Delano July 2022

No. 91

JULY 2022

Luxembourg in English

Stéphanie Zimmer: Ambitions for organic farming The IBLA competence centre director on the science, vision and conviction required for a circular approach to sustainable agriculture

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Editorial #MunicipalElections

TIONS 2

A week is a long time in politics. The saying, generally attributed to UK prime minister Harold Wilson as his country lurched from political crisis to crisis in the 1960s and early 1970s, is as apt as ever in these uncertain times.

So it seems a bit odd to be talking about the next local elections a full year ahead of the polls on 11 June 2023. But, for the first time in the grand duchy’s recent history, those elections will be open to practically every resident. Legislation to do away with the current 5-year residency requirements for non-nationals to vote in the municipal elections is likely to be passed before the summer recess. One of the features of the new law will also be a reduction in the deadline to register to vote under the new law, from 87 days before the election to 55.

Will this new legislation make a difference and encourage more non-Luxembourgers to vote? We would like to think so. At the last local elections in 2017, just under 23% of eligible foreigners registered to vote-an improvement on the 17% in 2011, but still hugely disappointing when so much is at stake.

The non-Luxembourg vote could, after all, make a significant impact on the outcome of these elections, particularly in some municipalities like the capital city where they account for around 70% of the population.

Several factors play into this reluctance to register to vote. For one, it is anathema to many foreigners that voting is compulsory once registered. Something about being obliged to go to the polls seems undemocratic for anyone who views voting as a civil right rather than a civic duty.

Truth be told, it is easy to apply for a postal vote, and even if you miss casting your vote, nothing official happens--the last time someone was fined for not voting was in the 1960s.

Non-Luxembourgers who have little or no knowledge of the local language or French may also argue that they do not have a good enough insight into the issues at stake or the policies of the different parties. But with a plethora of English-language media covering local politics--Delano is running a series in its magazine and on its website right up until the elections--that argument also seems spurious.

And many local parties in the larger municipalities are also making an effort to publish information in English.

And, as we have indicated above, foreigners can make an impact, so any argument that “my vote won’t make a difference” is also null and void. What’s more, the issues at stake that directly affect non-Luxembourgers include primary schooling and childcare, housing, integration, local transport and some road infrastructure, sports and leisure facilities, water supply and some energy policy.

So we can only encourage our readers who have not done so to visit www.icanvote.lu, register and use that vote wisely--you really could make a change.

Editor-in-chief, Delano digital DUNCAN ROBERTS

JULY 2022

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Contents July 2022

Ristretto

30 Business report

CLAIRE LIGNIÈRES-COUNATHE

“We are partners who trust each other”

38 Head to head NICOLAS VAN ELSUÉ VS CORINNE CAHEN

–

LGBTIQ: legislation and reality

08 #BUSINESS - CLAUDE FOLSCHETTE

–

10 #FINANCE - MARIA LÖWENBRÜCK

“Germany will be an engine for the next years” –

12 #CULTURE - JOHN RECH

“I think we were the first town to commit 10% of its budget to culture”

p. 16

40 Essay

IBLA director Stéphanie Zimmer shares her vision of organic agriculture and viticulture

No post-Brexit boomerang, for now

14 Dashboard

Tourism, inbound and outbound Conversations

16 BUSINESS - STÉPHANIE ZIMMER

“ We can feed the world, not only Europe, organically”

44 Gusto

With love from Africa!

46 Business club 50 Pick’n’mix

Celebrating national day

–

22 CULTURE - SEBASTIAN REDDEKER

Photos

Guy Wolff, Illustration

Salomé Jottreau

“Ask yourself what kind of tourism you would like to return to”

p. 22 Luxembourg for Tourism’s Sebastian Reddeker on the return of holiday business

p. 40 Is the UK regaining competitiveness as a financial jurisdiction?

JULY 2022

Private equity

06 # POLITICS -

“Not a lot of companies are doing SEO”

5

Ristretto #Politics

JULY 2022

6

“We are partners who trust each other” French ambassador Claire Lignières-Counathe discusses France’s EU council presidency as it comes to a close and what’s changing after the recent elections.

Emmanuel Macron was re-elected president on 24 April. What does this mean for your work at the embassy? I imagine there’s a sense of continuity.

He’s a president we’re familiar with. There is no direct change in the work at our embassy.

Still, the president himself has said that he is starting a new mandate, so there will be decisions and avenues taken that will have an impact on the work of this embassy and the others.

In what areas has Luxembourg ­supported France during its council presidency?

We don’t agree 100% on everything. That’s normal, but we’re frequently very close, for example when discussing the big priorities, such as the Fit for 55 package and the Carbon Border Adjustment Mechanism. We reached agreement on the Digital Services Act and the Digital Markets Act. For Luxembourg these were also important. On questions of defence and sovereignty, we’re on the same page. But also on social questions, such as the adequate minimum wage, we have the support of Luxembourg. There are many others.

We are partners who trust each other.

France held the EU council presidency for the first half of this year.

To what extent has the war in Ukraine overshadowed the programme?

Our red thread across the presidency has been European sovereignty. What’s happening in Ukraine must prompt us even more than we previously thought to fight for this sovereignty and to ensure that the EU has the tools to be the master of its destiny and choices.

The crisis in Ukraine has also shown us once again how dependent we are on the outside world, especially for energy.

The situation hasn’t diverted us from our priorities but reinforced them.

When it comes to energy independence, there is disagreement between Luxembourg and France on nuclear energy being a solution. Do you see any possibility of compromise on this issue?

There is the taxonomy, which includes energies that are necessary for the green transition. It’s not a French position. It’s the position given by the European Commission after consultation with numerous experts. Luxembourg’s position is different. We agree with Luxembourg and our other European partners that we must also develop renewable energies.

One doesn’t rule out the other. But France has a substantial nuclear park and will invest in this area because we think it’s an energy that we need to decarbonise our economies.

Crises have the potential to create division or unity. During the pandemic, for example, we saw border closures, but also cross-border medical support.

Where does French-Luxembourg friendship stand as this next crisis unfolds?

The European Union is facing a serious crisis. It is just coming out of another crisis-the pandemic. A few years ago, there was the financial crisis. It’s often the opportunity to make progress. Bilateral relations are trusting and very active. We have a discussion forum on cross-border questions, such as transport, healthcare, professional training, police cooperation... The links are close and always getting tighter.

Crises are opportunities to work closely together, says the ambassador

Before the pandemic, however, there were calls

by Metz for Luxembourg to pay compensation for income tax paid by cross-border workers in the grand duchy and not at home…

What we’ve agreed on is a system of co-development and co-financing. We pay together for projects, for example in transport, such as rail. We co-finance projects that are useful for both countries and are linked to this crossborder movement.

Interview CORDULA SCHNUER Photo MATIC ZORMAN

Ristretto #Business

JULY 2022

8

“Not a lot of companies are doing SEO” Apart Design Studio managing partner and digital art director, Claude Folschette says a holistic search engine optimisation (SEO) strategy can be a game changer to improve company rankings.

What makes a good SEO strategy?

On the technical side, a lot is related to the structure of your codes and the order of the elements. Your code needs to be readable by search engines--and for this to be good, there are rules to follow. For instance, in HTML5, semantic elements--like ‘article’ or ‘section’--help search engines understand the structure of the webpage. And then there’s everything related to accessibility-for example, screen readers for the blind.

The second part is the content and structure of the site. If you have a website with two or three pages, you can’t rank high because there’s not a lot of content.

How familiar are Luxembourg businesses with SEO? In Luxembourg, a lot of [small] businesses work through word-of-mouth advertising, while bigger companies have an SEO strategy and know the game. The problem is that small businesses don’t need it, or they think they don’t need it, but it’s always good to be better ranked.

Is it better for small businesses to focus on building their brand before adopting an SEO strategy?

Good question. I would say you should do both. If you are a new business in Luxembourg and you have a lot of competition, you should build your SEO if you have the budget. Everyone goes to Google when they don’t know where to go…

For small businesses, SEO is very expensive.

It takes a lot of effort, analysis and time.

You can’t make optimisations, and one week later, everything is fine. It’s an ongoing process.

What’s the secret to ranking high on search engine result pages?

I would say the first thing is security, so a valid hypertext transfer protocol secure [HTTPS] certificate. Also mobile friendliness, and this means that the page speed is good. Then, of course, another important factor is authority.

How long has your website existed? How many other websites are linked to your website?

Backlinks are key, but the links need to be in articles that speak about the same thematic discussed on your website. Google looks at your social networks, and ranking is also dependent on your activity and reach. The advantage in Luxembourg is that not a lot of companies are doing SEO, so it’s not so difficult to rank high.

For companies managing their own SEO with free online tools, what should they keep in mind?

If you want to go further, it’s difficult with these tools because, when it comes to site structure, content or landing pages, the tools can’t tell you what to do.

Google changes its algorithms often.

How do experts keep up?

Yes, they change every week. In France, Germany or other countries, there are digital agencies that do just SEO. That doesn’t exist in Luxembourg. [Our focus is not] only SEO, but we try to follow some rules.

How effective are paid ads compared to organic SEO? One thing is sure, if you pay for visits, you get more visits, and your website ranks a bit higher because it’s more visited and so it’s more popular.

But it’s a healthy combination that is better.

Claude Folschette founded his own agency, I Like, before joining Apart Design Studio in 2012

At what point do companies begin to see a return on their SEO investments?

In three months, you can see some small results, but normally six months is a realistic [average]. What businesses shouldn’t forget is that one optimisation doesn’t make everything fine. Then if there is a lot of competition in your line of business, you need to also monitor your competition and then optimise against them.

Interview ABIGAIL OKORODUS Photo MATIC ZORMAN

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Ristretto #Finance

JULY 2022

10

“Germany will be an engine for the next years” Luxembourg alternative funds have huge potential in Germany, and assets under management for German investors grew over 10% from 2016-2022, says Maria Löwenbrück, vice chair of the Association of Luxembourg Fund Industry (Alfi).

You lead Alfi’s Frankfurt roadshow [taking place on 27 June] working group.

Why are you participating?

Events, like the Frankfurt roadshow, that are organised by Alfi are the perfect opportunity to connect and exchange and to create new opportunities with different stakeholders, especially with investors. That’s my thinking.

I hear this also from other stakeholders.

by institutional investors--73% are institutional and 27% are retail investors. What we will see in the next years is a high demand for private market funds. But when we look at the past, the typical German Spezialfond is not the same as the typical private equity fund in Luxembourg.

The typical German Spezialfond has one client and one investment. It’s not so easy to compare both.

The figure of 4% is special. The Spezialfond is a very domestic product in Germany.... that’s not negative [for Luxembourg].

I think the local expertise in private equity structures and for diverse structuring possibilities that the financial centre offers is not yet fully exploited by German-based firms.

And that is an opportunity from which both markets could strongly benefit. You’ll see that with the Reserved Alternative Investment Fund. Luxembourg mancos and service providers, as well as the regulator, must stay innovative and lean to enable swift implementation of regulatory structures.

A positive example for this is the recent evolution of unregulated alternative funds and the successful introduction of Raif schemes.

Who comes to these roadshows?

That’s a mix of asset managers, service providers, lawyers, big four, but also investors. In the workshops, very often you have German investors investing in Luxembourg fund structures. And this year, we also have some startups on a panel, and I think it’s very important.

We have one panel with the ideas of the younger generation, what the younger generation is thinking about the financial industry and future of the financial industry.

It’s fair to say that Germany is one of the Luxembourg fund sector’s most important markets?

Large German asset managers and third-party mancos [management companies] have recognised the importance of Luxembourg and have implemented branches in Luxembourg over the years. At the end of March, 14.7% of fund initiators originated from a German group.

You gave me some figures indicating that Luxembourg-based Ucits retail funds have represented about 42% of all public market funds distributed in Germany steadily since 2016, with assets under management rising by 60%. At the same time, the share for alternative funds is much lower. Luxembourg funds only have 4% of assets under management in German Spezialfonds (special funds). Why is there such a huge gap between public market and private market funds?

Ucits have been very successful the last five to 10 years.... the German market is dominated

Maria Löwenbrück is managing director of Union Investment Luxembourg

Will Germany remain one of the main engines of Luxembourg’s funds sector?

If you have a look at both countries, they are very close economically and culturally, and Germany has always been a crucial market for Luxembourg’s fund sector. Assets under management for German investors grew by more than 10% from 2016 to 2021, and Germany is the largest investment capital pool invested in the EU.... and the Luxembourg market share of total foreign funds registered for sale in Germany is approximately 55%. It’s a lot.

I think Germany will be an engine for the next years in Ucits, but also in alternatives.

I will say a very clear ‘yes’.

Interview AARON GRUNWALD Photo MATIC ZORMAN

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Ristretto #Culture

JULY 2022

12

“I think we were the first town to commit 10% of its budget to culture” The name of opderschmelz director John Rech is synonymous with music in Dudelange. He talks about the early days of Fête de la Musique and the grand duchy’s music scene, just in time for concert season.

You were at the forefront of introducing Fête de la Musique to Luxembourg.

How was the initial reaction to the event?

Yeah, that was 28 years ago! At the beginning of the 90s, we had a festival called All That Music, here in Dudelange. I’d dreamed of playing on stage in front of the town hall. So with François Olivieri, who was in charge of culture and [later speaker of parliament] Mars di Bartolomeo, who was the president of the cultural commission at that time, we went to see the mayor. The mayor was actually my grandfather, but he always objected to anything related to music coming out of my head. And he turned to Mars and said, ‘If you take responsibility for the kid, give it a try.’

And so we did the first Fête de la Musique.

I seem to remember that there were around 1,200 to 1,500 people for the first edition, which surprised us. And that motivated us to go on. We started with one small stage. But we have grown with our festival--we have added new ideas and improved. We even survived the pandemic, with three nights with just 50 people in 2020. We’re very excited to do this year’s event.

It’s a very hot summer for us in Dudelange.

How has the event in Luxembourg grown, and what cultural impact has it had in the grand duchy?

It wasn’t our intention to be part of the European Fête de la Musique. I was a big fan of Rock um Knuedler, but I didn’t want the event to be called Rock at Dudelange because I wanted the festival to be open to all kinds of music. So, quite naively, I thought calling it Fête de la Musique would allow that to happen.

As you said, other towns started doing the Fête de la Musique as well. I think it’s great because it gives people living in Luxembourg the opportunity to discover their own acts, mostly, but also to start into the summer. Because it’s very often the first festival, more or less.

What is so special about Dudelange that makes it such a creative and passionate city for live music?

One factor is definitely the melting pot here in Dudelange. We have now almost 22,000 people from 106 different nationalities.

When I was a kid and my grandparents worked at the steelworks here, that was the centre of social life in a way. When the steelworks started closing, we had to find not only new economic pillars but also new meeting places. Our political leaders thought culture was the best way to do that. And they supported culture in what was, at that point, an unprecedented way.

I think we were the first town in Luxembourg to commit 10% of its budget to culture. And that has continued--we even exceeded it this year.

And we’ve always had the vision, the strength, the support and the patience to do what we projected in our mind. You know, as well as Fête de la Musique, we’ve had the Zeltik and the jazz programme. I mean, who would have bet on jazz 40 years ago…

Your early band, T42, was among the first from Luxembourg to record professionally and perform internationally. Has the growth of the local music scene and its continued professionalisation surprised you?

I really love watching Luxembourg bands playing at that level. I’m still convinced that some Luxembourg act, sometime soon, will have a major big breakthrough. The quality is fantastic, and the level of craftsmanship and talent is phenomenal. I’m crossing fingers for anyone to break through.

Interview DUNCAN ROBERTS Photo ROMAIN GAMBA John Rech is an established singer-songwriter with his group Dream Catcher

Dashboard

14

JULY 2022

Tourism, inbound and outbound Dutch lead the way

MY TAKE

On the rebound The impact of the covid pandemic on tourism is plain to see in the figures on the right, with total visitors to the grand duchy in 2020 falling by almost 50% compared to 2019. There was some recovery in 2021 as restrictions eased, but 2022 is already looking much better.

According to Statec, visitor numbers for the first three months of the year were up by 67% compared to 2021 and down just 34% against 2019 figures. Overnight stays were also up 41% compared to 2021. “In April, hotel occupancy rate was 65%, which was 142% higher than in 2021 and 17% below 2019,” Luxembourg for Tourism tells Delano. “Prospects for May (67%) and June (68%) are equally positive. Hotel searches have shown an average weekly growth rate of 4% throughout May...” Helped by sunny weather conditions in May, campsites are faring equally well, bookings are 37% higher than for the same month last year (which had already been quite positive) and occupancy was expected to reach 59%.

Visitors from the Netherlands remain by far the tourists who spend the most nights in Luxembourg. They even outnumber total overnight stays by tourists from neighbouring France and Germany combined.

Belgians also enjoy staying in Luxembourg, while visitors from the UK, USA and Italy also provide a good number of tourists.

But overnight stays from China have been in steady decline over the last 10 years.

Source

Netherlands

Statec

China

France

Italy

Germany

USA

Netherlands

UK

Luxembourg

Belgium

Belgium

Words DUNCAN ROBERTS

TYPE OF ACCOMODATION

Camping still popular Camp sites are a big attraction in Luxembourg, accounting for around one-third of overnight stays in Luxembourg in 2019. Fewer than 10% of visitors opt for accommodation that is not a traditional hotel or campsite, which reflects the lack of alternatives such as Airbnb in the grand duchy.

Germany

Statec

Total overnight stays

944

All types of accomodation

France

3m

254.2

1,654.1

2.5m

UK

2,852.3 USA

2m

Italy Hotels and similar establishments Camp sites Other collective accomodation

China

1.5m

20 12 20 13 20 14 20 15 20 16 20 17 20 18 20 19 20 20 20 21

Source

Luxembourg

2012

2013

2014

15

800k

700k

JULY 2022

Luxembourg’s tourism industry has enjoying steady growth for much of the past decade, with the majority of visitors coming from neighbouring countries. And Luxembourg residents are among the most generous when it comes to spending on foreign trips.

As elsewhere, the pandemic had an impact, but slowly the industry is recovering.

HOLIDAY KINGS AND QUEENS

€946

The average amount Luxembourg residents spend per holiday, which is the most in the EU by some distance-second place goes to Malta with an average spend of €696. The residents of Czechia spend the least, at just €160.

Source

600k

500k

Eurostat (figures for 2019)

83%

The percentage of Luxembourgers (aged over 15) that take tourism trips for personal purposes. That is the joint third highest rate in the EU along with Finland, and only just behind 2nd placed Sweden (84.9%) and top ranked the Netherlands (85%).

Source

Eurostat (figures for 2019)

400k

Favourite destinations from Luxembourg airport 300k

200k

Porto has been the most popular destination for airline passengers from Luxembourg since 2016. For the previous four years the top destination was London, which fell out of the top 3 rankings in 2017 (the year after the Brexit vote). Lisbon has been ranked second since 2017, while Munich featured in the top 3 between 2013 and 2018.

Source

Luxairport

2012 Paris

1

Frankfurt 2

2016

3

1

Munich 2

2020

0 2015

2016

2017

2018

2019

2020

2021

Amsterdam 3

Porto 1

Lisbon 2

Shutterstock

London

Porto

Photo

100k

3

London

Stéphanie Zimmer, 16 director of the Institut fir biologësch Landwirtschaft an Agrarkultur Luxemburg (IBLA), has a PhD in agricultural sciences

“We can feed the world, not only Europe, organically”

17

JULY 2022

Conversation Stéphanie Zimmer

With the war in Ukraine, we face not only an energy crisis but also a food crisis. Stéphanie Zimmer, director of the competence centre for organic agriculture and viticulture, IBLA, shares more.

How would you estimate the were many people going back to farm ogy of organic and sustainable farming.

Dissemination forms a huge part also. I appetite for organic and new farming shops, but now it’s going down again. practices from your interactions think we’re the only institute here in Luxwith local industry experts, farmers How is organic agricultural beneficial embourg with research and advisory under and winegrowers? or any different from conventional one roof, and this is important for us Last year, or about a year and a half ago, farming practices? because we have a model of doing research the subsidies for organic farming were Soil fertility is the key element in organic for the farmer and with the farmer. We increased by the government, and then agriculture, which is also based on laws. track the issues farmers need to have we had a lot of demand for our advisors We have EU regulations that are the same addressed--we get to know about this on how to transition. A lot of farmers in every European country on how organic through advisors who are in contact with were interested, and there were a few farming is defined, and the main differ- the farmers--and we try to solve these converting to organic agriculture. But ence is that we do not use synthetic pes- problems in research if we get the right the main concern was the economic sit- ticides or mineral fertilisers, for example. funding. It’s not always so easy, as we are uation--and it’s gotten worse with the Organic farming advocates for a circular a non-profit, and [general] research pri[Ukraine] crisis now. We’re not only in economy, where nutrients are not lost orities aren’t always the same as the needs energy dependency but also food depend- but are put back into the circle, and it’s of the farmers, unfortunately. During ency. The prices are not really great for less cheap for the farmer, but it’s better research activities, we disseminate the organic farming… sometimes, even if [a for the environment. We try to prevent knowledge back to the farmer since we farmer] wants to convert, economically soil from erosion and have less emissions. do our field trials on the farm together speaking, it’s really difficult.

There are also other regulations for ani- with the farmer and have a really close During the pandemic, people bought mal welfare--they have to be able to go collaboration. more organic food but [now], people are outside, which is not the case in tradiconsuming less [organic]. I was talking tional farming. And then, of course, we What are some viticulture projects to two supermarkets: the biggest ones cannot use antibiotics or other medicines IBLA works on? here both said that it’s going down. If in a preventive way. If the cattle are sick, We work with private winegrowers and you look at the total, people spent around we can give medications, but this is [done have an advisor at IBLA for this. We 8% of their budget on food in 2017 [com- in moderation]. worked on a project called CO2MPOSpared to] 1977 when it was around 29%. iTiv in the framework of the project It used to be 19% for housing, and now Research is one of many ways call of the Œuvre Nationale de Secours it’s 37%, so this is a big switch. Before through which IBLA aims to advance Grande-Duchesse Charlotte where we the pandemic, depending on the income sustainable farming practices. analysed the use of grape marc comof the household, it was between 10% to How does this translate on the field? post for high-quality fertiliser. About a 21% spent on organic food and mostly The biggest part now is research, but it month ago, we organised a compost baby food (38%), honey (22%), eggs (20%), started with advisory services for organic workshop to teach farmers, gardeners flour and cereals (15%), milk (12%) and farmers or those who want to transition and private people how to make good vegetables and fruits (10%)1. Again, there or who are interested in the methodol- compost. We are part of the MonESCA

Source: Statec

Photos GUY WOLFF

1

Interview ABIGAIL OKORODUS

Conversation Stéphanie Zimmer

Your family’s farm has been around for over 150 years.

Why did you decide to transition to organic?

We saw that with the conventional system, the [trend] was [only] to get bigger and bigger, and no one wanted this, so we decided to focus more on quality before quantity and made the farm more diverse by investing also in chicken for eggs. We now have more diverse income which, for me, is more stable. We’re learning from year to year, and it’s getting better and better. Organic agriculture is more of a challenge, and this is why I like it.

Since you transitioned to organic, has there been a drop or increase in crop yield?

We have less, but the difference is not as big as people say.

I’d say around 20% less, but it all depends on the soil. We have good soil here in our region, so we can even produce more like conventional farmers… but we don’t use pesticides or fertilisers.

With climate change, are you seeing visible changes as well on your farm?

Yes, clearly. Every year I think of what will happen in two, three, five years, if it continues like this.

project [for monitoring symptoms of esca, a trunk disease] and work mostly on dissemination to the farmer. A lot in wine is done with digital farming, drones, new systems and technologies, and there we have several international research projects. We have a European project just starting with a big consortium on digital farming in wine. We also had another project where we monitored wine diseases and organised workshops on this.

varieties on different sites and then we make recommendations on, let’s say, cereal number one, variety number two that had the highest yields. Then we check also for the ones with the best quality, for example, for bread or potatoes, we check the colour--because people like golden and not white potatoes. We look at the resistance against pests and diseases--in organic, we don’t use pesticides, so you can’t spray if there’s a problem-you need to shade the soil to avoid bad weeds… There are a lot of things we’re looking at, and we make recommendations based on this, and one parameter that’s becoming increasingly important is drought.

The other 80% concerns the management of the farm. You can have the best varieties, but if the management is not good, it’s still not healthy… so there’s a lot of management thinking involved.

With a changing global climate, Europe has also seen more droughts, meaning threats of lesser crop yields.

What’s the situation in Luxembourg, and what can be done to avoid this?

There have been simulations, and I think they’re going even up to 70-75% of yield decrease in the next years because of these long drought periods. It was really dry last time and wasn’t an easy situation.

I think there are two possible ways to Can agriculture be fully organic and reduce it. You can compensate about 20% still meet the consumption needs of by breeding varieties. There’s no metric an increasing EU-27 population, to breed against drought, but you can projected to peak at 449.3m in 2026? select more drought-resistant plants. IBLA At the moment, I know that there are a lot is in charge of the official organic variety of voices saying organic cannot feed the trials, and we are testing different vari- world. We also have this talk of not [fully] eties of different crops (fava beans, peas, organic but some principles for more sussoybeans, potatoes, etc.) and observe tainable agriculture. Now everybody is them for the whole season of at least looking at the Ukraine crisis and links to three years--because one year can be less oil, less wheat and so on. But the probreally dry and another a bit wetter, so we lem is a bit that, again, we’re looking at have to check for an average of at least really short-term solutions, and we’re only three years to give recommendations to looking at one part. the farmers. It’s working fine maybe in There are scientific papers that show France--Alsace or Paris--but doesn’t mean that we can feed the world--not only that it has to be fine here because the Europe--organically, but there are three climate and soil are different. Even the assumptions. [First] food waste has to go Oesling is really different from the south down. A third of food produced in the of Luxembourg, and this is why we have whole world is thrown away before it goes to a shop, a restaurant or a home. So a third of food is produced for nothing. [Second], reduced production and consumption of animal products. Our consumption of animal products, mainly of meat, is quite high.

In Luxembourg, it’s nearly 90kg per person each year--almost two-thirds higher than what is considered healthy, which “Organic agriculture is would be 17 to 34kg. [Third], if we produce more of a challenge, in a way with less feed production from arable land. And this goes together with and this is why I like it” the Feed no Food [project started by SwitCHAREL NOESEN zerland’s Research Institute of Organic Organic farmer, Agriculture, FIBL] because right now we Trifolie farm in Cruchten have around 200,000 cattle and we will only be able to feed 60,000 with area-based

Gilles Kayser

JULY 2022

3 QUESTIONS TO Charel Noesen

Photo

18

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Conversation

JULY 2022

20

IBLA was founded by Luxembourg organic farming association, Bio-Vereenegung, Switzerland’s FIBL and 40 founding members including farmers

livestock management, [which] means that and I think it was really good to have a farm can only rear the number of cattle them because they were an incentive to that the farm is able to feed with the feed have more organic agriculture. But the produced from the area a farm has, mainly problem is that it’s not only about setting based on grassland and field fodder--so the goal but [defining] how to reach it. without importing soybeans, for example. And this step was not done until now. So Luxembourg is importing 27,500t of soy- we have this new organic action plan, but bean extraction meal [each year], and 70% even the stakeholders of organic farming of this goes to cattle and the rest to poultry were not involved in it. I think this was and pigs. A reduction in soybean imports not the best way to do it--it was really induces a shift in feed rations and farm top-down, not bottom-up. management. It would be good strategy to For organic and sustainable farming, do this, but this is not something the farmer I think you need a vision on how to get [alone] can do as [they] depend on val- there and how this transition to 100% ue-added chains and on the consumers organic agriculture can be done and to and their dietary patterns. This is some- really make an analysis of the chalthing for politicians, or we’d need a regional lenges that will likely come up. Which strategy to see how we can get there with- financial and structural support is out the farmer being the loser again. needed? How will the farming landscape look at 25%, 50% and 100% organic Luxembourg aims to increase its share agriculture? How much can still be of organic farming to 20% in 2025. produced with these new principles?

In 2019, MPs called for 100% of organic How much still needs to be imported farming by 2050. Presently, around 5% and exported? What are the environof agricultural land is said to be mental challenges? And this is not really dedicated to organic farming in the done for Luxembourg. country. Are these goals too ambitious, [We also need collaboration between given the current ecosystem? the ministries]; otherwise, it becomes difIt’s a bit like the saying, ‘Shoot for the ficult to go in one direction--you do somemoon. Even if you miss, you’ll land among thing a bit here and there, but it’s not going the stars.’ These are really ambitious goals, together, as it has so many levers. If you

turn it there, it’s fine for, maybe, water protection, but it’s bad for, maybe, the climate or farmers’ revenue, for example.

So it needs to be a holistic approach with a strategy. We have a project called SustEATable, and the first part of the project assesses the sustainability level of the farms in Luxembourg, both organic and conventional. We look at not only economic and ecological sustainability but also social sustainability and the governance of the farm, and you can compare with the guidelines of the Food and Agriculture Organization [of the UN].

We’re also developing a tool with FIBL, and [with this tool] you could actually compare the Luxembourgish milk production farm with the American farm, for example. At least in Europe, it’s nice to have this comparison and you can see the level of achievement in different areas, for example, if it’s 0% or 100% in biodiversity… So we try to find a tool to put it in numbers. We now have the first results, and with these results, we’re going to make a model where we look at, for example, different channels of organic agriculture but also different ways of farming and the environmental and economic situation of the farmers because it doesn’t help if we have a farm

Stéphanie Zimmer

jeopardised. How can the EU avoid backtracking on its targets in response to this crisis?

In Brussels, they’re discussing this at the moment, and I hope they will not go that way because it’s no long-term solution.

We will not have more wheat at all; we will have other big problems because it’s not sustainable in the long-term. Maybe now it helps to get a bit more, but this is not the solution. If you put more fertilisers and pesticides, and intensify this again, you have a lot of environmental problems and not necessarily more yield.

If you use too much nitrogen, you have more pests coming up, like fungi and more weeds. As more nitrogen for the crop plant also means more nitrogen for the weed plant, then you have to spray more. So I don’t know if this is really more economic. I think it’s more short-term thinking, and that’s maybe a problem everywhere. We need a holistic approach.

being 100% sustainable but not having an ideal condition that goes with it. The consumer is a big part, and we also factor them into this model because con- The European Commission sumer patterns and diets have a big has asked for a revised proposal influence on the sustainability of the of Luxem­bourg’s CAP strategic plan whole system. for the 2023-2027 period. What is Luxembourg still missing, Are the available subsidies for local in your opinion? farmers in Luxembourg enough?

I won’t say too much because it’s still in Well, if you ask me, do we need subsi- progress. We were also putting a statedies? I think we do. If you look at the ment to the ministry regarding this. I historical context, subsidies were intro- think [the Commission] said there were duced post-war to make food affordable. points where we were not clear enough But for me, it’s more about how to dis- or we didn’t have a goal or a way to reach tribute subsidies… A solution on how to the goal. It’s not clear for Luxembourg distribute funds and to motivate con- how it will be in the end, but for the sumers to buy environmentally friendly moment, I’d say it’s not enough in the products could be true cost accounting. favour of organic farmers.

For the moment, a consumer buying organic products pays twice: once for the organic product, and once for the taxes, which in part finances to compensate environmental damage [that] occurred while producing agricultural products, whereas the environmental benefits of organic agriculture are scientifically recognised, and thus organic agriculture is producing less follow-up costs than other management systems. Adopting the prin“I get to choose the ciple of true cost accounting, conventional products would get more expensive, seasonal products and thus the difference between organic and keep the and conventional products will fade.

There are calls to suspend rules on sustainable land use to allow for more food production as wheat imports are

customers happy” SANDRINE PINGEON Owner, Les Paniers de Sandrine

3 QUESTIONS TO Sandrine Pingeon What are the advantages of operating a farm subscription system?

It’s true that there are a lot of advantages because I get to choose the seasonal products and keep the customers happy.

And, because it is a subscription system, I know how many customers I’ll have next week and the week after that because the customers are already signed up, and that allows us to keep stock and harvest only what we need.

In comparison to when you started in 2013, is it getting trendier to buy directly from farms?

Yes, because I got my clients by word of mouth…

However, we noticed that since last year in June, things have been changing…

Why? I really don’t know. But after discussing with other colleagues and producers, we see that it is really a general problem, but it is hard to say why. Is it because of the increases in diesel prices or traffic? Is it because people are travelling a lot during this period? I really don’t know.

For me, this is a big question… but the demand is still there.

My private clients remain my first priority.

JULY 2022

“ ​Consumer patterns and diets have a big influence on the sustainability of the whole system”

21

Sebastian Reddeker, pictured along the Alzette, suggests touring the capital prior to visiting other regions

“Ask yourself what kind of tourism you would like to return to” ​ or more than two years, the tourism industry has had to F weather a storm of uncertainty. Luxembourg for Tourism (LFT) CEO Sebastian Reddeker identified this period as the perfect opportunity to re-evaluate the agency’s trajectory.

Interview TRACY HEINDRICHS

Two and a half years after the start of the covid-19 crisis, is tourism returning to a somewhat normal state?

We’d have to think about what is considered ‘normal’. In 2019, Luxembourg’s tourism was one of the strongest in Europe.

But there were also many destinations worldwide that reached their limit in 2019. Barcelona and Venice are classic examples of this. This made us think about over-tourism.

In Luxembourg, we thankfully didn’t have this issue. Considering this scenario, you had to ask yourself what kind of tourism you would like to return to. I think growth is important. In 2019, we recorded 2.8m overnight stays, which dropped to 1.5m in 2020 and then rose again to 2.1m in 2021. So we’re not doing too badly.

Recovery won’t happen before 2025, but it’s faster than expected. The first months of 2022 indicate that we will have a relatively strong summer. At the moment, we have 2-3% growth per week in searches but also booking enquiries, which is a good sign for the July and August period.

Before the pandemic, there were plans to turn Luxembourg into a centre for business tourism. With businesses less ready to spend their budget on sending employees on business trips, what is your strategy to attract them here?

First of all, a special department was set up a few years ago--the Luxembourg Convention Bureau--which focused on

Photo GUY WOLFF

all the Mice [meetings, incentives, con- that takes care of the leisure part. I think ferences, exhibitions] topics. They work the connection is important. Sure, there on covering all the conferences that are are less business tourists at the moment, allocated internationally and that are but we also see that many hotel owners organised in Luxembourg. They also in the city put a lot of effort in filling this manage the intra-Luxembourg traffic. It’s gap with leisure tourists. important to see both aspects on the How do you encourage these business same level.

Sometimes it becomes somewhat of tourists to explore more of the country an egg-and-chicken question. Was it lei- than Luxembourg City? sure--private trips--that inspired some- We at LFT will never tire to repeat this one to have their business or conferences in our communications: there isn’t just here in Luxembourg, or was it the busi- Luxembourg City. The city is great, but ness for which someone came here that you can drive to other regions within an inspired them to stay a few days with hour too, either by car or even free pubtheir family? They balance each other lic transport. Granted, some are more out. That’s why I’m happy that we have easily accessible than others, but there the Luxembourg Convention Bureau that is a lot of variety outside of the capital takes care of the Mice domain and LFT that can be combined with the city.

Whether it’s hiking in the north or the Mullerthal, or a drive along the Moselle, or a trip to Esch, the European culture capital of 2022, you can reach all this from the city.

SEBASTIAN REDDEKER We also communicate about the overCurrent role night possibilities in the countryside. We CEO of Luxembourg for Tourism put up ads in the airport, for instance, to since 2018 showcase both the countryside but also Previously our application [VisitLuxembourg], which Reddeker worked for the also shows what’s outside of the city. We Confederation luxembourgeoise du commerce have our travelling magazine, Luci, too, which we distribute to our partners and Recommendation For a first short trip to Luxembourg, campaigns. It collects not just stories Reddeker recommends visiting the about the city but also stories that comupper part of the capital and the bine urban and rural scenes. Luxembourg Grund before visiting one of the other regions of the country has a great advantage compared to other

23

JULY 2022

Conversation Sebastian Reddeker

Conversation Sebastian Reddeker

24

JULY 2022

business trip destinations, like Paris or Frankfurt: you can easily travel to completely different landscapes.

Luxembourg is known on a global level for its financial and banking sectors. How do you export the culture too?

Of course, everything that is tourism marketing is also nation branding. Tourism has a lot to do with influencing the image of the country in a positive way, and I think that it’s to our benefit that tourism communication in general is apolitical. It’s about living, co-living activities. I believe that it’s important to go one step further than pure information in tourism communication. It’s not just about introducing hotels, restaurants, etc., but it’s also about describing the experience of living here. That is what travellers are looking for these days. They can find classic information online--but prepared information like this, that’s the whole craft of national communication these days. The image of the national economy isn’t bad per se, it belongs to Luxembourg and the life here. But there are other things, and to highlight these is, in my opinion, very important.

The regions are very different, with the north and east attracting the most tourists. How do you plan on better balancing the tourist population among all regions?

We don’t feel like we’re forced to do this in Luxembourg because the regions in themselves still manage the flow in tour-

“ Luxembourg is rarely the first choice. This isn’t a problem; the second or third choice has a chance too”

RECENT TOURISM FIGURES

460,000 Foreign tourist stays of 1+ days in 2021

+58%

Daily foreign tourist outings in April and May 2022, compared to 2021

+2-3%

Weekly increase in online searches and bookings for Luxembourg over the past two months Sources

LFT, Statec

ing out communication about a specific spot. The result might take a while, but eventually we notice that less tourists visit that area.

Are there any strategies to keep the attention of locals and tourists on Luxembourg when faraway destinations are available again?

They will stay interested--that I’m pretty sure of. We see that flights towards us are increasing. We have a clear growth on the flight level, especially from the UK, Germany and Italy. That goes both ways though. In general, the aviation industry is seeing a boom in activity because it was one of the sectors that suffered the most during the pandemic.

It’s not our aim to give people who leave Luxembourg a bad conscience though.

Then, on an international level, Luxem­ bourg is rarely the first travel destination or the first choice. This isn’t a problem because the second or third choice has a chance too, especially when it comes to short trips. And we have to ensure that when people think about what they can do during big trips, Luxembourg is in that decision pool.

How do you approach sustainability ists. We’re not forced to use a lot of com- in tourism? munication campaigns [to distribute to It’s a topic that comes up a lot. Many the incoming flow of tourists] like other people don’t know what this means conplaces. Nevertheless, that doesn’t mean cretely. I think it’s more than not changthat we shouldn’t showcase all the choices ing towels during a stay. Sustainability to our visitors. That is something our app in tourism is a hot subject. Yet tourism does, for instance. I think that there too, is an economic domain, so we have to the travel stories [in the Luci publication] look at how we can change the business are important because they show differ- model in a way that we can still advertise ent combinations of things to see depend- the beauty of our destinations in 20 years ing on what you’re interested in. If you’re while being able to live from it. It’s not into outdoor stuff, we have clear strengths easy, to be honest. We are currently intenin some regions. If it’s industry culture sively focusing on what it means for us you’re after, then you should drive down in Luxembourg because what it means south. If you’re into castles, or as we call for Switzerland or Slovenia might be it ‘daydreams’--easy-going, countryside, completely different. But it’s right that somewhat dreamy--then it’s the Guttland we have to work on the subject of sus[west and centre] you should be heading tainability in Luxembourg. It’s part of to. If you’re more into wine, gastronomy, our tourism strategy but applying it to then, of course, it’s the Moselle region. real life certainly is the most difficult task.

An active distribution isn’t needed yet, but it might come. We already had the The other big topic then is first signs of this in 2020, when the Mul- digitalisation… lerthal was completely crowded in some Yes, it is certainly the second big chalpoints. Gaining visitors is, of course, pos- lenge alongside sustainability. The issue itive but can be negative. This is why, in is that, on the one hand, we have clients 2022, we didn’t even advertise some parts who are very digitalised--around 80% of of the country. That works by not send- all bookings are made online in Luxem-

Discover the latest issue of GUDD! magazine.

o ut t with u o it g k Chec by scannin y . a e del R Cod th i s Q

JULY 2022

26

Conversation Sebastian Reddeker

“ Inflation is a double-edged sword for us”

us too much because we have a relatively bourg. On the other hand, we have a ­sector ­­ that is not yet on the same level of digi- small percentage of international tourists. talisation. I think we have to create an What is much more complicated is to preunderstanding that everything begins in dict the cascading effects of the war--like the digital world. It ends, of course, in the inflation, and thus energy prices. We thought physical world, but it starts in the digital people would want to spend the savings world. And the big challenge for us is to they put aside during the pandemic, but see that our offer is digitally adequate for now, with the high inflation, many houseanyone who works in the branch, like holds see their savings dissolve into thin air. That’s something that must worry us hotel managers.

Then, as a small destination, we also because we see that, on an international have to combine our efforts. Existing as level too, travelling this summer will be an infinite number of separate websites pretty expensive.

How do you deal with the possibility?

It’s a challenge that worries us on a daily on the market isn’t viable anymore. That’s basis. We work hard to find strategies to why VisitLuxembourg has now set up a And so people turn to nearby answer these issues in the best way posportal which will have a much greater destinations… impact in the market once it’s fully estab- Inflation is a double-edged sword for us. sible. That’s not easy. Tourism is connected lished. Each region has its own space on On the one hand, Luxembourg is a sec- to everything, so anything that happens the platform, but everything flows together ond-tier destination, and where do you will have an influence on the behaviour in the site and, therefore, all these sites generally cut [when cutting expenses]? of travellers. Whether it’s a pandemic, an have a stronger presence online. Other- Not the first destination, but ones after energy crisis, a war, an inflation--everything wise, we’d stand no chance. that. So we have to see to it that we posi- in one way or another impacts travelling. tion ourselves well enough. But then, of That’s why it’s also one of tourism comDo you believe the energy crisis and course, it’s also a positive thing because munication’s roles to show how important the war in Ukraine will have big short trips, city trips, regional trips are it is to keep our borders open. It’s the same impacts on tourism in Luxembourg? something you can also do with a small for energy and climate issues: I think that For now, no. It’s clear that the war in Ukraine budget. So now we can only wait to see travelling is explicitly bound with these in itself does not have an immediately rec- how the summer will go here. We have topics, and we have to be responsible in ognisable negative impact on tourism in to be cautious, but as a short-distance our behaviour too. the grand duchy. We see a certain reluc- destination, we have potential to attract What is still missing in Luxembourg’s tance among international tourists, like a lot of people. tourism? those from the US. That’s the same for our European neighbours. These travellers Are you preparing for another There are still some gaps in public transhesitate to visit Europe, but it doesn’t affect covid wave? port connections. Free public transporAside from the fact that we hope it doesn’t tation is good, but people really have to come to this, I think that, in the last two think hard about how to travel between years, we’ve learned how to manage it. different regions here. Another issue is LFT has learned to be flexible, to throw that during the weekends, a lot of conout communication plans from one day nections are missing because the schedto the next, to cancel some things and ules are planned around commuters, when ATTRACTING VISITORS set up others on short notice. It’s not easy, tourists are there on the weekend. Another Though Luxembourg for Tourism but we’ve learned to do it. So we, as an recurring subject is the development of doesn’t directly market to China agency, are prepared. The sector in itself accommodation in the countryside. In right now due to lockdowns, this year it launched a Chinese website should also have learned to react to this the capital, we have a lot of capacity, but to direct the existing interest for type of event. But in reality, if another in the countryside, there have been a few Europe towards Luxembourg too. lockdown were to happen--which we traditional places that have closed. Then, The aim is to attract faraway visitors to Luxembourg--once restrictions naturally don’t hope for--then we just there is the need to improve cycling infraoverseas are more relaxed--while have to say it as it is: there will be no structures in the grand duchy--there is they’re visiting better known and budget left. I don’t know if businesses surely something to be done there. But more popular destinations around.

The Chinese market remains, are able to weather through a new lock- in general, we can’t really complain. however, extremely complex in down or a crisis of this size in combinacomparison to other international tion with everything else that currently markets like the US, according to Reddeker. This led the LFT to join is happening. What we thought we had forces with other regions--such as before the covid pandemic--stability and Wallonia in Belgium--to propose a plans over three, four, five years--isn’t combination of destinations to the US market, where clichés and there anymore, and I don’t know that it expectations about the grand duchy will ever come back. Rather than that, I are near inexistent. Reddeker think we’ll find strategies to deal with believes this type of model to be the future of long destination tourism. eventual insecurities.

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JULY 2022

28

Renaud Sara designs bulthaup kitchens in line with the company’s philosophy – sleek lines and meticulous attention to detail for free-flowing spaces.

Art of living

The kitchen as a living space

The kitchen says a lot about someone’s lifestyle. It can tell you how much heart and soul they invest in the ‘ordinary’ days of their lives.

“People have been investing much more in their homes

since the start of the pandemic. The kitchen has become the most used room, and increasingly it also incorporates the dining area.

Clients ask us for kitchens with a large table, which

sometimes even replaces the island unit. This is evidence that the kitchen has become a genuine living space in its own right, where everyone can get together,” says Renaud Sara, interior designer and managing director of bulthaup Espace Luxembourg, who designs kitchens not just to be utilitarian work stations, but to be harmonious living spaces.

Reinventing the kitchen concept Long, beautiful tables are now front and centre in many kitchens and

in the brand’s showroom too. Located on Route d’Arlon in Strassen since 1992, the showroom was newly renovated in 2020 and presents bulthaup’s iconic creations and expertise. It’s also home to a team of interior architects who work hand in hand with clients to create kitchen spaces that reflect their personalities and lifestyles. The 290m2 showroom epitomises the brand’s philosophy – infusing unique, high-quality pieces with soul to live up to the clients’ dreams.

Pleasing to the touch and

Photos

People aren’t necessarily cooking more but they are spending more time at the heart of their home: the kitchen.

It’s a creative space where friends and family can gather and feel at ease.

In these changing times, it has increasingly become part of the living space as a harmonious whole.

Eva Krins (Maison Moderne)

Sponsorised content by BULTHAUP

BRAND VOICE

JULY 2022

29

bulthaup kitchens are primarily designed as harmonious living spaces.

to the eye, the furniture, wall and islands units are as sensual as they are functional. But this renewed interest in the kitchen doesn’t mean that clients are necessarily slaving over a hot stove more than ever before – in fact, it’s the contrary.

“It’s clear that people are eating out and getting take-aways more often, and cooking elaborate meals far less frequently. And yet, the kitchen is still the heart of the home and the hub for other social activities.

We are always aware of our clients’ actual needs, and we are reinventing this space accordingly by creating a place suitable for all kinds of social interactions, not just cooking,” explains Marc O. Eckert, CEO of the brand.

tism into poetry, the brand is renowned for its simplicity and minimalism, its clean and uncluttered design. Simple elements focus on the essential and create free-flowing spaces, where people feel at ease.

The use of fine, sensual materials, such as wood or stone, with meticulous workmanship seen in the smallest details and impeccable finishes,

“ We are reinventing the kitchen concept by providing solutions for all social inter­ Craftwork and sustainability Bulthaup has something actions, not for everyone, offering just cooking.” infinite functional and aesthetic possibilities.

Transforming pragma-

Marc O. Eckert CEO, bulthaup

is also a trademark of the brand’s style.

“We believe that craftsmanship and the tradi­ tional treatment of authentic materials in industrial manufacturing embody the high end of the market.

This is the only way to guarantee that each product is unique,” the CEO adds.

There’s a personal touch in every stage of the production of a bulthaup kitchen, from the design to the final delivery, and it shows.

“We are very particular about all these aspects, about the importance of craftsmanship, which makes all the difference, but also about the use of quality materials that respect resources and the environment. It is this combination that allows us to offer high-quality, timeless and, as a consequence, sustainable kitchens,” Renaud Sara explains.

A wide range of decorative touches are available too, but the kitchens

are not just attractive and functional, they are user-friendly and organised, right down to interior fittings and the personalised organisation of drawers and pull-out storage units. Everything fits perfectly in a bulthaup kitchen – most importantly of all, the people who really use them, their friends and their families!

wroom ur sho Visit o rassen in St ation onsult for a c

ourg. xemb u l . w m ww up.co bultha

Business report

30

New PE investors 30 % €114bn €103bn

25 % €97bn

20 %

15 %

10 %

5%

0%

2017

2018

2019

Private equity

31

1 “We’ll see lower

leverage or more private debt”

Is it possible to deliver the outsize margins investors expect? p. 32

2 “Private equity and private debt must work close together” The exit of banks from PE packages might spell good news p. 34

3 “Luxembourg’s a great country for seed stage investment” On the grand duchy’s growing talent pool and investor appetite for a third vintage

€118bn

JULY 2022

Capital is piling into alternative assets and private equity is one of the biggest winners. With IRR as high as 20% and ESG compliance papering over its former predatory image, the asset class is attracting conservative institutional investors as well as coupon-hungry retail investors in search of yield.

€120bn

p. 36

€110bn

€100bn

€80bn

PE FUNDS RAISED

BY TYPE OF INVESTOR

€60bn

Pension funds remain top PE investors, with feeder funds gaining ground.

Source

Invest Europe/EDC

Pension funds

€40bn

Fund of funds & other asset managers

Family offices & private individuals Insurance companies Sovereign wealth funds Government agencies Banks Corporate investors

€20bn

Academic institutions, endowments & foundations Capital markets New funds raised (excluding capital gains)

2020

2021

€0bn

32

Private equity

Business report

1 Allen & Overy

Chunky volumes of investor capital sit in private equity, but the investment environment of 2022 is a very different beast, says Jacques Graas, partner at the international law firm Allen & Overy. “The money’s raised, the funds have a mandate, but the industry needs to rethink its fundamentals.”

Debt The time-tested package of equity topped with mountains of cheap leveraged debt is under threat from 2022’s creeping interest rates. “Debt is more expensive, so we’re going to see different packages, either with lower leverage or--when the bank steps out all together--the participation of more private debt.” Existing debt packages are not safe either. “The terms and conditions of the original debt package will be put to the test in refinancings. Those that haven’t got a watertight deal will face higher costs.”

Exits and deal duration Higher costs also apply to exits. With global equity markets in flux, private equity owners are forced to play the waiting game before floating a stake. “An initial public offering is expensive, with a complex legal process and a prospectus.

This is only justified if investors can get

fundamentals when buying. “Factors need to be taken into consideration that weren’t part of the due diligence process before. One of these is supply chain.”

The same applies to ESG. “It’s always been part of due diligence, but in recent years investors are understanding that good ESG means good financial returns.”

Jacques Graas

financial upside.” Many private equity houses will be pursuing dual-track processes of IPO and other exit options such as M&A or secondary sale while waiting for the right market moment.

Uncertainty around exits means longer The entry of retail investors investment duration. “A typical private Internal rates of return of up to 20% equity fund will have a two-to-three-year mean that high net worth individuals are investment period, hold the assets for increasingly eyeing private equity fundsfive years and perhaps another few years -and feeder funds are in place to gather of extension. But with the market con- and channel this money. “Many private straints already mentioned, they may banks are offering these products now,” now need a longer period of time to real- he says. “This may mean private equity needs to rethink its fee model.” Despite ise the asset value,” says Graas. the changing requirements, there has never been so much money chasing priSupply chain and ESG considerations Companies once thought of as attractive vate equity. “The asset class is very much by private equity are also shape-shifting. here to stay,” says Graas.

“We were once in a globalised world. Now we’re not,” says Graas. For private equity, this means examining different business Words JOSEPHINE SHILLITO

GLOBAL PRIVATE EQUITY FUNDS, $BN Source

Preqin Pro

Aggregate capital raised

Assets under management**

8,000

6,632

6,000 4,000 2,000

578 236

207 0

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

*As of 19 May 2022 **To avoid double counting, fund of funds and secondaries are excluded; 2000-2021 are year-end figures; 2021 figure as of 30 September; 2022 data not yet available.

2020

2022*

Allen & Overy

Money is piling into private equity like never before, with assets under management up more than threefold in the past decade (see chart). Is it possible to deliver the outsize margins investors expect?

Photo

JULY 2022

“We’ll see lower leverage or more private debt”

ADVERTORIAL

Luxempart is proud to give the most recent example of its two-pillar strategy

John Penning, Managing Director, Luxempart

Photo

Luxempart

Luxempart, one of the only private equity investors established with its operating teams in Luxembourg, combines its listed nature with long term investments in private companies in continental Europe.

Luxempart invests its net worth (ca. € 2.2bn as of December 31, 2021) through a dual strategy: the bulk of its net assets is invested in private equity transactions where Luxempart takes a direct stake and where it invests for the long term, contrary to most private equity funds which have an exit horizon of no more than 5 years.

In the strategies or geographies where Luxempart is less legitimate, it invests via its second activity: investments in top-notch third-party private equity funds, where it is able to establish strong ties to the management teams, generating proximity and co-investment opportunities.

The most recent example of this dual strategy is that in May 2022, Luxempart has co-invested alongside Deutsche Beteiligung AG Fund VIII in Metalworks, a company that was previously controlled by Bravo Capital Partners, one of the investment funds where Luxempart is a significant investor. When Bravo Capital Partners decided to put Metalworks up for sale, Luxempart, seeing the significant further development potential of the company, signalled to potential

buyers that it was willing to consider an investment alongside the new owner, and to continue supporting Metalwork’s development. DBAG, wishing to capitalise on such continuity, has offered Luxempart to re-invest alongside them, an offer that Luxempart accepted gladly.

Metalworks is a group of Italian manufacturers of metal and plastic accessories, serving the luxury industry. The Group has been established in 2016 by Bravo Capital Partners, through an active buy-andbuild strategy. Metalworks serves all main Italian luxury goods manufacturers, many of which belong to large French groups, its next target customers. In 2020, the group management was reinforced creating a platform able to integrate further acquisitions in a market that is still highly fragmented. The target, shared by DBAG and Luxempart, is to continue building a leading supplier serving all needs of the luxury industry and to preserve and strengthen the unique Italian savoir-faire.

CONTACT: JOHN PENNING Managing Director t. +352 437 435 101

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Private equity

Business report

2

“Private equity and private debt must work close together”

Greening up the corporate A typical private equity-owned business might be new to ESG best practice due to its small size or its prior focus on financial growth. “Depending on how small it is, it’s likely to be falling outside the directives as currently enforced,” points out Welch. “It’s also the financial owners who have to comply with ESG, not the corporate, so there’s another disconnect there.”

Themselves incentivised by their institutional investors, PE firms will draw on a number of tools to encourage respon-

Douglass Welch

sible behaviour in a portfolio corporate.

“They decide how to remunerate company management, how to target and award their bonuses, how to share the capital gain at exit--a mix of financial and ESG metrics, what growth to support, what projects to invest in,” says Welch.

“Their limited partners (investors) have their own ESG requirements so will only give money subject to certain conditions.”

The debt package too can pack an ESG punch. “At the credit analysis stage, the private debt investor can find ESG weaknesses and ask for them to be fixed as a precondition to lending. Then there is the margin ratchet.” Businesses pay certain margins on their debt, and these can be ratcheted up or down on the attainment of certain ESG criteria.

A big opportunity The retrenchment of banks and the growing participation of private credit funds in leveraged buyouts is a big opportunity for ESG compliance. “Banks of course play a role in ESG compliance--they’re not interested in financing non-ESG-but private credit funds can play an even more active role.” Like private equity, private credit funds have external investors who are preoccupied with ESG. Banks, on the other hand, have a more dispersed shareholder base. Private credit funds, due to their relatively smaller size, can be nimble about enacting change over the life of the private equity investment (typically five to seven years). “The beauty of the market is that

But equity and debt still independent Yet private equity funds and private credit funds aren’t working closely enough with one another in this common goal.

This, Welch believes, will change in time.

“The challenge to the private equity industry is a harmonised set of standards in ESG. The private equity sponsor needs to provide the private debt company with a statement of what they are doing on ESG. Otherwise everyone’s racing together towards the same door when they could slow down and walk through it hand in hand.”

Words JOSEPHINE SHILLITO

GLOBAL PRIVATE DEBT FUNDRAISING Source

Preqin Pro

300

300

200

200

100

100

0

0

Number of funds Aggregate capital raised ($bn)

Pemberton Asset Management

As a greater number of European businesses become targets for a private equity buyout, there is hope that companies will find the critical support they need to comply with ESG. “Private equity houses have considerable influence over whether a corporate complies with ESG. They own the company,” says Douglass Welch, portfolio management conducting officer at private debt manager Pemberton Asset Management.

And the debt package supporting the deal can also play a role. “As banks draw back from leveraged buyouts, it would be hugely useful if private equity and private debt worked more closely,” Welch says, “because otherwise the corporate has two sets of ESG policies to follow and it’s a lot to deal with.”

the institutional investors in both private equity and private debt are in the same universe.”

Photo

The exit of banks from private equity debt packages could spell good news for the planet--if PE houses and private debt investors combine their considerable muscle and work together.

20 13 20 14 20 15 20 16 20 1 20 7 18 20 19 20 2 20 0 2 20 1 22

JULY 2022

Pemberton Asset Management

ADVERTORIAL

Private equity and the public market: when boundaries are blurred As one of the fastest and steadiest growing asset classes in the last couple of decades, private equity is undeniably one of the main drivers of transformation in capital markets.

The special-purpose acquisition company (SPAC), a vehicle whose now fading popularity has until 2021 helped propel IPO activity in U.S. and Europe to record-high levels is a perfect example of how private equity (PE) shapes and drives activity in the public capital markets.

The SPAC, which investors may well regard as a competitor for the PE asset class, was embraced by the PE industry and was over time integrated in the PE toolkit. Due to its standing ties with the PE industry, Luxembourg was one of the prodigy jurisdictions for SPAC activity in Europe. While the trend lasted, PE-backed SPACs helped Luxembourg secure a spot on the SPAC map.

As the public markets are facing increased volatility on the back of the global health and political context, the SPAC trend is fading and IPO activity is reported to have experi-

enced a slowdown in 2022. drawing on the PE industry’s resilience over the past two years and taking into account the high volume of dry powder reported to be available in the PE asset class, we can expect the PE industry to continue to drive activity in the public market and creatively leverage on opportunities created by uncertainty and volatile prices.

Public targets will likely be seeking for alternative means to return value to investors, other than by market price. On the other hand, the fall in share prices may provide PE firms with investment opportunities in high-quality undervalued targets.

With public-to-private deal numbers on the rise and PE firms still ready to deploy a significant amount of capital, the PE industry is set to have a say in how the capital market activity will look like in the coming years.

DO YOU WISH TO KNOW MORE? CONTACT OUR EXPERT! ANA ANDREIANA Senior Associate ana.andreiana@loyensloeff.com

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Private equity

Business report

3

“Luxembourg’s a great country for seed-stage investment”

Prior to 2016, Luxembourg digital tech entrepreneurs faced limited fundraising opportunities--a discouraging conversation with a bank manager unwilling to lend against unpatented technology and unproven business cases, or a begging trail around friends and family to stump up the cash.

All this changed with the launch of the Digital Tech Fund in 2016, a public-private partnership to fuel the growth of valuable tech and entrepreneurship in Luxembourg.

“It’s the only local-focused venture capital fund in Luxembourg,” says Alain Rodermann, whose fund Expon Capital manages the Digital Tech Fund on behalf of its investors. “We take minority stakes of maximum €1m in seed-stage businesses.” In six years, the Digital Tech Fund has raised €20m over two vintages, with strong investor appetite for a third vintage in Q2 of this year.

“The appetite has absolutely grown from investors. The performance of the fund has helped, as well as the de-risking presence of the public investors.” The fund, which boasts the Luxembourg government, national investment outfit Société Nationale de Crédit et d’Investissement and the University of Luxembourg among its public investors, has

Alain Rodermann

taken stakes in 13 companies since inception--with zero bankruptcies. “Not one,” says Rodermann. “I put this down to the entrepreneur profile in Luxembourg.”

Those starting their businesses in Luxem­ bourg tend to be senior, with 15 years’ experience behind them, keen to solve problems that they encountered in the corporate world. “The average quality of the deals [we encounter in Luxembourg] is higher than those in the big cities.”

What has improved in Luxembourg is the company structure. “The structure of companies we see now is far more suitable for venture capital investment than the structure five years ago,” says Rodermann. He explains that for successful equity investment, a company’s corporate governance and articles of association need to support growth, not the servicing heavy existing bank debt packages, and its exit clauses need to allow investors to exit all together. “It needs to be clean, and for subsequent rounds of financing it needs to be ready to accept money at a higher price per share.”

Rodermann credits the first few deals done by the Digital Tech Fund for propagating good standard practices in Luxem­ ­bourg. “Like all VC funds we work closely with companies at the board level”, but also the accelerators and incubators in Luxembourg that help prepare businesses for an eventual VC investment.

“The ecosystem in Luxembourg has changed completely in six years. There are now at least 10 incubators--including the L ­ uxembourg House of Financial Tech-

nology and the House of Startups-all helping founders build something compelling.”

Rodermann estimates that there are around 70 companies in Luxembourg looking to raise VC money and around 200 incorporated elsewhere but hoping to develop activities in the grand duchy.

“It’s a small number,” he says. “However, our portfolio companies are already growing and we expect the Digital Tech Fund to be in the top decile of European seed funds in terms of performance.”

Words JOSEPHINE SHILLITO

VENTURE CAPITAL INVESTMENT, % OF GDP Source

Invest Europe

Finland Denmark Netherlands Sweden Austria UK Baltic countries France Germany Spain Switzerland Belgium Hungary Ireland Luxembourg Czech Republic Norway Bulgaria Greece Portugal Poland Italy Romania Ukraine

Mike Zenari

Six years after the launch of Luxembourg’s €20m Digital Tech Fund, venture capital fund manager Alain Rodermann talks to Delano about the growing talent pool in Luxembourg and investor appetite for a third vintage.

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Expon Capital

Head to head

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FEBRUARY 2022

LGBTIQ: legislation and reality Luxembourg has slipped in the Rainbow Europe index but remains one of the most progressive countries on LGBTIQ rights.

Nicolas Van Elsué is a member of the board of national LGBTIQ association Rosa Lëtzebuerg

There is no doubt that significant progress has been made in the grand duchy in terms of rights and acceptance of the LGBTIQ community.

But has the current government done enough in terms of legislation?

CORINNE CAHEN I think we have done a lot, and I could list everything that we have achieved. But subjectively, it is not enough to say that all is okay because you think it’s okay. I notice again and again that it is not like that for everyone.

And we have to talk about living together and inclusion. There is a world out there that is full of preconceptions, where parents push away children when they come out… a world of machoism. That just doesn’t exist in my world. So, it’s good to learn of examples, to have these things shown to you.

We introduced civil partnerships, and then marriage for same-sex couples, and recently extended parental leave to them as well.

But you won’t change mentality through legislation. We have to look further to try to do that, and if we can’t change people, then we have to ensure that the next generation does not have that mentality.

“ Coming out is a very, very loaded term”

NICOLAS VAN ELSUÉ I think we can second that by a mile. The last 20 years have seen a lot of progress: the most important, as the minister said, are the Pax and marriage reform, but also an adoption law and the plan national since 2018, and the anti-discrimination law introduced in 1997. And, in 2001, we had the first collaboration between Rosa Lëtzebuerg and the ministry to create the Cigale counselling centre. The prohibition of hate speech to include sexual orientation and gender identity was certainly another big step forward. These have all helped the community to have a bigger voice and a place to address their concerns in a more official way.

As you’ve hinted, despite legislation to end discrimination and initiatives to promote equality, many people, especially the young, still face challenges. What can be done to actively support young people in coming out?

NVE Coming out is a very, very loaded term. Before you were coming out ‘into’ the scene. But it has now completely turned around, so now you are ‘coming out’ to everyone else. Also, for many people, it is a process that never stops. With every new person you encounter in your life, you have to make the balance: ‘will I talk about everything or not?’ Sometimes, the situation is not clear. So if you have allies, people showing that they won’t judge you, that they are open, that they just want to know you as a person… that changes so, so much.

In international companies, it’s a bit different because they already have more adapted inclusion and diversity policies that come from abroad. For example, there is an LGBTIQ group in HSBC, and ING openly advocates for the community. But in more local companies or government institutions, it becomes a choice or a risk if you are coming out that might affect your career options.

Equality

CC I think the associations have to speak up about what they need. And we must help young people to feel comfortable in schools… I always say that we need ambassadors for LGBTIQ who are not part of the community. I think it’s important that politicians who are not directly affected should stand up and fight for LGBTIQ rights, not just Xavier Bettel, Marc Angel and Etienne Schneider… but that is valid for the rights of others as well. I don’t have to be a wheelchair user to campaign against pavements being too high.

There has been some criticism from Rosa Lëtzebuerg over the revision of the Constitution and, in particular, that Article 11 is too vague in places and that the text still promotes the dual gender model…

CC There is still work to do. We dropped a few places in the Rainbow Index because we don’t meet some of the new criteria… the legal introduction of a third gender option. The justice ministry is working on this. The same with operating on intersex children automatically as soon as they are born. But we have to say, these are subjects that are not so easy to handle… changing the Constitution won’t change attitudes.

NVE Whether it is a third or more gender options is not clear at the moment. We would like more transparency. It takes time, but that is a bit counterproductive because by the time the laws are finally adopted, they are no longer really up to date. We live in a dynamic world, and things change.

CC I know, from my own experience as a minister, that legislation takes a very long time. There is an inter-ministerial group, led by the minister of justice, working on the third-gender text. And she [Sam Tanson] has promised that a project will be introduced before the end of this legislature.

NVE For us, it is more of a wish that a real demand… but we know that there is a gender spectrum, and allowing people to define themselves is important for their identity. One size does not fit all. But we are concerned that we are missing an opportunity, and if the Constitution is passed, it will cement the dual gender model for at least another generation.

CC But the Constitution reform has been going on for what, 15 or 20 years… I understand the need for the change, but if I

39

“ I always say that we need ambassadors for LGBTIQ who are not part of the community”

were given the choice I would [prefer] that everything works in real life than in the Constitution text. I think it’s important that we manage to allow everyone to love freely.

NVE That probably works for most people, but there will always be those cases where people need the support [of the Constitution].

Another reason Luxembourg lost marks in the Rainbow Index is the fact that there has been no explicit ban on conversion therapy in Luxembourg…

CC We are not aware that any such therapy is happening in Luxembourg.

It doesn’t seem to be an acute problem in Luxembourg.

NVE This is the problem. Just because it is not being reported doesn’t mean it’s not happening. But, for example, France and Germany both have laws forbidding conversion therapy, and the fear is that people may travel from those countries to Luxembourg to practise it. We shouldn’t wait for something to happen to enact a law that could help prevent it. Young people living in more conservative families need that assurance of having a law on paper.

The Luxembourg Pride Week 2022 street fest takes place in Esch-sur-Alzette on 8-9 July.

Moderated by DUNCAN ROBERTS Photos ROMAIN GAMBA

Corinne Cahen (DP) is the minister for family affairs and integration

Essay

JULY 2022

40

No post-Brexit boomerang, for now Six years after the Brexit vote, is the UK regaining competitiveness as a financial jurisdiction? Executives in Luxembourg are sceptical, but one big threat is lurking.

Words AARON GRUNWALD

Illustration SALOMÉ JOTTREAU

Finance

41

When the UK voted to leave the EU on 23 June 2016, there were fears that LonSource EY Financial Services Brexit Tracker don’s financial industry would be hollowed out, or at least hampered, as 2016 British operations decamped for the Continent in order to be able to continue 2017 serving EU clients. Six years later, that 2018 has been partially proven true, although 2019 change has come slowly and not terribly dramatically. But there has been funda2020 mental change.

2021 “Financial services firms were negatively impacted by the uncertainty created around 2022 the future of the UK’s trading relationships 10% 20% 30% 40% 50% 0% with the EU following the referendum,” said Andrew Pilgrim, UK government and *Among 222 “significant” financial services firms monitored by EY between 2016 and 2022 financial services leader at the consultancy EY in London. “What became apparent through the years of tracking the public statements of large financial services firms was how resilient the sector is and that, despite the initial fears of a mass exodus, the UK has retained its position as a leading global financial hub, even while the EU has continued to build up its domestic eration firms that have more than 200 jobs capital markets.” in London, leaving out quite a number of Indeed, the number of “major planning asset managers and fintech firms”. The applications” for new office space in the study does not accurately track new roles Square Mile, London’s historic financial created and what happens when an district, has spiked, according to Cathe- employee leaves a firm. For example, if rine McGuinness, former policy chair at somebody retires in London and is replaced the City of London Corporation. (The City in Frankfurt, “that’s not a ‘relocation’ of of London Corporation has a unique role the person.”

By Mackel’s calculation, there have as both a local government council and promoter of London’s financial sector.) In been “at least somewhere around 20,000 2021, 400,000m2 of new office floorspace jobs created post-Brexit on the continent. was approved, “an increase of almost 70% That still isn’t a humongous number. It’s year-on-year.” not been a Brexodus. But it shows that the centre of gravity for decision-making and Numbers game for activity post-Brexit has clearly switched “While some business has inevitably relo- to EU hubs.” cated to the Continent, predictions of tens of thousands of jobs leaving the City Control vs access have not come to fruition,” McGuinness “The premise underlying Brexit was takcommented. Earlier this year, EY esti- ing back control and getting rid of EU mated there would be a total of 7,000 regulation. The way it’s been presented Brexit-related staff relocations from the is that [the EU] had been a break on exploitUK to the EU, “significantly down from ing the full potential of the City of Lonthe peak of 12,500 announced in 2016,” don. Now, six years after” the referendum, (see chart, page 42). Meanwhile, finan- “reality is kicking in.” There has not been cial firms have steadily been making fresh “fundamentally much change”, Mackel hires in both the EU and the UK, with said. The main difference today “is that the most recent growth “predominantly the UK has lost access to the largest retail driven by an uptick in the number of staff market and the most integrated single hired in London,” EY stated. market in the world, thus cannot distribNicolas Mackel, CEO of Luxembourg ute any financial services or products for Finance, a promotion and business directly from the UK into the single mardevelopment body, said the EY tracker ket. But it hasn’t gained anything else in has some flaws. “It only takes into consid- compensation.”

The UK does not have many big international markets that it can tap, in his view.

“I don’t think there’s any chance British funds will be able to compete on the US 401(k) market anytime soon,” Mackel said, referring to the popular private retirement investment plans. China, Japan and India “don’t have a history of being very receptive to welcoming non-domestic financial services. So what is left? The Commonwealth? Does that compensate for losing access to the EU single market? Certainly not. What is it that the UK then wants to do? Well, it’s positioning itself as welcoming the world to London, which is great, but which is exactly what it had been doing for the last 250 years in financial services, with a very high degree of success.”

The UK government is reviewing regulations with the aim of creating competitive edges in key segments. They very well may pass clever reforms. “The real problem is whom are you going to sell the product to? Most financial centres always have a primary geographic market.” For the UK, “that has always primarily been the EU. If you don’t have that, whom are you going to sell it to? That’s where the difficulty lies.

So I really struggle to see how the UK can turn Brexit into a real opportunity besides what it already had,” Mackel said.

Other industry leaders agree. “There is no upside to Brexit in the UK,” Enrique Sacau, CEO of the fund data firm Kneip, told Delano. “How much downside remains to be seen, but there’s no upside.”

Structural shift Part of the UK’s challenge is that the playing field changed shape following the referendum. “In the months following the EU referendum, UK financial firms voiced their intentions to bolster EU subsidiaries, move staff abroad and relocate headquarters in preparation for all possible scenarios,” in order to guarantee their ability to keep operating in the bloc, said Pilgrim.

The problem is those backup plans have evolved into firms’ main plans. “They had done this initially more or less on a shoestring, as a contingency operation, not knowing what the outcome” of EU-UK trade talks “was going to be,” said Mackel.

“Now we are seeing that these contingency operations are in the process of being expanded. And you clearly see that EU activities are now not led from London any longer, but from various other EU

JULY 2022

LEAVING LONDON Percent of financial companies* that have relocated or formally announced plans to relocate staff and/or operations from the UK to the EU due to Brexit.

42

Essay Finance

JOB SHIFTS

JULY 2022

Estimates* of Brexit-related staff relocations from the UK to the EU have fallen “significantly” since 2016, while the number of new positions created in both the EU and UK has trended upwards.

hubs.” Major financial institutions now lateral damage that we initially feared, then have their EU headquarters in Amsterthe impact of these new UK measures will dam, Dublin, Frankfurt, Luxembourg or be more limited. Recent informal comSource EY Financial Services Brexit Tracker Paris. “If you want to talk to the heads of ments from the EU suggest positive develEU operations, they are not sitting in Lonopments here,” the figure said. don anymore. Three years ago, they were 15,000 Change around the edges still sitting in London. When you want to talk to the guy who calls the shots on EuroThe tax rules illustrate the broader point: 12,000 pean affairs” today, they are more likely “while it will be difficult for the UK to 9,000 than not to be inside the EU. “That is the deregulate to make London more favourBrexit reality.” able than the EU to attract international 6,000 “I don’t see any existing operator movbusiness, there is a risk of the EU introducing new regulation that is too buring fund management companies or teams 3,000 from Europe to London for the foreseeadensome and that may cause business to 0 ble future,” said a senior financial industry move to the UK.” 2016 2017 2018 2019 2020 2021 2022 “Consequently, my expectation is that figure who did not want to be named. “However, this does not mean that there will be firstly, the UK will try to tweak its regime Projected total jobs relocated from a significant movement in the opposite rather than engage in wholesale dereguthe UK to the EU due to Brexit direction. Right now, given the EU regulation,” the figure said. “Ultimately, part Brexit-linked new hires in the EU** latory environment, which is relatively of the attraction of the UK historically has Brexit-linked new hires in the UK** benign to outsourcing functions to the been to access the European market and UK, a certain stasis has been established.” to maintain this position, the UK will have “If I were a new asset manager targeting to align with EU rules. To some extent, the the European market either as an investor UK therefore becomes a ‘rule taker’ from location or as an investment location, the EU. The irony of this is not lost on the I would think hard before establishing in financial sector.

London, however. It would be a bit like “Secondly, having accepted the limits establishing in Canada to target the US of regulation, the UK will seek to make market. Not impossible, but not the obvi- without any action on the UK’s part. “Don’t itself attractive by better application of ous move,” the figure said. forget, it’s not only about what the UK the rules, for example, by having more “The EU has basically closed the door can do, it’s also about the EU seldomly business friendly administration of the to the UK in terms of the distribution of missing an opportunity to shoot itself in rules as opposed to changing the rules UK funds and UK distribution efforts the foot. If we change our regulatory themselves.” within the EU although the UK put in framework in a way that provides the UK Specific national challenges cannot be place equivalency regimes for the distri- with an advantage, they don’t have to do underestimated either. “Luxembourg has bution of EU funds into the UK,” said anything. Take an example, the financial its own problems,” Sacau observed. “The Claude Niedner, partner at the law firm transaction tax. If we were to advance situation with bringing [cross-border comof Arendt & Medernach. “This is an oppor- into that area, the UK doesn’t need to do muters] back to the office poses an existential threat to our ability to attract and tunity for Luxembourg to position itself anything” to regain attractiveness. as a European centre of fund distribution.”

The senior industry figure struck a sim- retain talent. They want to work from “On the other hand, the UK is consider- ilar chord: “London has introduced the home, like every other western worker and, ing initiatives to improve the attractiveness asset holding company, aiming to attract unlike in London and in Paris, we can’t of the UK as a fund structuring jurisdiction,” business in nonregulated parts of alterna- give them that freedom. This is why some said Niedner. These mainly are around tive investment fund structures. This would Luxembourg firms--and I can think of private market funds, such as infrastruc- be clear competition for the expertise that quite a few--are keen to strengthen their ture and asset holding companies. “In addi- Luxemburg has developed over the years. position in London.” tion, the UK is keen on positioning itself The success of this measure will depend in the digital assets environment. Hence, both on Luxembourg’s capacity to keep the EU has to be aware of the UK as a seri- its framework attractive and also on whether ous competitor in the fund structuring European regulation gets too burdensome.” environment, if a distribution within the If the draft tax reporting rules known EU is not key to the success of the fund.” as Atad 3--sometimes called the Unshell Directive--“were approved and impleEU vs UK action mented in its initial form, unnecessarily While the UK is likely to craft some com- burdensome for the alternative investment petitive edges, Mackel is more worried industry, then I think the UK could sucabout what happens inside the single ceed in attracting more business. If, howmarket itself. EU regulatory missteps ever, the final version of Atad 3 would be could provide London with an advantage more focused, without the pointless col-

10×6 LUXEMBOURG INTERNATIONAL CHAMPIONS! 10 entrepreneurs, financiers, inventors, artists, film producers, of Luxembourg origin and who became famous internationally, will share the story of their adventure and their vision for more Luxembourg initiatives to be successful internationally.

Programme • Welcome cocktail (18:30) • Show (19:00) • Networking walking cocktail (20:15)

20.09

Tuesday

Athénée

Registration and

Luxembourg

www.paperjam.lu/club

information:

NOVEMBER JULY 2022 2021

44

Gusto

With love from Africa!

From Morocco to Senegal and South Africa, these meals and fine wines by local establishments could save you a trip across a continent.

1 Le Riad Enjoy a delicious taste of traditional Moroccan tajine in Luxembourg at Le Riad. This lamb with apricot recipe is served alongside small starters that will leave you satisfied but craving more. You can also discover a wide variety of other Moroccan cuisine at the restaurant. www.leriad.lu

Words ABIGAIL OKORODUS Photos ROMAIN GAMBA & GUY WOLFF

2 Caftan The unique ambiance at Caftan will take you right to the heart of Moroccan culture. The restaurant’s menu, koul--which means ‘to eat’ in Moroccan Arabic--comes in five bowls that have been adapted to vegetarian and non-vegetarian preferences. It’s up to you to choose from the chicken, beef, falafel and other options. www.caftan.lu

e

Four e v

Pierre Adam, owner of Café Bel Air

tine en al

“Customers want a good time… good food and atmosphere, good beer for your swine.” and t v n

NOVEMBER JULY 2022 2021

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e of Afric t s a Ta

3

saveursdusenegallux

Relish the wine selection and bubbles from South African estates.

Taste of Africa is a family business based in Moutfort that offers premium wines from South Africa to private clients in Luxembourg.

The business has been in operation for almost two decades.

The wholesaler also offers olive oil and Méthode Cap Classique bubbles--South African champagne.

The wine comes from about 28 different estates in South Africa and can be purchased in-store, online or at various wine events in Luxembourg. www.toawines.com

Uva Mira

No one visits Senegal without a taste of the national dish, ­thieboudienne--meaning rice with fish. The restaurant also serves dishes like chicken yassa and ­peanut butter sauce (mafé), which are popular in the region.

Photo

Les Saveurs du Sénégal

Welcome to the Club

Business Club

JULY 2022

46

In numbers

Flashback Your events

1,100

COMPANIES The number of company members of the largest business club in Luxembourg.

19,000 MEMBERS

The number of individuals who are part of the vibrantly active Paperjam + Delano Club community with whom you will get to interact.

250

EVENTS The number of opportunities to network and learn, split into 120 shows, talks, social events and 130 advanced trainings, workshops and webinars.

300

A series of inspiring events took place at the Club over the past few weeks.

During our latest Delano Live, Philip Crowther, an international journalist renowned for his reporting in six languages, spoke about multilingualism and multiculturalism in front of more than 200 people.

We would like to thank Prolingua and ING for their support during this event.

Inclusion and diversity were the central themes of the last 10×6 event: 10 inspiring stories presented issues and solutions through powerful testimonials.

We thank again Alter Domus and Sodexo, without whom this event could not have taken place, and our partner, IMS.

“Now, imagine, at the third of your life, you have to hide who you are...”

Marc Angel European Parliament

HOURS

The number of annual training hours for your employees to develop their hard and soft skills: an additional benefit for you and useful extras for your teams.

3

HOW TO ATTEND PAPERJAM+ DELANO CLUB EVENTS ?

You’re already a member Please check the Club section on our website paperjam.lu. Select, among all the digital and on-site events listed, the ones you would be interested in, fill in the registration form at the bottom page and register.

You’re not a member yet Please email the Paperjam+Delano Club via club@paperjam.lu and an account manager will be in touch to introduce you to all the perks offered by the largest business club in Luxembourg.

“I’m a woman of colour...”

Fatiha Charti

State Street

1

Delphine Berlemont (ING)

2 Bárbara Daroca (ING) 3 David Sibaud (Reckinger Alfred) 4 Gérald Mangin (Widoo)

47

Programme June /July Tuesday 28 June

JULY 2022

10×6

10×6: Up your skills!

TIME 18:30 - 22:30 VENUE Kinepolis Kirchberg SPONSORS SD Worx, Luxembourg For Finance, Cap Langues Wednesday 6 July CEO COCKTAIL 1

2

CEOs- & EntrepreneursOnly Cocktail Summer Edition

4

TIME 18:30 - 22:30 VENUE The British Ambassador’s residence SPONSOR Rcarré

“For any story I cover, I try to get the Luxembourg angle.”

Thursday 14 July

4

Photos

3

Eva Krins et Marie Russillo

Philip Crowther Associated Press’ Global Media Services

Delano Live + Meet the ­community: The Ultimate Luxembourg Quiz TIME 18:30 - 20:30 VENUE Zulu SPONSOR ING

Sign up on the Paperjam + Delano Club site: club.paperjam.lu

011 BY MIKE K N2 OE DI DI DE

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48

JULY 2022 EDITION

JULY 2022

PUBLISHING DIRECTOR

Bérengère Beffort EDITORIAL DEVELOPMENT DIRECTOR

Editorial Phone (+352) 20 70 70-150 E-mail news@delano.lu JOURNALISTS

Teodor Georgiev (-158) Aaron Grunwald (-152) Tracy Heindrichs (-164) Jeffrey Palms (-156) Cordula Schnuer (-163) Josephine Shillito (-153) COMMUNITY MANAGER

Christophe Lemaire

Nathalie Reuter EDITOR-IN-CHIEF, DELANO MAGAZINE

Publisher

Natalie Gerhardstein (-154) EDITOR-IN-CHIEF, DELANO DIGITAL

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Abigail Okorodus (-155)

Brand Studio Phone (+352) 20 70 70-300 E-mail brandstudio@maisonmoderne.com DIRECTOR

www.maisonmoderne.com Phone (+352) 20 70 70 E-mail publishing@maisonmoderne.com FOUNDER, CHAIRMAN AND CEO

Mike Koedinger ADMINISTRATIVE AND FINANCIAL DIRECTOR

PROOFREADING & FACTCHECKING

Youcef Damardji

Etienne Velasti

Maison Moderne

STRATEGIC BUSINESS DEVELOPMENT ADVISOR

PUBLISHING DIRECTOR

PHOTOGRAPHY

Romain Gamba Guy Wolff Matic Zorman

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Bérengère Beffort

HEAD OF MEDIA SALES AND SOLUTIONS

STRATEGIC BUSINESS DEVELOPMENT ADVISOR

Dominique Gouviaux (-338)

Francis Gasparotto

COMMERCIAL ASSISTANT

DIRECTOR AD INTERIM, BUSINESS CLUB

Céline Bayle (-303)

Mike Koedinger

MEDIA ADVISORS

CHIEF DIGITAL OFFICER

Nicolas Galtier (-318) Mélanie Juredieu (-317) Virginie Laurent (-322) Aline Puget (-323) Léo Santoro (-335) Mikaël Spezzacatena (-326) HEAD OF CONTENT STRATEGY

Emmanuelle Thivollard CREATIVE DIRECTOR

Jeremy Leslie STUDIO MANAGER

Sandrine Papadopoulos

Viktor Dick HR MANAGER

Sylvie Notarnicola ADMINISTRATIVE MANAGER

Sylvia Leplang DIGITAL PROJECT MANAGERS

Meryem Alamy & Antonello Di Pinto DISTRIBUTION MANAGER

Quentin Marenic IT MANAGER

Matthew Dixon

ART DIRECTOR

José Carsí LAYOUT

Sophie Melai (coordination), Elina Luzerne, Juliette Noblot

To contact staff members

ILLUSTRATIONS

Salomé Jottreau

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Pick’n’mix

50

Celebrating national day

Brandy Bishop

Julie Ellman-Brown

Monica Louie

Frédérique Fayet

LUXEMBOURG RESIDENT SINCE 2018

LUXEMBOURG RESIDENT SINCE 2015

LUXEMBOURG RESIDENT SINCE 2017

BORN IN LUXEMBOURG

We like to get together with our Luxembourgish neighbours for a barbecue and decorate with small Luxembourg flags.

We normally arrange to meet up with friends, then we all head off to the city for food and drinks. We then watch the amazing fireworks.

Every year, I watch the fireworks and pretend it’s happening because of my shared birthday with the grand duke!

Before the pandemic, I spent the day before the national holiday celebrating a friend’s birthday.

And then, on the day of the national holiday, I was recovering from the party.

How’s Luxembourg’s national day compared to other national days?

One of my favourite holidays is the US independence day on 4 July, having friends and family over for a barbecue. It’s similar here.

In the UK, we don’t have a national day; there are usually celebrations for royal weddings or, like this year, the Queen’s jubilee.

I celebrate the Fourth of July in the US, and it’s filled with barbecues and fireworks, like in Luxembourg. My favourite part of ‘Nationalfeierdag’ is the annual torchlight procession.

I have not yet had the opportunity to celebrate other national holidays in other countries, so, unfortunately, I have no comparison. But that might change next year.

How did the evening of 22 June feel during the pandemic?

It didn’t feel the same, but we tried to celebrate in our own way at home with sparklers. We are looking forward to renewed celebrations with friends.

It was very strange during the pandemic; every day felt the same, so national day didn’t feel any different.

I think because of that, people will make a special effort this year.

It was unfortunate that we were not able to have the same events as previous years, so it was definitely quieter than usual.

What is your fondest national day memory?

The first couple of years after we arrived, our son was too young to watch the fireworks.

We look forward to this year’s celebration.

The year my youngest son came to visit with his girlfriend. They thought the fireworks were amazing and really enjoyed the atmosphere.

Eating a lot of food and drinking crémant with friends and family-I am looking forward to having a large gathering this year!

I don’t have any specific memories… but I’m always very happy to be able to meet up with my friends to celebrate this event together as we should.

National day is a chance to celebrate all the reasons we love living here--and hopefully meet the grand-ducal family in the process.

This is a holiday that can be spent with family or one’s closest friends over a barbecue or a leisurely stroll.

What does national day representto you?

It’s a celeb ration of ­Luxembourg culture, pride and its rich history.

It reminds me of the fortunate opportunity I have to live in such a beautiful, safe, welcoming country.

National day represents celebrating one of the many traditions of Luxembourg.

I think it’s great that the grand duke and his family keep up this tradition; long may it continue.

I must admit I was very disappointed not to have been able to celebrate the national holiday in recent years.

Provided by participants, Sam Flammang, Shutterstock

How do you celebrate national day?

Photos

JULY 2022

Three expat residents and one Luxembourger share their experiences and traditions of celebrating national day.

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