Luxembourg’s ManCos show resilience amid difficult market conditions

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In April, PwC published its 6th annual Management Company Observatory Barometer, the results of which show that despite the challenging year faced by asset managers in 2020, Luxembourg retains its role as one of Europe’s leading financial services jurisdictions.

ManCos continue to draw the spotlight in Luxembourg, with regulation driving demand. Over the last year, the pandemic has created unforeseen challenges for asset managers and their providers alike, placing increasing pressure on relationships, both within team and with clients as well as upon digital infrastructure.

The recent regulations within the Environmental, Social and Governance (ESG) space have made it imperative to monitor, disclose and improve ESG data in the investment process for asset managers. Consequently, ManCos have developed to provide oversight of a fund’s ESG policies.

PwC’s Management Company Observatory research found that:

  • Luxembourg ManCos remain dominant in Europe, 40% of the Top 50 EU ManCos Assets under Managements (AuMs) are managed by Luxembourg ManCos;
  • AuMs managed by Luxembourg management companies rose more than 4% to €4,158m
  • Continued success for the Alternative Investment Fund Manager (AIFM), with almost all new entrants this year having AIFM licences. There were 11 new AIFMs, with the number of Super ManCos remaining stable.

Our subsidiaries FundRock and LRI Invest S.A. (LRI), have been named as among the leading Third Party Management Companies (“ManCo”) and AIFM by PwC’s 6th annual Management Company Observatory Barometer.

Jointly, FundRock and LRI have been confirmed as the largest third party ManCo service offering in Luxembourg and were ranked as follows by PwC’s annual Management Company Observatory Barometer:

  • #1 overall
  • #1 UCITS
  • #2 AIF

LRI Invest

Apex subsidiary, LRI Invest S.A. (“LRI”), a leading provider of ManCo services, again showed consistent growth in Assets under Management over the last year and now is Luxembourg’s fourth largest Third Party AIFM, sixth largest AIFM and in the top five for unregulated AIFs according to PwC’s Management Company Observatory Barometer.

Utz Schüller, Managing Director, LRI Invest SA commented: “We are delighted by this continued recognition by the industry as the leading Third Party ManCo and AIFM services offering in Luxembourg’s robust and growing sector. This latest report from PwC shows the resilience of these structures during the market challenges of the last year, and sets a positive outlook for AIFM, UCITS ManCos and Super ManCos based in the Grand Duchy, and in 2021 and beyond.”

FundRock

One of the key sector trends has been greater consolidation to form stronger players which have the resources to operate at scale. Apex has been part of this storyline and, following through on the acquisition of LRI in 2019, added to its ManCo capabilities with the acquisition of FundRock in early 2021.

FundRock is the leading manager for Third Party UCITs and second for Third Party ManCos. The business is also the 18th largest ManCo overall, 11th when combined with LRI and is fifth for Third Party AIFMs, and ranks in the top ten for AIFMs.

These numbers from December 31, 2020, pre-date the recent strong momentum of the FundRock business in early 2021. In recent months, FundRock has received regulatory approval to support third country asset managers distribute their funds across the EU region, surpassed the milestone of €100bn AUM, as well launched its French private equity and real estate AIFM, which will assist international and domestic professional investors in accessing French investment vehicles.

Xavier Parain, Head of FundRock adds: “2020 was a milestone year for FundRock and prepared the foundations for us to become part of the Apex Group in early 2021 and reach the milestone of €100bn assets under service across more than 450 funds. With our new distribution capabilities and expansion into the French market, we look forward to building on our existing suite of leading ManCo solutions. Apex’s broad breadth of services and geographical presence gives us further strength and support as we continue to expand and evolve our client service offering.”

Our Management Company Services

Luxembourg is a key investment jurisdiction in Europe and the hub for our single-source solution, enabling us to deliver a full suite of services across fund, financial and corporate solutions. With over 600 people based locally in Luxembourg, it is also the home of both our Management Company (“ManCo”) and Banking subsidiaries.

We can streamline your operations in a cost-effective manner by offering third-party Management Company (ManCo) services which can be complemented with fund administration, middle office, banking, depositary and custody services all under one roof.

We provide ManCo services through our subsidiaries, FundRock and LRI, two fully authorised Super ManCos with a long-standing reputation.

To find out more about our services, talk to us today.

The full findings of this year’s PwC Management Company Observatory Barometer can be viewed at:  https://www.pwc.lu/en/asset-management/management-company.html

 

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