisseurs et de leur permettre de profiter des opportunités actuelles.

Industrie des fonds

Contenu sponsorisé par Société Générale Securities Services

ALFI

32

Brand Voice

Photo

Matic Zorman (Maison Moderne)

L’industrie des fonds n’a pas tardé à retrouver son rythme suite à la crise du Covid et, désormais, les opportunités sont nombreuses pour les investisseurs. « Un fonds investit sur les moyen et long termes, explique Guillaume Roch, directeur commercial, marketing et solutions chez Société Générale Securities Services (SGSS) à Luxembourg. Si la crise sanitaire a perturbé dans un premier temps les marchés actions, elle a également généré des opportunités pour les ­investisseurs et renforcé la conscience de ces derniers envers la finance durable. » Un outil clé en main pour les gestionnaires d’actifs Dans ce contexte, la Place luxembourgeoise reste incontournable. SGSS y est l’une des banques les plus importantes, servant ses clients internationaux : institutionnels, fonds d’investissement, autres banques et grandes entreprises. « Notre gamme de produits est très large, avec des services classiques dédiés aux fonds UCITS et aux fonds alternatifs, mais aussi avec un service d’émission de titres listés, ainsi qu’un produit front-to-back appelé CrossWise. Celui-ci réunit nos services de négociation, de gestion front, middle et back-office en un seul outil clé en main qui permet à nos clients de se concentrer sur leur cœur de métier : les décisions d’investissement », précise Guillaume Roch.

EN CHIFFRES

5.500

Le Luxembourg détient plus de 5.500 milliards d’€ d’actifs sous gestion (source : cssf.lu).

2e

Le plaçant comme 2e domicile mondial pour les fonds d’investissement après les États-Unis (source : efama.lu).

17

17 indicateurs recensés par les Nations-Unies en termes de développement durable.

La recherche d’une efficacité opérationnelle optimale et les contraintes réglementaires croissantes incitent en effet de plus en plus de gestionnaires d’actifs et d’investisseurs institutionnels à externaliser tout ou partie de leur chaîne opérationnelle front-to-back.

Un environnement en mutation L’expertise proposée au ­travers de cette offre est importante alors que le ­secteur est en pleine transformation, notamment avec la généralisation des critères de développement durable (ESG). « Intégrer et mesurer les 17 indicateurs de développement durable définis par les Nations Unies reste un véritable challenge, rappelle Guillaume Roch. Notre outil CrossWise permet aux gestionnaires de portefeuilles non seulement de vérifier le respect de la politique d’investissement de leurs fonds, 33

mais aussi de simuler l’impact ESG de toute décision de ­gestion, y compris lorsque la réglementation l’impose. » Plutôt que de faire appel à plusieurs prestataires pour externaliser chacun des maillons de leur chaîne opérationnelle – ce qui peut rapidement devenir complexe –, SGSS propose à ses clients de centraliser l’externalisation des ­process front-to-back autour d’un unique ­partenaire de confiance. « Avec le virage ESG pris ces dernières années, nous répondons aux mutations du monde qui nous entoure. Nous sommes la banque de confiance par excellence, et ce, dans un pays qui restera, au cours des prochaines années, une place financière essentielle pour la gestion d’actifs », conclut Guillaume Roch.

ir plus n savo S ? e z e it SGS ouha Vous s services de s ur s e l s sur z-vou Rende

le.lu

enera

eg societ

Carte blanche

ALFI 2021

34

Photo

The next decade will belong to sustainable inves- ­greenwashing, which will benefit us all. Bringing tors – I don’t have a doubt. Covid-19 and intense more transparency to retail and institutional invesclimate events have profoundly disrupted our tors will help reorientate capital flows towards lives and highlighted the social and environmen- sustainable investments, getting us closer to a scetal imbalances of our world, making the need for nario where these solutions are the norm, and not action even more pressing. Societies, leaders and the exception. This is quickly approaching, and our industry needs to be ready to respond. Instiinvestors are aware of this, as well as of the fact that today’s investments in making the world tutional investors used to account for the lion share better will create tomorrow’s competitive edge. when it came to sustainable investment demand, Our industry is a good example. Last year, a but end investors are quickly catching up and the record 500 new ESG funds were launched and implications of their involvement require more 250 conventional funds enhanced their sustai- imaginative solutions and channels. As someone nability parameters. Assets in European sustai- who has been in this industry for over 20 years, nable funds grew 52%, driven by significant flows, seeing this evolution is certainly encouraging. converted assets and rising financial markets.

Large investors like us have always worked The opportunity is immense, but challenges hard to help our clients live the life they want by can’t be overlooked. The science, technology and meeting their financial needs. Now, we can also data guiding much of the activity towards long- play a crucial role in driving real positive change term sustainability are evolving daily. Social to the world by channelling capital to values and economic thinking are those companies contributing to the also shifting, and the regulatory solutions for the challenges we face as societies. From pri­­vate framework is adapting to reflect to public markets, from starthis reality. tup initiatives to driving Aligning investment floors, change in large-listed comramping up compliance pro­ MICAELA FORELLI Managing Director Europe cedures, developing meapanies, real active investors M&G Investments surement guidelines and can help governments and acquiring external data are “More transparency societies fill the €2.1trn per only some of the many shortannum SDG funding gap. to investors will help We can change the future term implications. The contireorientate flows for the better, and we’re nued work to define the right determined to deliver. framework for increased towards sustainable ­c larity on sustainability investments.” is the only way to fight Author MICAELA FORELLI

M&G Investments

Reimagining distribution for sustainable investment solutions

Carte blanche

AIFM et SFDR : évolutions et impacts sur les FIA

Photo

Société Générale Securities Services

La directive AIFM (Alternative Investment Fund Managers) a permis la création d’une licence pour les gérants européens de fonds d’investissement alternatifs (FIA), ainsi qu’une nouvelle forme de dépositaire pour surveiller les actifs de ces FIA, actifs non conservables dans le réseau des sous-conservateurs, s’agissant majoritairement de placements en immobilier et private equity.

un projet d’acte délégué pour intégrer dans la directive AIFMD le risque de durabilité dans la décision d’investissement. SFDR impacte donc bien les FIA.

Quels sont les challenges de SFDR ?

Le premier challenge est d’implémenter SFDR en trouvant des synergies dans la mise en place d’outils informatiques afin d’éviter des redondances et coûts inutiles.

AIFMD II ?

La consultation lancée en octobre 2020 par la Loin d’être aisé, le deuxième challenge réside Commission européenne auprès des gérants dans la collecte de données extrafinancières, surd’actifs et des dépositaires de FIA a montré tout pour les fonds immobiliers ou de private que, majoritairement, les pays de l’UE ne sou- equity. Les investisseurs friands de durabilité et haitent pas faire évoluer le texte de niveau 1 de rendement pousseront les gérants à intégrer d’AIFMD et veulent, par exemple, conserver ces critères verts, qui pourraient se transformer rapidement en critères majeurs. le dépositaire du FIA dans le pays où le D’autres challenges, comme l’abfonds est domicilié. sence de définition universelle du SFDR impacte-t-il AIFMD ? risque de durabilité et de méthoDepuis le 10 mars, les sociédologie de calcul des critères tés de gestion et les gérants ESG, sont à anticiper. La prade FIA appliquent déjà les tique du gold plating avec JEAN-PIERRE GOMEZ des règles locales plus con­ premières mesures du règleHead of regulatory & public affairs Société Générale Luxembourg traignantes risque d’avoir ment SFDR (Sustainable Finance Disclosure Regudes conséquences sur la dis« La pratique du gold lation) en indiquant dans tribution transfrontière. les prospectus des fonds plating avec des Société Générale partileur stratégie d’investissecipe activement aux débats règles locales plus ment durable et leur classur SFDR et AIFMD tant à sification. Ils fournissent contrai­gnantes Luxembourg qu’en France, également des données et dans les autres pays où risque d’avoir extrafinancières et ESG. SGSS agit comme déposides consé­quences C’est devenu ainsi une oblitaire d’actifs : Italie, Allema­ gation réglementaire. gne et Irlande. sur la distribution En avril dernier, la Com­transfrontière. » mission européenne a pu­blié Auteur JEAN-PIERRE GOMEZ

Les cartes blanches sont à retrouver en intégralité sur paperjam.lu.

Carte blanche

Asia: a burgeoning – sometimes challenging – market

Local service teams, a must-have It is also essential to demonstrate a strong commitment to the region through the establishment of local service teams, and various forms Understanding the unique characteristics of the Asian market of community and industry involvement. A wellWhile the opportunities are plentiful, Asia also thought-out business plan with specific focus poses a number of challenges for managers. The areas and objectives is essential, complemented region includes a variety of distinctive cultures, by a commitment to stay the course and make languages and markets that are in various stages the necessary investments to achieve this plan. of evolution. It is tempting for managers to Such a thoughtful, deliberate approach holds view Asia as one big growth story, the potential to reap significant rewards but such an approach is unlikely for managers who decide to enter to be a winning strategy. this burgeoning market.

At the ALFI Global DistriThe global firms that have established a successful track bution Conference, we’ll be record in this part of the ANDREW GORDON exploring what success in Managing director Asia world are those who have the Asian markets looks like, RBC Investor & Treasury Services invested the necessary time talking with practitioners and experts about China, and effort to understand the “It is tempting the alternative investment unique characteristics of the for managers to Asian market. landscape and the distribuview Asia as one big tion of traditional funds in To be clear about the this exciting region. growth story, but areas and the objectives such an approach This has often required a level of experimentation is unlikely to be a with different initiatives winning strategy.” that have resulted in sucAuthor ANDREW GORDON ALFI 2021

36

RBC Investor & Treasury Services

cesses and, on occasion, missteps. Managers entering the region need to be clear about their specific focus areas and how their firms are going to achieve their growth objectives, ensuring that they do not stretch themselves too thin.

Photo

Recent economic growth and wealth creation in Asia have been nothing short of extraordinary at almost every level of the financial system, including the retail, mass affluent, high net worth and institutional sectors. The region still holds significant potential for asset managers – both traditional and alternative managers – and many firms are looking to participate in this exciting market.

Carte blanche

Photo

Aberdeen Standard Investments

Asian distribution: still attractive in 2022?

Fund distribution in Asia is always hotly debated So, Asia has done better than other regions over the last year, but is there anything new to in the boardroom, and the conclusions vary dramatically – from asset managers who have Asia’s story? committed and proven success to those who The digital distribution, a new reality are still vehemently sceptical about the benefit With Hong Kong and Singapore vying as tech of entering Asia at all.

We are now over a year into a pandemic world. hubs, digital distribution is the new frontier. PlayHas the debate on Asia changed at all? Let’s look ers are varied – there are the incumbents such as at how our industry fared over this time, whether Citi, who launched a digital-only platform in Hong there are any new opportunities and lastly if the Kong in February this year. We see a plethora of tech firms enter the segment, both large estabchallenge of Asian fund distribution has changed. lished ones such as Grab – the Uber of Southeast For those sitting in Asia during the global Asia – alongside fast-growing fintechs such as financial crisis in 2008, it was clear that the region Hugo Save. Digital distribution is not new to the reacts to a crisis differently to the West. March 2020 world, but in Asia, once you go beyond HNWIs, was a different crisis but clearly reinforces that the majority of savers do not have easy access to Asia is a diversifier for global asset gathering. The investment services. This is the key difference in combination of diligent pandemic management by governments coupled with the high net new the opportunity of this channel versus mature and wealth creation meant it was mostly business as over-advised Western markets.

If the opportunity is indeed even more attracusual for our industry and clients in 2020. In fact, tive than pre-crisis, then what about the chalyou could say for many it was business better lenges? Fund distribution in Asia is still a than usual. UBS Wealth Management noted APAC (Asia Pacific) net new game of unforced errors, in that, if you money of USD25 billion – 58% of maintain the quality of your sales commitment longer than your its global net new money – and peers, you will succeed. Howprofited up from USD500 milever, over the last six months, lion to USD1,060 million. Taking Broadridge’s GMI figures, ANDREW HENDRY the number of peers has risen.

Head of distribution – Asia Pacific we see a similar story: in Even private market giants Aberdeen Standard Investments March 2020, APAC cumulahave joined the fray with semi-liquid funds for wealth tive net flows barely registered “2020 flows 2022 is certainly the crisis, continuing to grow evidenced that Asia channels. through 2020, whilst EMEA much more attractive but only is strongly additive for those with ironclad com(Europe, Middle East and mitment.

Africa) flows dropped into net to global sales negative, taking six months to strategies.” recover to the same level.

Author ANDREW HENDRY Les cartes blanches sont à retrouver en intégralité sur paperjam.lu.

Carte blanche

Difference as an opportunity

ALFI 2021

that difference creates.”

38

Author SAMANTHA KEMSLEY

Photo

An opportunity to get to know people better What does having friends at work really mean? I see it as an opportunity to get to know people better. I love to have friends who open my mind to different ways of thinking, working and feeling. What a fantastic opportunity we have had during Covid-19 to do exactly that!

Did you know Dave had a dog? Well, we do now… we hear her bark and howl on

conference calls. Because he has Bessie, he will need to take her for walks, so he may do “walk and talk” meetings.

Did you know Nick had a new baby and she loves to jabber on and sing happily away while he’s doing meetings? It also means he is a bit tired!

Not only have we been bringing our “whole lives” to work, we have also become more aware of the stresses and joys within our colleagues’ lives. This knowledge brings kinship and a different kind of friendship. If we don’t reflect on that as a good thing, we risk missing that opportunity to embrace the differences in each other.

Some of us may have had virtual teams for a while, but being fully virtual in all of our interactions has meant that we needed to think more carefully about how both we and our colleagues like to communicate and what cues we can “see”.

One of the things that amuse me is the faces people pull on video calls – would you really make that face if you were in a room in front of someone? There are so many cues we can look out for that show how people are coping.

As managers and colleagues, we need to be looking out for cues and learning about our teams; otherwise we might miss that opportunity to gain a deeper SAMANTHA KEMSLEY understanding at an individual Managing director CAO EMEA level and learn more about ourand chair of Inclusion & Diversity State Street Bank Limited selves in the process. Difference is opportunity, let’s embrace it “Reflecting on together for a more enriching work environment. the opportunities

State Street Bank

Our upbringing and values are what shapes us in life. These traits come from our caregivers and their upbringing, and so the pattern somewhat continues from generation to generation. We could choose not to step outside of these patterns, or we could see difference as an opportunity and open ourselves to the possibility that there isn’t just one way to view the world. In this article, I will reflect on difference as an opportunity as well as on missed opportunities to learn more about each other.

My father always said to me, “you don’t go to work to make friends”. He was a great man who worked for 37 years as a chemical engineer, is now 20 years into his retirement and does not have a wide circle of friends around him to lean on. What a missed opportunity not to make friends at work. What a rich and diverse group of friends one could have when it comes to social and cultural background, experience and much more.

Carte blanche

Photo

Arendt & Medernach

Quel intérêt, pour les clients privés, de créer un fonds ?

Historiquement, le Luxembourg est une juridic- distribuent rarement des dividendes. Ainsi, l’extion réputée pour les clients privés désirant conser- clusion de la SPF du bénéfice des conventions fiscales et de la directive sociétés mère-filles ver leurs actifs dans un environnement financier porte peu à conséquence. et politique stable. C’est également un centre Au-delà de cela, la SPF peut employer son financier mondial, leader pour les fonds d’invespropre conseiller financier dédié à ses investissetissement. Fort de ces deux atouts, le Luxembourg ments, ce qui est accepté par le milieu bancaire est devenu un lieu de prédilection pour l’emploi et n’implique aucune exigence réglementaire de structures d’investissement à destination des additionnelle. Alternativement, la SCSp est une clients fortunés. Initialement, les clients privés structure intéressante pour des investissements établissaient leurs fonds d’investissement sous des formes régulées comme les fonds d’investis- de type « club deal », lorsque deux ou trois invessement spécialisés (FIS) et les sociétés d’investis- tisseurs se connaissant bien souhaitent investir sement en capital à risque (SICAR). dans des cibles prédéfinies. La SCSp permet alors Cependant, la tendance s’est récemment inver- de régir la relation entre ces individus et l’associé sée : les structures non réglementées ont gagné commandité de manière flexible et confidentielle en importance, notamment grâce à la moderni- (acte constitutif sous seing privé). En outre, il n’est sation et à l’adaptation de la législation aux besoins pas nécessaire de nommer un gestionnaire de du marché. Ces structures présentent de nom- fonds alternatifs en l’absence de levée des capibreux avantages : flexibilité, rapidité de mise sur taux et de vaste stratégie d’investissement. Grâce le marché, rentabilité et contraintes réglemen- à cette exemption au sein de la réglementation taires limitées. En fonction du projet, le fonds AIFM, un groupe fermé d’investisseurs peut se d’investissement peut prendre la forme doter d’une structure privée peu contraid’une société de gestion de patrimoine gnante. Ainsi, le Luxembourg offre de familial (SPF), d’une société en nombreux outils pour structurer commandite spéciale (SCSp) ou efficacement les investissements d’un fonds d’investissement privés selon chaque stratégie alternatif réservé (RAIF). d’investissement souhaitée, chaque projet étant en prinLa SPF est une structure MAX KREMER Partner, Private Clients cipe accompagné par les adéquate pour les individus Arendt & Medernach banques, gestionnaires de qui souhaitent investir, entre autres, dans des instruments « Luxembourg offre fonds et conseillers juridiques financiers liquides. Celle-ci expérimentés en clientèle de nombreux outils privée internationale. est également intéressante pour structurer dans le cadre de stratégies de capital-risque, permetefficacement les tant une sortie en douceur investissements. » des cibles sous-jacentes qui Auteur MAX KREMER Les cartes blanches sont à retrouver en intégralité sur paperjam.lu.

Carte blanche

ALFI 2021

40

Photo

The size of European fund platforms has grown mentation of fund distribution. With MFEX, significantly over the past five years through the they have immediate access to 350 fund distriacquisition of a larger share of the total fund mar- butors. This model involves managing the comket. In parallel, M&A operations have led to the plexity of cross-border distribution, leveraging concentration of more than two thirds of total technology to meet the challenging requireinstitutional platforms’ assets under administra- ments on due diligence and oversight of any tion on three leaders, including two central secu- stakeholder in the distribution network. rities depositories (CSDs).

With regulatory pressure continually rising, The main drivers of growth are rooted in an the industry is looking for solutions to reduce the increased demand for product specialisation, a administrative costs and accelerate the sales process. Full transparency in the sub-distribution high pressure on fees among all stakeholders, and a constant expansion of regulation. Fund distri- network is commonly a requirement, and a lookthrough approach is mandatory for all professiobutors have now fully integrated the fund platform model in their strategy. They are making the choice nals. We observe a multiplication of efforts across to save costs and focus on their core business, fund distribution counterparties due to the interexternalising their flows, bearing tremendous mediation in the fund distribution model.

MFEX has developed its own digital comregulatory requirements; they are looking for efficiency and agility. They outsource their rebates pliance service with Global Fund Watch that facicollection, KYC, and data solutions to fund plat- litates any due diligence process, standardised or forms that mutualise efforts and trailer tailor-­made, in a secured and centralised fee rates between different European platform, acting to streamline and oversee the process. Other disrupdistributors with the goal of hartive models are emerging with monisation and growth of revefintechs and blockchain trying nues. Fund platforms are offering direct access to a global and VIRGINIE LOISEL to tackle the challenges of fund Managing director diversified fund universe; more distribution, which might be MFEX Luxembourg than 35% of the European traneffective on direct-to-consumer saction flows are now supported “Fund platforms distribution only. by fund platforms and we will platforms bring value are offering direct andFund see an acceleration. efficiency in the B2B disaccess to a global Fund management compatribution model with scalable nies are also relying on fund benefits. and diversified platforms adding benefits and fund universe.” finding solutions to the fragAuthor VIRGINIE LOISEL

MFEX Luxembourg

Fund platforms adding value and efficiency to the distribution model

Carte blanche

And how green is your fund?

Photo

Linklaters

A lot of questions have been asked. Many have tried to find a way around it. Most fund managers, however, can hardly ignore ESG anymore.

The EU Sustainable Finance Regulation has played a major part in this, in particular the Disclosure Regulation (SFDR), which came into effect on 10 March this year.

Under the SFDR product-level obligations, European fund managers have been forced to classify all their products and, depending on the classification, comply with certain disclosure obligations. Funds that have the objective of sustainable investment qualify under Art. 9 of the SFDR (“dark green products”) and need to comply with the most stringent obligations. Funds that merely promote environmental or social characteristics (“light green products”) fall within the scope of Art. 8 and are subject to a less burdensome regime. All other investment funds are Art. 6 products (“non-ESG products”) with minimum obligations.

Preventing greenwashing It remains to be seen to what extent the SFDR will reach its goal of preventing greenwashing and providing end investors with accurate, fair, clear, not misleading product-­ specific information. You can already start to see, however, that the new rules are, as intended, not only about transparency, but that they change the product landscape as a whole. Fund managers have been under high pressure to

classify their new funds at least under Art. 8 in order for their marketing teams to legally advertise their products as ESG friendly. Investors want to see this. Consequently, investment strategies need to be amended to include the promotion of the advertised ESG characteristics, thereby making the products greener or more social.

Thankfully, the application date of the longawaited SFDR Regulatory Technical Standards has been delayed by six months to 1 July 2022.

Some of the imposed requirements are overly bureaucratic or disproportionate. And many important questions remain unanswered, leaving the markets with a high degree of uncertainty.

Even the long-awaited Q&A, published by the European Commission on 26 July, in response to queries raised by the European Supervisory Authorities (ESAs), has not been helpful. Unfortunately, the Q&A is not very clearly drafted, and in many cases the Commission has not even tried to answer the specific questions, responding with just a summary of the SFDR wording.

Providing pragmatic and MARTIN MAGER realistic answers to these and Partner – Investment Funds many other questions that have Linklaters LLP been raised would allow mar“Investment ket participants to upgrade from the current rather minstrategies need imalistic approaches to a full to be amended implementation of the regulatory regime that the SFDR to include the aspires to be.

promotion of the advertised ESG characteristics.”

Les cartes blanches sont à retrouver en intégralité sur paperjam.lu.

Author MARTIN MAGER

Carte blanche

ALFI 2021

42

Photos

On 10 March 2021, the Sustainable Finance Dis- First, Article 11 of the SFDR that concerns the closure Regulation (SFDR) entered into force, “transparency of the promotion of environmental marking the first milestone in the new sustaina- or social characteristics and of sustainable investbility disclosure requirements for financial market ments in periodic reports” still applies. Similarly, participants (FMPs). The SFDR’s level 1 require- the EU Taxonomy Regulation, which was expecments had several impacts – at the entity level, ted to apply at the same time as the SFDR level 2 FMPs needed to integrate sustainability risks into requirements in January 2022, has not been their investment process through a sustainability postponed. This means FMPs are still required risk policy and remuneration policy. These requi- to update their pre-contractual documents and rements also introduced the concept of principal periodic reports with EU Taxonomy-required information (Articles 5, 6 and 7) and SFDR adverse impacts (PAI), requiring FMPs to disclose whether they considered the adverse impact of requirements by January 2022. Considering the their investments on sustainability factors. slow progress of ESG data providers to calcuAt the product level, the SFDR introduced a late financial products’ taxonomy alignments, new classification system regarding environmen- publishing this information by January 2022 could prove to be very challenging. tal, social and governance (ESG) neutral products (Article 6), light green products (Article 8) and dark Second, as the RTS’ final adoption date is still green products (Article 9). FMPs needed to clas- unknown, FMPs are unsure of how to best approach sify their products and enrich their pre-­contractual the inclusion of RTS requirements in their disclodocuments with related sustainability information, sures. One option is to start using the draft RTS in their updated pre-contractual documents for and publish this data on their website.

The next step is the application of the SFDR’s the January 2022 deadline to avoid multiple changes level 2 requirements, which was initially planned and allow more time for implementation, taking for January 2022 as the SFDR’s final regulatory the risk that the RTS could be significantly amended. technical standards (RTS) were expected to be Another option is to wait for the RTS’ final adopadopted in June 2021. However, due to the RTS’ tion before making any changes, which will genelength, technical details, expected amendments rate an important workload between the release and delayed submissions by the ESAs (European of the final RTS and 1 July 2022.

Supervisory Authorities), the European CommisELODIE VANDEWOESTYNE sion decided to postpone the SFDR level 2 requiManager Strategy, Regulatory and Corporate Finance rements by six months.

Deloitte Luxembourg FRANCESCA MESSINI While this six-month deferral was welcomed Partner and FinTech & sustainable by the industry, some uncertainties and challenfinance leader ges remain.

Deloitte Luxembourg

Deloitte Luxembourg

Sustainability disclosure challenges: the ever-changing timeline

Carte blanche

ALFI 2021

44

Photo

Many people from around the world have already Considering the exponential demand for international diversification arising from LatAm found joy in Latin America, either visiting one of its wonders of the world or enjoying its long-­ investors plus the predicted AUM growth, the region seems to genuinely be the sweet spot lasting summers. The region is globally known many international asset managers have been for its wide cultural diversity, tasty cuisine, and looking for; but to do so the deep dive is comcountless smiley faces.

LatAm is home to 652 million people (67% pulsory – since the joys seen on the surface are being economically active), and, combined, not necessarily applicable to businesses.

Contrary to the aforementioned joys, the LatAm economies would form the third largest region has relentlessly preserved its high-risk country in the world with a GDP of $4.8 trillion status due to the political stability and fiscal (2020). Numbers are superlative there. mismanagement. The consequence? Serious LatAm has recently gained pace of venture obstacles for funding the future. LatAm infraactivity, investors rang up a record number of 488 deals in 2020 while pouring more than structure investment gap is estimated at $150 bil$4 billion into start-ups for a second consecu- lion per year and it will realistically persist if it tive year. The Brazilian digital bank Nubank, only relies on public spending and PPIs. which is valued at $30 billion after receiving an Considering that global institutional investors investment from Berkshire Hathaway, is mate- are expected to increase by 27% their allocation rial evidence of such momentum. With over into alternative investments and the consistent 40 million active users acquired within less than search for yield derived from global private inveseight years in Brazil, Colombia and Mexico, the tors, the region could also be the sweet spot many insurgent fintech has only just entered the asset global investors are looking for. If, on the one hand, funding the LatAm future lies on its own management business. capacity to attract, retain, develop, and On the investor front, LatAm private and institutional investors hold today deliver value to non-LatAm investors around $3 trillion in assets. By 2025 as well as to LatAm investors, on it is estimated that this figure will the other hand, international asset soar up to $5 trillion. An entire managers should continue the journey beyond their captive new generation of millions of JEFFERSON OLIVEIRA markets and pragmatically eager digital (native) investors, Asset & wealth management director PwC combined to the upsurge of embrace both investments and gross national income and the fund distribution in the region, “Is a $4.8 trillion seamless investment experience being aware that joyfulness economy with offered by LatAm based asset might be found in business there managers, is one of the factors as well. $3 trillion of AUM forging the new asset manain your plans?” gement scene in Latin America.

Author JEFFERSON OLIVEIRA

PwC

(Re)finding joy in Latin America

Carte blanche

Photo

Maison Moderne (archives)

Supporting next-gen fund distribution Luxembourg, with its unique networks of opera- tribution chain as it is, this requires profound tional and business experts combined with inno- changes in systems and operations. The technovative FinTech, is far advanced with the fund logy is simply not up to the job. A blockchaindistribution revolution. based infrastructure shared across all actors enables Fundamental, long-term changes are underway, the fund industry to step up their game.

However, while many in the industry can see which will greatly enhance the ability of all distribution actors to grow and develop in the future. the opportunities in this, it is a big change, and moving from legacy systems requires resources There are three basic approaches to release this vision. The first is to streamline and to make the and efforts. The willingness is there but the main fund distribution chain itself more efficient. Cur- issue is agility. With their specific talent and experrently, the various actors in the chain do not work tise, the FinTech provide support for adoption.

The FinTech look at product development together effectively or in a cost-effective manner and product management in an iterative and and produce many redundancies. collaborative way. Fund actors should build Secondly, while the chain contains much incrementally by working from use cases and valuable data and information, it is difficult and expensive to aggregate, and too often proofs of work that make strong business sense, under-exploited. Data volumes are growing, one step at a time. This step-by-step way of and the ability to access and master data flows working means that less resources and time are will be an important differentiator, as already needed to see an initial result that has immeseen in many other industries. Distribution diate, real-world use. Further along, any iterated actors can get real and actionable insights version of a product ‘learns’ from what has come before. that improve operational processes What this approach means is and their relationships with other that firms should favour agile actors, in particular the end investor. Getting closer to product management for digithe end investors is now key, tal transformation. The end OLIVIER PORTENSEIGNE result will be a more intelliespecially for asset manaCEO FundsDLT gers, who generally have no gent and adaptive distribution real view on them. Additiochain. Importantly, distribu“Success with nally, if they want to attract tion actors can respond nimbly next-generation more investors, the buying to any market changes. As in and client experience need the past, the future belongs models means to those who are most adapto be greatly optimised and getting the table to change. made much simpler and easier for investors. roadmap right and However, with the existing embracing change.” ways of working and the disAuthor OLIVIER PORTENSEIGNE Les cartes blanches sont à retrouver en intégralité sur paperjam.lu.

L’ALFI entretient des rapports étroits avec ses homologues à Hong Kong (HKIFA) et aux États-Unis (Nicsa). Sally Wong et Jim Fitzpatrick, leurs CEO respectifs, nous en disent plus sur les défis qui attendent le secteur.

Interview croisée

« Nous cherchons à nous aligner sur les pratiques luxem­ bourgeoises » JIM FITZPATRICK Président et CEO de Nicsa (National Investment Company Service Association)

ALFI 2021

SALLY WONG CEO de HKIFA (Hong Kong Investment Funds Association)

Nicsa et Maison Moderne (archives) Photos

À un niveau global, quels sont aujourd’hui les défis que l’industrie des fonds doit relever ?

SALLY WONG (S. W.) Parmi les éléments qui se situent tout en haut de l’agenda du secteur ­financier, en Europe, on trouve le développement d’une finance verte et durable qui commence à être encadrée par des réglementations comme SFDR (Sustainable Finance Disclosure Regulation) ou la taxonomie verte. On attend désormais des gestionnaires de fonds qu’ils supportent activement la cause de la finance verte et durable, particulièrement lorsqu’elle touche aux risques liés au climat.

Cela implique, entre autres, l’intégration des critères ESG (critères environnementaux, sociaux et de gouvernance) au sein du processus ­d’investissement et de gestion des risques. De la même façon, à Hong Kong, la finance durable est également une priorité dans l’agenda réglementaire. Dans le secteur de la gestion de fonds, la HKSFC (Hong Kong Securities and Futures Commission) a travaillé dur, publiant son Consultation Paper on the Management and Disclosure of Climate-related Risks by Fund Managers, dont les conclusions seront rendues dans quelques mois. Elle a également publié une circulaire révisée sur les fonds ESG. Ces différentes démarches nous ont permis de partager avec le régulateur notre espoir de voir les approches adoptées s’aligner autant que possible avec l’approche de l’Union européenne et, en particulier, avec les pratiques luxembourgeoises. Nous espérons également que nous pourrons synchroniser l’implémentation de ces réglementations.

JIM FITZPATRICK (J. F.) Même si tous les marchés financiers n’opèrent pas sur le même terrain, les gestionnaires de fonds rencontrent des défis similaires sur toute la planète. Le marché global des fonds d’investissement est devenu très concurrentiel. Les investisseurs sont devenus plus sophistiqués, leurs attentes ont atteint un niveau supérieur. Les demandes pour plus de transparence et de reporting se font plus nombreuses, alors que la pression pour voir les frais de ­gestion diminuer s’intensifie.

Pour les gestionnaires d’actifs américains, ­distribuer des fonds en Europe ou en Asie implique souvent de relever un ensemble de défis. La ­diversité 47

des structures légales et opérationnelles ainsi que les importantes exigences réglementaires dans différentes régions du monde peuvent en effet constituer des obstacles à la distribution de fonds.

En particulier les réglementations mises en place pour augmenter l’indispensable transparence du secteur, notamment la SFDR, ont engendré des exigences de reporting supplémentaires pour les gestionnaires d’actifs non européens dans le ­secteur des fonds ESG. Les fournisseurs de fonds américains qui souhaitent distribuer leurs fonds ESG à l’international doivent gérer des exigences de reporting qui varient parfois beaucoup en fonction des régions, et trouver des moyens d’être en conformité partout, de façon à ne pas passer à côté de parts de marché intéressantes.

Cela étant dit, les nouvelles réglementations peuvent aussi représenter des opportunités pour les gestionnaires d’actifs qui sont capables de s’adapter à la rapide évolution réglementaire que nous avons connue au cours des deux dernières décennies.

Quelle est l’importance de Luxembourg dans ce marché global ?

Pourquoi est-il intéressant, pour vous, d’entretenir une relation étroite avec cette Place ?

S. W. Les fonds domiciliés au Luxembourg représentent la part du lion dans le marché des fonds à Hong Kong. À la fin du mois de mars 2021, 1.035 des 2.217 fonds autorisés par la HKSFC étaient domiciliés au Grand-Duché, soit 47 %.

En termes d’actifs sous gestion, la part de ces fonds est encore plus importante, puisqu’elle s’élève à 69 %. Le succès des fonds domiciliés au Luxembourg sur le marché de Hong Kong peut être attribué au cadre robuste et pragmatique qu’offre le pays, ainsi qu’à l’importance qu’y revêt la protection de l’investisseur. En raison de ce lien fort, nous suivons avec attention les développements sur le marché luxembourgeois des fonds. De manière plus générale, en Asie, les fonds UCITS (Undertakings for Collective Investment in Transferable Securities), sur lesquels Luxembourg a bâti son succès, sont de plus en plus populaires, que ce soit à Hong Kong, à ­Singapour, à Taïwan ou même en Thaïlande.

Cela est dû au fait que la distribution des fonds dans ces pays repose encore beaucoup sur les banques, qui disposent d’une gamme UCITS complète, avec des produits qui combinent les classes d’actifs. Ces fonds atteignent souvent une taille importante et disposent d’un track record convaincant, ce qui leur fournit un réel avantage compétitif, dans la mesure où les banques sont très attentives à ces éléments. À ce titre, il est important, pour nous, de rester au fait des développements réglementaires luxembourgeois liés notamment à ce véhicule.

J. F. Luxembourg est le plus important domicile de fonds en Europe et le second plus important au monde, avec des fonds distribués dans 70 juridictions.

La Place a atteint cette position solide au niveau global en combinant plusieurs facteurs, notamment un marché potentiel important dans l’ensemble de l’Europe et à l’international, certains avantages fiscaux, et une position saine par rapport à la réglementation.

Au cours des dernières années, l’action globale contre les structures étrangères pratiquant l’évasion fiscale s’est intensifiée et de plus en plus d’investisseurs sont attirés par le Luxembourg, précisément en raison de cette combinaison qu’il offre entre les avantages fiscaux et une conformité élevée avec les exigences réglementaires. L’attractivité du Luxem-

JIM FITZPATRICK Président et CEO de Nicsa (National Investment Company Service Association)

« La Place est sur une trajectoire ascendante assez impressionnante. » ALFI 2021

48

bourg a aussi augmenté au cours des dernières années en raison de la demande plus importante pour des fonds d’investissement alternatifs, un secteur pour lequel Luxembourg est bien connu. L’ALFI estime d’ailleurs que les actifs sous gestion dans des fonds alternatifs ont presque triplé entre 2008 et 2020. Les investissements alternatifs, qui étaient autrefois plus courants chez les investisseurs institutionnels, deviennent en effet de plus en plus accessibles aux investisseurs retail. Cette base grandissante d’investisseurs s’est constituée en réaction à la volatilité des marchés traditionnels et à l’inflation, mais aussi en raison des avantages spécifiques offerts par les fonds alternatifs, notamment la perspective d’obtenir de meilleurs rendements.

Le Brexit n’a fait que renforcer cet attrait du Luxembourg, puisque les règles actuelles n’autorisent plus les gestionnaires d’actifs britanniques à distribuer leurs fonds en Europe. Cela a donné au pays l’opportunité de travailler avec des gestionnaires d’actifs britanniques et américains qui souhaitent accéder au marché européen.

Comment collaborez-vous avec l’ALFI ?

En quoi est-ce important pour vous ?

J. F. La relation que Nicsa entretient avec l’ALFI est forte. Elle permet à nos membres de rester informés sur certains sujets comme les fonds alternatifs, les fonds ESG et la réglementation internationale. La collaboration et le partage de bonnes pratiques sont intéressants non seulement pour les professionnels des produits et de la distribution, mais aussi pour ceux qui travaillent dans les opérations, la compliance, etc. L’ALFI et Nicsa, avec leurs centaines de représentants, de membres de comités et de partenaires, jouent un rôle important en connectant les gestionnaires d’actifs les plus importants au monde.

S. W. En tant que place financière, nous avons beaucoup à apprendre du succès rencontré par le Luxembourg dans la distribution transfrontalière de fonds.

L’ALFI a fait un travail remarquable pour promouvoir les UCITS en Asie et fournir le support nécessaire aux régulateurs et aux industries qui souhaiteraient utiliser ce véhicule dans dif-

How to regulate crypto-assets without killing them Luc Falempin (Tokeny)

Laurent Kratz (Neofacto Luxembourg)

Nadia Manzari (Schiltz & Schiltz)

Nasir Zubairi (LHoFT)

Come and join the four leading voices: Nadia Manzari, Nasir Zubairi, Laurent Kratz and Luc Falempin and hear their insights about how one can regulate crypto assets without suffocating the very innovation crypto was invented to enable.

Trading crypto happens on centralized and decentralized exchanges.

Centralized is easier to regulate as there is a legal entity that owns the platform and thus is liable. Decentralized is more discreet and enable crypto-to-crypto trading. Decentralized exchanges are often governed by policies or statutes as selected by holders of the asset that is traded on the exchange, but are the traders aware of the rules they are subject to?

REGISTRATION REQUIRED ON CLUB.PAPERJAM.LU

W E D N E S DAY

17

N OV E M B E R

18:30

SALLY WONG CEO de HKIFA (Hong Kong Investment Funds Association)

« Les fonds UCITS sont de plus en plus populaires en Asie, jusqu’en Thaïlande. » férentes juridictions. Depuis longtemps, nous entretenons avec l’ALFI une relation étroite et très précieuse à nos yeux. Les tournées de ­l’association dans notre région, que ce soit en présentiel ou de façon virtuelle, sont donc des événements importants dans nos calendriers puisqu’elles permettent à nos collègues luxembourgeois de garder les marchés asiatiques au fait des derniers développements réglementaires au Luxembourg.

Comment voyez-vous le futur de votre marché et de la place financière luxembourgeoise ?

S. W. De notre côté, le plus gros chantier est lié au programme Wealth Management Connect, un programme transfrontalier lancé dans la région de la Grande Baie de Guangdong-Hong Kong-Macao (Greater Bay Area, GBA). Il a en effet une importance stratégique énorme et représente un jalon important dans la libéralisation des capitaux en cours en Chine continentale. Il constitue aussi une avancée majeure dans le développement du business offshore en devises chinoises depuis Hong Kong.

La première phase de ce programme prévoit de ne prendre en compte que quelques types ALFI 2021

50

de produits, dont des fonds autorisés par la HKSFC, ce qui prouve sa capacité à fournir un cadre réglementaire robuste et flexible. Au départ, seuls les fonds domiciliés à Hong Kong et présentant des risques peu ou moyennement élevés seront éligibles. Cela constitue toutefois déjà une avancée majeure, sachant que c’est la première fois que les fonds domiciliés à Hong Kong pourront être rendus disponibles à la vente publique, directement sur le continent.

Les managers sont équipés pour ce changement et dialoguent de façon rapprochée avec les banques désignées comme canaux de distribution. Le programme peut potentiellement offrir une plus grande diversité de produits aux résidents de l’espace GBA ainsi qu’une base d’investisseurs plus large pour les gestionnaires de fonds.

La croissance de la richesse que l’on constate chez les Chinois du continent entraîne, en effet, une demande accrue pour une diversification des investissements vers des actifs offshore.

Nous espérons qu’une fois le programme mis en route, le spectre des produits pris en compte pourra être élargi, en y incluant de façon prioritaire les fonds UCITS. La collaboration avec Luxembourg pourra alors encore se renforcer.

J. F. Pour évoquer Luxembourg, il est incontestable que la Place est sur une trajectoire ascendante assez impressionnante. En tant que leader en matière de fonds alternatifs, de distribution transfrontalière et d’investissements ESG, il est probable que Luxembourg continue à être un modèle pour la distribution de fonds en Europe dans les prochaines années.

Par ailleurs, alors que l’Union européenne met en place des mesures progressives pour une plus forte régulation et un plus grand respect de l’environnement, il est raisonnable d’attendre du Luxembourg qu’il continue à être un agent du changement et de la croissance.

Auteur Q. D.

www.paperjam.lu

Le rendez-vous de la communauté de la place financière. À partir de janvier 2022, elle sera publiée la 2e et la 4e semaine de chaque mois.

L’actualité de la place financière ABONNEZ-VOUS sur newsletter.paperjam.com

Carte blanche

ALFI 2021

52

Photo

If a consumer walked into a supermarket and saw of intent to drive towards this goal”. While the intention behind the initiative is admirable, the flour labelled as sugar, sugar as salt, and salt starting point of no less than five frameworks unlabelled, they would walk out of the store. Given the status of non-financial reporting, this confu- lays bare the extent of the existing fragmentation. sing situation is what investors who seek to invest It is increasingly evident that the financial sustainably currently confront. By confusing poten- industry has failed to self-regulate on the topic of tial clients, the lack of standardisation of sustai- sustainability reporting, and it therefore may be nable data is likely to cost the sustainable industry necessary for regulators to intervene. Here the EU hundreds of billions of potential asset inflows. It has taken the lead and, building upon the Non-­ also propagates a false narrative that one needs Financial Reporting Directive, has sought to increase to be an expert in order to invest sustainably. corporate sustainability reporting requirements Sustainable non-financial information is, for as part of its wider sustainability action plan.

As regulators now circle sustainability reporthe most part, unregulated and its creation is thus ting, it is important for them to build upon exissubject to the whims of individual companies. ting industry practices and not further muddy Given the lack of standardisation, it does not the waters by creating entirely new and conflicrequire an overly cynical mindset to hypothesise that companies may flatter themselves and be ting standards. If regulators are unwilling to anoint selective in the data they choose to disa ‘winner’ from the current voluntary close. With sustainable investing frameworks, they could do worse than swelling in popularity, an ever-­ return to the supermarket for insincreasing amount of assets are piration. Nutritional information, dependent – to a greater or lesprevalent on packaged foods, ser extent – on this imperfect provides a perfect template of JAMES PURCELL data. This problem is known a good disclosure regulation.

Group head of sustainable investment Quintet Private Bank and, thankfully, there are moves As a result, consumers can nearly afoot to address the issues. At instantly tell which foods align “The EU has taken the end of 2020 five sustainawith their dietary habits and the lead to bility framework and stanpreferences. This is a straightdard-setting institutions of forward client ex­perience that increase corporate international significance is sadly lacking potential sussustainability tainable investors. co-published “a shared vision of the elements necessary for reporting more comprehensive corporate requirements.” reporting and a joint statement Author JAMES PURCELL

Quintet Private Bank

Truth in labelling: the sustainable investment challenge

Carte blanche

The opportunity to make healthcare sustainable

Photo

HSBC

Despite Brexit, the UK and London will continue to play a major role in cross-border fund distribution. What we also don’t expect to vanish is investors’ appetite for innovative thematic solutions. Of these, sustainable healthcare is one of the most exciting.

The principal challenge facing the healthcare sector today is cost. As medical expenses continue to grow, a basic social need is increasingly inaccessible to much of the world’s population.

Budget constraints are restricting treatment access, while therapies for diseases with high out-of-pocket payments are leaving patients with large medical debts. In the UK, for example, a third of new treatments are inaccessible as the government deems them cost-ineffective.

Patient outcomes are negatively impacted, as are healthcare companies and investors. This current model is not sustainable.

Stop the cycle of spiralling costs For investors, the scope of change needed to stop the cycle of spiralling costs, and deliver sustainable healthcare systems, creates both risks and opportunities. Those who are attuned to these stand to benefit, while also contributing to the necessary change.

Old pharmaceutical models of simply charging higher prices for therapies based on added clinical benefits are obsolete.

Likewise, companies continually delivering treatments that add costs to the system

will be hit hardest by tighter budgets or by seeing reimbursements denied, ultimately hurting sales and profitability. Incorporating these considerations into investment decision-­making paves the way for better returns. One might assume standard ESG scoring would differentiate between healthcare companies contributing more or less to the healthcare cost problem.

This is not the case. Some companies with ‘good’ ESG scores are the worst offenders in raising drug prices unjustifiably.

The key role of the investors With patient care accounting for nearly three quarters of total healthcare expense, solutions that can reduce time in care are critically important. We think that a holistic approach to therapies, supported by new tools and technology, can help move healthcare systems onto a more sustainable footing. Investors have a key role to play. In addition to an opportunity to boost returns, they are in a position to reward companies driving more sustainable business models and DAN RUDD Head of UK Wholesale behaviour, and challenge those HSBC Asset Management which aren’t.

“Investors As we have seen with the issue of climate change over recent can reward years, sufficient attention can companies shift ways of thinking and change the world for the better.

with sustainable business models while challenging others.”

Les cartes blanches sont à retrouver en intégralité sur paperjam.lu.

Author DAN RUDD

Carte blanche

ALFI 2021

54

Photo

its damage is increasing. The retail distribution To distribute or not to distribute. The answer is increasingly driven by data quality. Today’s finan- is currently mainly carried out with the support of computers. Long gone is the time of the adviser cial institutions rely on their data more than ever to exist and to perform. Even at the most basic sitting with the client and going through options, operational level, they need be able to collect, nor- ISIN (International Securities Identification Nummalise, calculate, extract and file with the relevant ber) by ISIN, to build an investment portfolio.

Computers take into account KYC information, regulators, and run analytics. By controlling their data, financial institutions naturally lower their throw in product suitability and generate an investoperational and compliance risk and, crucially, ment basket that retail investors can buy in order are able to inform their business strategy. to build their long-term savings.

This is, I know, quite obvious. Indeed, a good Computers often check one data point from understanding of their data will also allow finan- more than one source and discard instruments cial institutions to differentiate their offering and whose data is inconsistent. When computers position themselves and their products in the discard products on the back of data inaccuracy market in a more targeted way. Understanding or inconsistency, nobody notices it. An asset what’s behind your product and linking it to the manager may not distribute a specific fund knowledge you hold of your client is distribution despite increased marketing efforts but doesn’t power. The market demands that we square the know why. Advisers may well be surprised by circle of client centricity combined with an air- the absence of products by this or that asset tight understanding of what’s in our product. If manager in their portfolios but can’t put the data is so critical to success in fund distribution, finger on why that is the case. As we build our how much can we trust it? Our models sugdata management tools for the next decade gest that circa 40% of fund static data and take into account all the added currently in the market suffers from complexity of ESG, let’s make sure some form of inconsistency. In we give the basic question of pubplain English, only 6 in 10 data lic data accuracy its due considpoints published across differeration. As a result, everyone ent data vendors and platforms ENRIQUE SACAU will benefit from it, asset manCEO match all their iterations. This agers because their funds get Kneip visibility as they should, dismeans that asset managers, almost half the time, have dis“The market tributors who can rely on their seminated different data to diffund data source used and invesdemands that ferent destinations: one will tors who buy the funds best we square have information which is suited according to their investslightly, or entirely, different ment preferences. the circle of from another. Data inaccuracy client centricity.” is a silent distribution killer and Author ENRIQUE SACAU

Kneip

Inaccurate data, the silent killer

Carte blanche

The growth of alternative investments in Asia Pacific

Photo

Franklin Templeton

The Asia Pacific region has been a tremendous region for the growth and development of the asset management industry for the past four decades and demonstrated a surprising 18% in mutual fund growth in 2020 despite the impact of Covid-19 on global economies. Looking forward, there are projections of Asia Pacific mutual fund growth at 10% per annum through 2025, led by China (14%) and India (12.1%) and the continued development of Southeast Asian markets i.e.Singapore at 9.8%.

As the financial services industry in Asia Pacific continues to evolve, we see several trends that will influence the future of institutional, wealth management, and retail offerings over the next few years. At the forefront is a transition towards ESG offerings to meet quickly changing customer demands, encompassing both retail and private market funds. Within the past 18 months, the market has seen traditional private equity, private credit, real estate, and venture capital funds adopt ESG overlays across their new portfolios, demonstrating that ESG has impacted A robust wealth management platforms all aspects of the asset management industry. for retail investors The second trend will be the provision of access As the markets adjust to the opportunities across to private market fund solutions that previously were only available to institutional and sophistiboth institutional and retail markets in Asia Pacific markets, the industry has seen several trends. cated wealth management clients. Private market Wealth management offerings across a wide spec- firms have begun to create retail-friendly solutrum of institutions including family and mul- tions allowing access to fund strategies, including ti-family offices, boutique wealth managers, and private equity, private credit, and real estate, that private banking services offered by global finan- were once only available to accredited investors, cial institutions have been the most visand providing a much-needed source of ible area of growth, led by the returns and income to investors. Sevfinancial centres of Singapore and eral funds launched in late 2020 provide private market returns Hong Kong. Many of these finanwith highly flexible liquidity cial institutions provide robust wealth management platforms options for investors, and new for retail (non-accredited) invesRICHARD SURRENCY entrants in the digital asset mantors and are beginning to deploy Head of private markets & alternatives, APAC agement space have begun to Franklin Templeton provide marketplaces for secsophisticated digital and robo-advisory services to retail “ESG has ondary fund liquidity that have customers, with investment proven highly successful. impacted solutions that can resemble all aspects of the more sophisticated private banking offerings, including asset management retail hedge funds in UCITS industry.” format offering daily liquidity.

Author RICHARD SURRENCY Les cartes blanches sont à retrouver en intégralité sur paperjam.lu.

Carte blanche

ALFI 2021

56

Photo

MSCI World Value Index over the last 20 years, Stubbornly weak returns from value stocks over the recent decade have prompted many to re-­ shifting from 16.0% to 10.7%. examine style investing. As such, we have identiHowever, within the MSCI World Growth Index, they have collapsed to just 0.2% (from fied four major secular changes that have contributed to a build-up of risks within the value-­ 2.5%). Conversely, technology hardware has risen growth framework. These suggest that future to become 9.0% of the global growth index (premarket developments may involve more than a viously 5.1%) while remaining below 1% of the simple style rotation. Banks and energy are exam- global value index over the last two decades. This ples of value-heavy cyclical industries facing head- not only makes diversification within style more winds that are unlikely to reverse following an difficult to achieve, but also suggests that secular economic recovery. Banks, for example, have faced changes – as they relate to industry – have become sustained low interest rates and tighter regulation. more influential for returns. The rise of the knowlThis has led to them scaling back on their trad- edge economy over the last three decades has led ing activities and reducing their risk exposures to to a significant rise in intangible assets. For style achieve financial stability. These factors have put investors, this challenges the ability to understand dividends under pressure. As such, for banks to a firm’s intrinsic value. This doesn’t make tradibecome long-term winners, many are looking to tional valuation approaches useless but does mean diversify their revenue streams and build out dig- investors need to make adjustments to determine ital capabilities in order to face newer and more true value. Some have responded by attempting agile players. to systematise these adjustments, such as including R&D and even adding a proportion of operFAANG+M have blazed a trail in enabling key technology advances, such as high-speed mobile ating expenses. However, as many of these items internet, artificial intelligence and automation, are difficult to measure, a bottom-up approach the use of big data analytics and cloud is warranted to benefit from company-­ technology. As digitisation grows, specific analysis and qualitative judgeindustry boundaries may become ment. These secular shifts outlined blurred. Firms that have already above show that it is becoming begun diversifying outside of more difficult to consider growth their main industry have seen and value stocks as distinctly NISHA THAKRAR different. Instead, investors their revenues grow 25% higher Client solutions specialist Capital Group than the sector average. This could consider looking within highlights that disruption and both value and growth uni“As digitisation innovation aren’t confined by verses to select stocks that meet grows, industry value and growth labels. their capital appreciation and Industry composition has narincome objectives. boundaries may rowed over time. Banks have become blurred.” Author NISHA THAKRAR remained dominant within the

Capital Group

Rethinking the value-growth framework

Carte blanche

Photo

Clifford Chance

Asset managers embrace private fund retailisation Retailisation of alternative asset classes is the latest to target retail clients requires a country-by-country trend hitting the Luxembourg private funds indus- approach. While not straightforward, with deep try. A mass-affluent clientele eager for healthy knowledge of local regulatory, legal and tax enviinvestment returns are keen to gain exposure to ronments, structures can be created to replicate the likes of real estate and infrastructure, but first, passporting regimes. For example, in Germany, the “semi-professional investor” status comes funds must navigate Europe’s complex range of national legal, regulatory and tax environments. with a steep €200,000 minimum investment before alternative assets can be accessed by priClifford Chance Luxembourg has been working with some of the largest names in global asset vate individuals. However, this minimum can be management to make this happen across the reduced considerably by looking at options other country’s borders, on a pan-European basis. Pro- than basic fund vehicles. In France, using a feeder ducts like the US REIT (Real Estate Investment fund to manage complicated local authorisation Trusts) have proved popular in America and are rules can be the right approach. Each jurisdiction attracting increasing quantities of relatively small has its own characteristics which must be taken investments of a few tens of thousands of dollars into account. There’s nowhere better than Luxemfrom individual investors. This phenomenon is bourg to manage these complexities to achieve called the retailisation of private funds, but this critical mass by creating a central fund hub. success has yet to be replicated in Europe. There Specialists in Luxembourg have years of expeis no ideal off-the-shelf pan-European solution rience dealing with local regulators. Advising on to make this happen. these pan-European fund solutions for indiviThe continent’s AIFMD regulatory regime is dual investors also means leveraging decades of focused on cross-border passporting for experience. We are experts in structuring alternative funds to institutional and open-­ended real estate funds, and we have a strong track record in professional investors, but is not complex UCITS and so-called even targeted at distribution to high net worth individuals.

NewCITS which feature a porStructures such as the ELTIF, tion of alternative investments.

EuVECA and EuSEF created PAUL VAN DEN ABEELE Retail alternative investment Partner by the EU have proved to be has achieved double-digit Clifford Chance growth in the US in recent insufficiently flexible. Some investors have turned to “Each jurisdiction years. This experience is insoptions provided through piring asset managers to seek has its own life insurance and pension to replicate this approach characteristics policies, but these have and meet growing demand limited use and are not parin Europe. which must be ticularly cost effective. To taken into account.” Author PAUL VAN DEN ABEELE create cross-border structures Les cartes blanches sont à retrouver en intégralité sur paperjam.lu.

Carte blanche

The ‘retailisation’ of private markets

ALFI 2021

58

Photo

assets held in private hands, as more companies turn to private managers to finance acquisitions or fund growth. These are among the variety of reasons investors may allocate to areas such as private alternatives.

A third one is trends in asset allocation and portfolio construction. I have seen more investors come to view public and private markets as complementary, not an either/or proposition. Such investors typically apply a goalsbased framework to both areas.

For example, these investors can source any urgent liquidity needs from public markets, but they can find tools to pursue enhanced Decisive factors behind this rise in attention returns in both public and private markets.

A few factors are driving the upswing in atten- They have also discovered that private altertion. One is the pervasiveness of ultra-low yields natives can be useful tools in the effort to improve around the world. To the extent that private diversification and reduce overall portfolio risk resulting from volatility and otherwise. alternatives can help solve long-standing income Not all managers are able to adapt their needs, investors have realised that they can turn private market strategies to mass affluent to asset classes such as private real estate and private credit, two major areas of the priindividuals, who have differing needs from vate alternatives marketplace, for attracinstitutional investors. Blackstone is experienced in this area and tive income potential. Barring a has developed bespoke prodsea change in the state of bond ucts and a high-quality supyields around the globe, I expect this tailwind to continue. port organisation specifically Another factor is the range LEON VOLCHYOK for such individual investors.

Managing director – Real Estate of attractive opportunities Although still labelled The Blackstone Group available in private markets. ‘alternative’ assets, private markets are set to become For example, true growth com“Demand from panies are harder to access in more mainstream in individindividual investors ual investors’ portfolios in today’s world, in part because for private markets the years to come. many promising firms have decided to remain privately will only increase owned for longer. There are in the future.” also a range of high-quality Author LEON VOLCHYOK

The Blackstone Group

Today, we are in the early stages of mass affluent investor participation in private alternatives.

One way to observe the early character of the individual investors’ private alts (alternative funds) adoption is to contrast their relatively paltry allocations to these assets – typically measured in the low-to-mid single digits, when they allocate them at all – versus average allocations of 26% for pensions and 51% for endowments. Investment flows over the last several years demonstrate that this gap is just starting to narrow, and I see ample reason to expect the trend to continue.

Carte blanche

Photo

Anthony Dehez (archives)

Sustainable finance is a complete mindset shift identified within the framework of the SustaiAsset managers are playing an active role in the sustainable transition of the economy; nable Development Goals, and paves a path to a recent study commissioned by ALFI found new investment strategies and products. H ­ owever, that net assets in sustainable fund products the industry needs to develop tools to undersmore than doubled since 2018. tand and measure the value we seek through Investors are behind this increase in sustai- such investments, as it is imperative that issues nable investing, but much of the growth is ins- such as climate change and social inequalities affect investment portfolios. Asset managers pired by the EU’s leadership role in addressing are required to prepare, use, and disclose non-­ climate change, through its European Green Deal. The EU’s promises can only be met by a financial information in line with the new regusubstantial increase in private investment in lation leading to both clarity and complexity. companies that contribute directly to climate Those who manage this process well should solutions, but we also need investment that sup- enjoy a competitive advantage.

The growing demand for the Luxflag label ports mainstream companies in making a transition to cleaner energy and industry and to a affirms its relevance to investors while highlighting the sustainability credentials of the undermore sustainable economy. We must remember lying investment products, and we expect this this is a transition, albeit a transition at hyper speed, given the urgency of limiting global tem- trend to continue, particularly with the application of SFDR. In fact, looking forward, SFDR perature increase in this century to 2 degrees. will be the baseline – now required for EU sustainable finance legislation a Luxflag label – and a label will such as the Sustainable Finance mean something more.

Disclosure Regulation (SFDR) aims at reorienting capital Finally, I would like to take this opportunity to pay triflows to sustainable finance and to foster long-termism DENISE VOSS bute to my colleague, Sachin Chairwoman Vankalas, Luxflag’s general and transparency. We now Luxflag manager, who tragically understand that sustainable passed away from Covid-19. finance is not just another “The industry needs type of investment. It’s a Sachin was universally recoto develop tools complete mindset shift. gnised for his expertise and to understand Financial market participioneering leadership in pants need to be aware of responsible investment. and measure We’ve lost a great champion their own contributions to the value we seek of sustainable finance and a sustainable future through a great human being. their investments. This leads through such to more investment opporinvestments.” tunities in ESG but also those Author DENISE VOSS Les cartes blanches sont à retrouver en intégralité sur paperjam.lu.

Carte blanche

ALFI 2021

60

Photo

The fund industry in China is relatively young, ming, potentially posing threats to the banks.

We expect digitalisation will continue, and the about 20 years, while the European markets have a much longer history and are well struc- competition between online platforms and banks will be fiercer. Online ­portals are highly possible tured. That being said, the significant growth in assets under management (AUM) and rapid to take up increasing market shares. Foreign industry development provide huge opportu- managers thus need to formulate their distribution strategy, perhaps taking advantage of both nities for international players to tap into the growth opportunities. traditional and emerging channels, to maximise The surge in middle-class numbers and the their fund exposure. low fund penetration rate in the country are the In terms of business opportunities, we should catalysts for the positive outlook. The middle- not ignore the cross-border initiatives, such as class households are highly after investment the Wealth Connect scheme in the Greater Bay diversification and capital appreciation, rende- Area, between Hong Kong and the mainland ring large, exciting market opportunities.

China. The integration between two locations is Having said that, the fund market in China getting closer, fostered by the supportive policies is still in the development stage. Retail inves- to facilitate bilateral, cross-border capital flows. tors are relatively inexperienced and tend to be We expect the product suite a ­ vailable in the main­speculative. Traditionally, they used to put their land will be enriched with the addition of a variety savings in banks or invest in properties, of offshore. When devising the China’s which are perceived to be “safe”. strategy, Hong Kong is definitely an Thanks to the rapid economic ­essential factor to consider.

All in all, foreign fund m ­ a­deve­lopment and capital ­market na­gers should seize the opporreforms, they are becoming more open and willing to tap into a tunity and showcase their experELEANOR WAN wide range of financial proCEO tise in managing funds that are BEA Union Investment ducts and investment concepts, investing in global ­markets or Management Limited although their investment expeparticular sectors or asset clas­ rience is limited. Nevertheless, “In terms ses, which can help domestic investors are searching for investors to diversify risks. We of business investment ­products with high believe, with a well-planned opportunities, strategy, it is a good time for returns in renminbi terms. foreign fund managers to China’s distribution chanwe should not explore opportunities in this nels are diversified. Traditioignore the compelling market. nally, banks are the key distri­bution channels for mutual cross-border funds. ­However, in recent years, initiatives.” online channels have been booAuthor ELEANOR WAN

BEA Union Investment Management Limited

Fund distribution in China: challenges and opportunities

Carte blanche

Supervisory convergence and the single rulebook In spring 2021, the European Commission (EC) launched a targeted consultation on supervisory convergence and the single rulebook for the European Supervisory Authorities. The European Securities and Markets Authority (ESMA) filed an insightful response to the consultation in May 2021.

What are the key considerations for the fund industry?

Photo

EY Luxembourg

Background European legislation has been dominated by directives, which are useful as they cater for differences in legal systems across EU member states.

However, flexibility in the application of directives can result in divergences in national rules and open up the risk of regulatory arbitrage. The single rulebook thus aims to provide a unified regulatory framework for EU institutions.

The European Supervisory Authorities’ (ESAs) founding regulations were reviewed and amended in 2019 and 2020 respectively, yet the Covid-19 pandemic and Brexit have since dramatically altered the financial landscape. In this context, the Capital Markets Union Action Plan (2020) requires the EC to review the framework and take steps towards convergence by Q4 2021.

Expanding the toolkit The effectiveness and scope of the existing supervisory toolkit were discussed. While common supervisory actions and peer reviews were positively received, ESMA rated the new processes for Q&As and no-action letters as not fit for purpose.

Increasing direct supervisory powers Most asset managers are already regulated at an EU level by the UCITS or AIFM directives, however, ESMA made the case that direct supervision could help mitigate the regulatory arbitrage associated with extensive use of cross-border delegation. Another strong proposal is to have ESMA act as a gatekeeper to the EU market, in particular vis-à-vis non-EU entities servicing the market.

However, it must be noted that granting additional supervisory powers to the ESAs may spark conflicts with the national competent authorities, which are already well-established in supervising asset managers in their jurisdictions, due to their knowledge of and proximity to local markets.

Applying flexibility The ESAs are often not given enough time to consult on technical matters, resulting in level 2 and 3 outputs that are rushed. Adjusting the timelines, granularity and sequencing of changes would allow the ESAs to provide more appropriate responses for asset managers.

What’s next?

As the ESAs’ regulations were updated in the recent past, any assessments of, or changes to, CHRISTOPHE WINTGENS the framework may be too soon.

Assurance partner, It remains that the path to wealth & asset management leader EY Luxembourg convergence is expected to be winding, in particular where “The path reforms would meddle in natioto convergence nal prerogatives.

is expected to be winding.”

Les cartes blanches sont à retrouver en intégralité sur paperjam.lu.

Author CHRISTOPHE WINTGENS

Carte blanche

172 5%

10% 16%

20%

2018

2019

14%

13%

38%

37%

2020

H1 2021

+510%

DR CARSTEN WITTROCK Partner zeb

EU27 and Switzerland, Norway, UK, Liechtenstein 2 For 2021 as of the end of June 1

ALFI 2021

62

zeb Source

NET FUND FLOWS IN EUR BN EUROPE1, EOY2 Sustainable funds – active strategies Sustainable funds – passive strategies 463 Conventional funds 414 375

48% for conventional funds, supporting the general perception that equity investments allow asset managers to exert a greater influence on the ESG efforts of companies. Nevertheless, the integration of ESG factors is becoming more important also in other asset classes, particularly in fixed income, with a share of ~23% in sustainable assets and strong inflows in the last three years.

The majority of sustainable investment funds are actively managed. Even though it is argued that active management is in a stronger position to influence the ESG profile of companies, passive sustainable investment funds are also seeing strong growth rates in the last three years.

Meanwhile, they represent 17% of the total sustainable fund sector. The share of net assets of more ambitious sustainability strategies, namely impact funds, is still limited, but increasing. Whereas at the end of 2020 it accounted for just 1% of the total assets, it now reaches already 2%, indicating that investors are increasingly looking for more ambitious investment strategies.

While the numerous EU-wide regulatory initiatives contribute to a more standardised and monitored sustainable finance marketplace, asset managers face numerous challenges during the transition process – a key issue being the definition and implementation of the ambition level in terms of sustainability in an environment where homogenous and consistent ESG related data on corporate or investment object level are not yet or only partially available.

Photo

The net assets in open-end and exchange-traded sustainable funds domiciled in Europe have increased fivefold since 2018 with Luxembourg being the most important fund hub as shown in the European Sustainable Investment Study 2021 of zeb and Morningstar, commissioned by ALFI. At the end of June 2021, sustainable fund net assets accounted for 18% of all European net assets, up from 5% in 2018. The growing interest in this sector is also reflected by the net fund flows in 2020, where the demand for sustainable funds exceeded the one for conventional funds for the first time. These figures, based on the rather strict definition of sustainability applied by Morningstar, conflict with a share of 33% of net assets being classified as Article 8 or 9 funds according to the SFDR, which shows that asset managers make use of the broad scope of interpretation of what qualifies a fund as sustainable – with their market position and distribution efforts in mind.

Equity is by far the most important asset class of sustainable funds with a share of more than 57% of net sustainable assets compared to only

Morningstar

The state of sustainable funds in Europe

Keytrade Investment Day

T U E S DAY

While it is rare to meet the strategists of investment funds in Luxembourg, this exceptional afternoon offers the opportunity to discover the convictions, values and strategies that govern the funds presented to the public during this event.

Fund managers will welcome you in the afternoon and will be available for personalised meetings and debates during two sessions of three round tables, and will present an exclusive 10�6 Keytrade Bank Luxembourg in the evening. A unique opportunity to prepare your next investment decisions.

With the participation, among others, of: Amundi Asset Management AXA Investment Managers Columbia Threadneedle DNCA Finance Luxembourg La Financière de l’Echiquier M&G Investments Pictet Asset Management Jupiter Asset Management

REGISTRATION REQUIRED ON CLUB.PAPERJAM.LU

09 N OV E M B E R

15:30 VENUE ECCL - Hémicycle 1 rue du Fort Thüngen, 1499 LuxembourgKirchberg

The Broadridge Distribution Achievement Awards recognise outstanding performance in the fund distribution industry The annual awards return for the fifth year, with major names in new and returning categories.

Awards

The Broadridge Distribution Achievement Awards recognise the achievements and innovation of marketing, sales and client service teams in the European fund distribution market. Founded to celebrate excellence in various aspects of fund distribution, this year, the Broadridge Distribution Achievement Awards honour some of the industry’s biggest players and market leaders.

Nominees for the four award categories are based on responses from over 800 of Europe’s leading third-party fund selectors from B ­ road­ridge’s Fund Buyer Focus interviews conducted in the 12-month period to June 2021. The interviews seek to pinpoint the changing demands of Europe’s key fund distribution influencers and to identify the fund providers that are delivering best-in-class standards. These fund selectors represent around €3trn of third-party client assets in Europe and, when taken together, provide a representative voice of investors in the ten markets they serve.

Each of the four awards is split into two classes – the Overall Winner category, for large firms with established offerings, and the Fastest Riser category, for upcoming leaders in the space or for firms introducing new products in the relevant category for the first time.

The fifth annual awards will once again be hosted virtually this year, with the nominees and winners announced via video.

ALFI 2021

64

THE FOUR CATEGORIES ARE AS FOLLOWS : SALES SERVICES AWARD This award recognises achievement intechnical expertise, responsiveness, and a clear understanding of individual business and clients’ needs.

ESG/SOCIALLY RESPONSIBLE INVESTING AWARD This award focuses on the growing world of ESG and socially responsible investing and is awarded to firms with strong and authentic credentials in this space.

BRAND AWARD The Brand Award acknowledges firms that ­consolidate their multifaceted services in a cohesive way, showing clear conviction and purpose.

INNOVATION & ADAPTATION TO CHANGE AWARD This new category recognises the outstanding achievement of asset managers who have risen to new challenges and pioneered innovative solutions to an evolving marketplace.

AIDAN PATERSON Broadridge

www.delano.lu Since 2011

Luxembourg in English SUBSCRIBE FOR FREE while working from home

Agenda TUESDAY 21 SEPTEMBER 08:30

ALFI welcome address

09:05

Corinne Lamesch Chairperson, Association of Luxembourg Fund Industry (ALFI) 08:35

Leveraging on the Sustainable Investment Fund Study 2021 commissioned by ALFI, Hortense Bioy, global head of sustainability research, Morningstar, and Arnd Hesseler, ­executive manager and head of Luxembourg office, zeb, will give an overview of the current landscape of sustainable funds across Europe.

How have asset managers positioned themselves in categorising their funds in article 6, 8 or 9? What is the appetite of end-investors and distributors for sustainable funds? Which asset classes and which strategies are most successful? Hear from two leading experts in the field.

Opening by the chairperson of the day Valeria Merkel Partner, KPMG

08:40

In conversation with Howard Marks

Oaktree is a leading investment management firm managing more than $150 billion in assets.

Since the formation of Oaktree in 1995, Mr. Marks has been responsible for ensuring the firm’s adherence to its core investment philosophy; communicating closely with clients concerning products and strategies; and contributing his experience to big-picture decisions relating to investments and corpo­rate direction. Howard is well known to the investor community for his “memos” toclients. Warren Buffett once said: “When I see memos from Howard Marks in my mail, they’re the first thing I open and read. I always learn something.”

Hortense Bioy Global head of sustainability research, Morningstar Arnd Heßeler Executive manager and head of Luxembourg office, zeb 09:20

Howard Marks Co-chairman & co-founder, Oaktree Capital Management, L.P.

Distributing ESG and impact investment solutions: do old recipes still work?

What does it take to successfully distribute an ESG or an impact investment product?

How do you stand out in an ever growing crowd of such products? And if such invest-

INTERVIEWED BY:

Jérôme Wigny Partner, Elvinger Hoss Prussen

Alfi 2021

Sustainable Investment Funds in Europe – Latest trends and market developments

66

Hamish Forsyth President – Europe & Asia, Capital Group

ments are favoured by younger investors, can you simply use the same distribution channels? During an interactive panel discussion, we will propose answers to these questions and many more, taking into consideration the latest trends and innovations observed.

Dan Rudd Head of external wholesale UK, Ireland & Middle East, HSBC Global Asset Management (UK) Limited

MODERATOR:

Steven Libby Asset & Wealth management (“AWM”) EMEA leader, partner, PwC PANELLISTS:

Stéphane Corsaletti Chief investment officer, Allfunds Campbell Fleming Chairman and director, The Big Exchange Micaela Forelli Managing director Europe | Distribution director, M&G International Investments S.A. 10:10

Broadridge Distribution Achievement Awards 2021

10:15

Hot Topics from the Sharp End of Distribution

What’s happening in the real world of ­gathering and retaining investor capital into a Luxembourg cross border fund? Are Luxembourg funds still sold successfully into the UK post Brexit? Can Asset Managers still base their European sales teams in the UK? What are the biggest practical hurdles to successful cross border distribution in Europe and beyond? If a KIID were designed by an Asset Manager what would it look like, and how would an Asset Manager “inform” investors?

Hear from two seasoned and senior Asset Manager executives in conversation, as they share their anecdotes, tactics and strategy from the sharp end of distribution.

10:30

Private Debt Funds: the Who, the Why and the How of Fundraising in Europe

This panel will discuss the current trends in fundraising for private debt funds, from both a GP and LP perspective. Private debt has been growing fast in the last few years, in particular due to the attractiveness of the asset class for insurance companies and other institutional investors. Our panellists will share their views on the driving forces behind the European private debt funds market, opportunities for growth and the products that will be coming to the market tomorrow.

MODERATOR:

Nicolas Bouveret Partner, Arendt & Medernach PANELLISTS:

Marco Verheijen Senior investment manager Private & Public Markets, Athora Alex Walker Managing director, Alcentra 11:00 Retailisation of

private assets

Without any doubt, private assets including private equity and venture capital, real estate, infrastructure, private debt have grown to a significant asset class within the fund industry.

So far, access to this asset class was granted mainly to the large institutional investors.

As an appealing alternative and possibility

The planning of the conference may be subject to modification.

for diversification, retail investors increasingly become attracted to such alternative funds.

But are they fully aware of the differences and constraints compared to a UCITS? How does the industry adapt to this new dimension?

What are the opportunities and the challenges? Will it be the revival of the ELTIF or are there other possibilities? Listen to our experts sharing their experiences and views.

Martin Vogel CEO Europe, Waystone Markus Pimpl Managing director, distribution partners and liquid private, Partners Group

MODERATOR:

Vanessa Camilleri Head of office, member of Management, Partners Group (Luxembourg) S.A.

12:20

PANELLISTS:

Our working environment has changed dramatically over the last 18 months.

Undoubtedly, the management style needs to adjust to new challenges we have been facing within the virtual teams. During the panel discussion, we will explore the multiple facets of inclusion and diversity and how the latter in all forms is embraced, acknowledged and developed within a continued virtual working environment. Our speakers will share their experience on how the companies create an inclusive environment where employees feel comfortable, supported and respected in bringing their ‘whole self’ to work. We will also hear insightful suggestions and practical tips on how to identify, nurture, encourage and promote diverse talents.

Enhancing and developing inclusion & diversity in a virtual work environment.

Frederik Meheus Managing director, Moonfare GmbH Leon Volchyok Managing director – Real Estate, The Blackstone Group 11:30

Broadridge Distribution Achievement Awards 2021

11:35

Masterclass facilitated

by UBS

Will ELTIFs awake from their state of “sleeping beauty”?

MODERATOR:

Samantha Kemsley Global delivery EMEA CAO & chair of inclusion & diversity, State Street Luxembourg

Until now the ELTIF regime has not led to the expected success. What is needed to boost such structures and will the amendments under discussion close the existing gaps for an attractive solution allowing a certain “democratisation of private assets”?

PANELLISTS:

Bill Gourlay Managing director, Independent Consultants Network

MODERATOR:

Francesca Prym CEO, UBS Fund Management

Joseph E. Hendry Managing director, Brown Brothers Harriman (Luxembourg) S.C.A.

PANELLISTS:

Alan Picone Partner, KPMG

Alfi 2021

Masterclass facilitated

by State Street

68

Isabelle Lebbe Partner investment management, Arendt & Medernach Devvya Sharma EMEA diversity & inclusion manager, Invesco

including derivatives, Star market), and at the continued success of the Connect schemes.

To conclude, we will discuss how UCITS can best use the various access routes.

Gary O’Brien Head of banks and brokers segment strategy, BNP Paribas Securities Services

13:05 Session facilitated by

BNP Paribas Securities Services: Why and How to invest in China

From the recent tech crackdown through to trade wars and currency fluctuations, we will open with a macroeconomic overview of the Chinese market. We will then look at how the direct route into China has evolved (QFII/RQFI, CIBM and the growth of investment eligibility

Jacqueline Rong Deputy chief economist, China, BNP Paribas 17:30 Cocktail hosted by KPMG 19:00 In-person format – for conference participants only

WEDNESDAY 22 SEPTEMBER Morning sessions 08:30

ALFI welcome address Camille Thommes Director general, Association of Luxembourg Fund Industry (ALFI)

08:35

Carne, for some bold, innovative thinking on the future of fund distribution. The emphasis will be on opinions on what such distribution may look like in a few years’ time, enabled by new technology.

Chris Chancellor CFA, senior director, Global Insights, Broadridge

Opening by the Chairperson of the day Bettina Graeber Senior vice-president, Pictet & Cie (Europe) S.A.

08:40

Reimagining fund distribution

If the fund industry were to start from scratch again today, what would fund distribution look like? Can technology or new entrants transform the economics and effectiveness of fund distribution? Listen to the views of Chris Chancellor, Broadridge and John Herlihy,

John Herlihy Chairman, Carne 09:10

How can the Luxembourg

eco-system support fund distribution?

How to enhance and facilitate fund distribution in addressing the challenges of the industry seeing a constant cost increase for years?

Four stakeholders of the fund distribution eco-system will share their plan to add value

The planning of the conference may be subject to modification.

to their clients in asset gathering and retention: are digitalisation and blockchain the answers to reduce and limit costs? What are the solutions to allow an immediate and direct access to a global fund universe for investors?

be explored by two founders leading organisations seeking to reimagine financial services for tomorrow’s investor.

Michael Schweikart Co-founder, Tomorrow

MODERATOR :

Said Fihri Partner, KPMG 10:25

PANELLISTS :

Paul Carr CEO, East Capital Asset Management S.A.

This panel will cover the latest regulatory developments triggered by the EU CrossBorder Directive 2019/1160 that entered into force on 2 August 2021. The objective of the Directive is to facilitate the cross-border distribution of UCITS and AIFs across EU Member States by (i) removing local goldplating requirements, (ii) harmonizing UCITS and AIFs notification procedure, (iii) reducing costs and (iv) enhancing investors’ protection. This panel will take stock of the situation two months after the implementation in debating the following hot topics:

Virginie Loisel Managing director, MFEX Luxembourg S.A. Carole Michel Fund distribution global product owner, BNP Paribas Securities Services Olivier Portenseigne CEO, FundsDLT

Did the fund distribution landscape experience a “big bang” as of 2 August 2021?

09:55 Broadridge

Distribution Achievement Awards 2021s

I s the fund industry in the process of reshaping its set-up in target distribution markets? ill there be a point in time when the local W facilities available to investors will be equal?

10:00 The digital client:

a new era of self-directed retail investors

hat are the main improvements W of the concept of pre-marketing?

Where do you go to reach first-time investors?

During the pandemic, online trading apps like Trade Republic reported rapid growth in firsttime users flocking to the platforms to grow their wealth. A new generation of investors don’t look to banks or advisers to tell them what to invest in: they have the confidence to choose themselves. Is it time to say goodbye to the traditional distribution model? Could the asset management industry piggy-back on this trend? These and other questions will

Alfi 2021

Impacts of regulatory developments on cross-border distribution

ow far will de-notification of marketing H prevent future transactions? hat are the operational challenges W accompanying the latest regulatory developments?

MODERATOR :

Guillaume Scaffe Director - Financial Industry Solutions, Deloitte Luxembourg

70

PANELLISTS :

PANELLISTS :

Selma Coffey Head of distribution services, Waystone

Jean-François Bay Managing director, Quantalys Rory Herbert Head of registrations, Allianz Global Investors

Willi Müller Head of portfolio management, Union Investment Luxembourg S.A. 10:45

10:50

Sandra Lucente CEO, Apis AM

Broadridge Distribution Achievement Awards 2021 Masterclass facilitated

by Fundsquare The importance of governance in efficient data management

We all want to know where our data are being stored and used. Without data being effectively managed, companies lose out on their competitive edge and expose themselves to tremendous risks. For data to truly support business initiatives, they need to be qualified, available, up-to-date as well as relevant.

Regulatory disclosure and information dissemination of dynamic, static data and documents are not only time-sensitive but require security and accuracy to respect compliancy and regulations within the fund industry.

An aggregated view of the fund life cycle and its data within this industry calls for effective corporate governance to reduce the opacity of operations and allow for the mitigation of risk.

A breach in data management has implications that go beyond simple business processes but can have serious legal consequences.

How to achieve this governance in efficient data management is a question that Fundsquare will approach in our Masterclass.

Franck Willaime Certified Independent director 11:35 Masterclass facilitated

by Linklaters

What are fund investors expecting?

How green are fund products today? How far is the implementation of SFDR and Taxonomy?

This and much more will be discussed by Anja Gräf and Martin Mager.

Anja Gräf Global head of infrastructure and impact funds, product specialists, HSBC Asset Management Martin Mager Partner, Linklaters 12:20 Chairperson’s wrap up

MODERATOR :

Vincent Lagrange Senior business & Relationship ­development manager, Fundsquare

The planning of the conference may be subject to modification.

of the morning sessions

Afternoon sessions 13:25

Chairperson’s introduction

13:30

“What’s hot” in APAC and the US?

view Asia as one big growth story, but such an approach is unlikely to be a winning strategy. At the ALFI Global Distribution Conference, we’ll be exploring what success in the Asian markets looks like, talking with practitioners and experts about China, the alternative investment landscape and the distribution of traditional funds in this exciting region.

A traditional round of discussions on “what’s hot” in the asset management and fund industry in APAC and the US. The session is moderated by Camille Thommes, director general of ALFI, with Sally Wong, CEO of the Hong Kong Investment Funds Association and Jim Fitzpatrick, President and CEO of Nicsa.

MODERATOR:

Andrew Gordon Managing director, Asia, RBC Investor & Treasury Services

Jim Fitzpatrick President & CEO, Nicsa

PANELLISTS:

Andrew Hendry Head of distribution – Asia Pacific, Aberdeen Standard Investments

Sally Wong CEO, Hong Kong Investment Funds Association (HKIFA)

Richard Surrency Head of private Markets & Alternatives, APAC, Franklin Templeton

Camille Thommes Director general, ALFI

Eleanor Wan CEO, BEA Union Investment Management Limited

14:00 – 14:45 parallel workshop

Asia: A bourgeoning – sometimes challenging – market

Finding joy in Latin America.

LatAm is home to 652 million people (67% being economically active) and, combined, its economies would be the 3rd largest “country” in the world with a GDP of $4.8 trillion (2020) and more recently Latin America has gained pace of venture activity. Investors rang up a record number of 488 deals in 2020 while pouring more than $4 billion into start-ups for a second-consecutive year.

On the investor front, LatAm private and institutional investors hold as of today ~ $3 trillion in Assets. By 2025 it is estimated that its clients’ investments will soar up to $5 trillion. An entire new generation of millions of eager digital (native) investors combined to the upsurge of gross national income and

Recent economic growth and wealth creation in Asia has been nothing short of extraordinary at almost every level of the financial system, including the retail, mass affluent, high net worth and institutional sectors. The region still holds significant potential for asset managers – both traditional and alternative managers – and many firms are looking to participate in this exciting market. While the opportunities are plentiful, Asia also poses a number of challenges for managers. The region includes a variety of distinctive cultures, languages and markets that are in various stages of evolution. It is tempting for managers to

Alfi 2021

72

the seamless investment experience offered

by LatAm based Asset Managers are some of the factors forging the new Asset Management scene in Latin America.

Is a $4.8 trillion economy with $3 trillion of AuM part of your plans?

Join us to listen to what key successful market practitioners covering Latin America have to say.

MODERATOR:

Steve Bernat Founding partner, ONE group solutions PANELLISTS:

Didier Delvaux Country head Luxembourg, U.S. Bank

Isabella Nunes Head of sales Brazil, J.P. Morgan Asset Management Gyorgy Varga Founding partner, Quantum Finance MODERATOR:

Cun Yu (Jack) Wang Fund manager, Infrastructure Investment Dept. Asset Management One Alternative Investments Ltd. 14:45

Workshops wrap-up

Jefferson de L. Matias Oliveira Asset & Wealth management director, PwC

Steve Bernat Founding partner, ONE group solutions

PANELLISTS:

Jefferson de L. Matias Oliveira Asset & Wealth management director, PwC Luxembourg

Jorge Aguiló Partner and country head, Compass Group USA

Andrew Gordon Managing director, Asia, RBC Investor & Treasury Services

Carlos Rodriguez de Robles Arienza Deputy CEO, Caceis

A case study: Luxembourg, your domicile of choice

14:50

One would think that most players in the asset management industry are active in Europe’s largest fund domicile already. However, every year, we see asset managers from around the world launching their first fund in Luxem­ bourg. And also new service providers keep entering this dynamic market still.

Why have they chosen Luxembourg over other jurisdictions? Are they outsourcing to the Luxembourg eco-system or do they set up their own office? How easy or difficult is it to find staff? And what is their experience dealing with the Luxembourg regulator?

These and other questions will be discussed with newcomers to Luxembourg.

The planning of the conference may be subject to modification.

Chairperson’s wrap-up and closing remarks

Forecast

Quels grands rendez-vous pour les fonds en 2022 ?

ALFI 2021

Enfin, comme troisième rendez-vous, je citerais l’un des événements de Luxembourg for Finance : le Sustainable Finance Forum. La conférence, qui se tiendra au mois d’octobre, est aussi un rendez-vous important pour l’industrie des fonds.

Toutefois, durant cet événement, je ne serai pas présent physiquement puisque nous avons décidé, à l’avenir, de n’organiser que des conférences digitales.

Pourquoi ce choix ? Parce que nous avons constaté, durant la crise, qu’organiser ces rendez-vous de manière digitale nous permettait d’atteindre une audience beaucoup plus large, plus senior, et tout cela pour une fraction du prix des autres années. Trois arguments imparables.

Toutefois, nous sommes bien conscients que ce genre de rendez-vous est une opportunité unique pour les participants de rencontrer d’autres professionnels et d’échanger avec eux.

C’est pourquoi, en plus de la conférence digitale, nous travaillons actuellement sur un rendez-vous physique, qui permettra aux acteurs de réseauter.

Et c’est un événement auquel je participerai, évidemment.

Auteur A.B.

74

Photo

Les grands rendez-vous sont l’occasion idéale de promouvoir le Luxembourg, son industrie des fonds reconnue à travers le monde entier, et de tisser des liens avec de nombreux acteurs de la finance mondiale.

Si je ne devais citer que trois événements, je parlerais en premier lieu de la conférence de printemps de l’ALFI, l’European Asset Management Conference, qui se tiendra les 22 et 23 mars 2022 à l’European Convention Center Luxembourg. Il s’agit du grand rendez-vous de l’industrie européenne de l’asset management. C’est un événement phare de l’ALFI et, comme chaque année ou presque, j’y assisterai.

Ensuite, je participerai à l’European Funds Trophy, dans les prestigieux locaux de l’Automobile Club de France, place de la Concorde, à Paris. Il s’agit d’un événement qui récompense les meilleurs fonds et sociétés de gestion en Europe dans diverses catégories. Cette cérémonie se déroule généralement entre février et mars. Cette année, en raison du contexte sanitaire, l’événement s’était déroulé virtuellement, mais, pour 2022, nous espérons pouvoir y assister physiquement.

Jan Hanrion (archives)

Nicolas Mackel, CEO de Luxembourg for Finance, assurera la promotion du pays à travers de nombreux grands rendez-vous, en physique comme en digital.

pwc.lu/awm

Asset & Wealth Management from a different angle

© Jim Clemes Associates

Sustainable Finance: Seize the opportunity to grow your business

#FinanceInFineHands

Oliver Weber, Asset and Wealth Management Leader +352 49 48 48 3175 | oliver.weber@pwc.com

© 2021 PricewaterhouseCoopers, Société coopérative. All rights reserved.

In this document, “PwC” or “PwC Luxembourg” refers to PricewaterhouseCoopers which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. PwC IL cannot be held liable in any way for the acts or omissions of its member firms.

The changing face of Emerging Markets What 35 years of emerging markets experience teaches us about their future.

Capital Group created the world’s first emerging markets fund in 1986 and founded the MSCI Emerging Markets Index1 the following year. Our unique experience and deep fundamental research has surfaced 10 trends that are shaping the future of emerging markets.

Find out more at capitalgroup.com/lu/en

FOR PROFESSIONAL INVESTORS ONLY This material is a marketing communication MSCI indices are now maintained by MSCI, Inc. This material is issued by Capital International Management Company Sàrl (“CIMC”). © 2021 Capital Group. All rights reserved.

1