In the past 10 years, global private equity assets under management (AuM) have doubled. Over the same period in Luxembourg, private equity AuMs have quintupled. In a recent survey of 640 Luxembourg-regulated private equity funds conducted by Deloitte and the Association of the Luxembourg Fund Industry, AuMs had reached €88.5bn.
The private equity landscape in the Grand Duchy is predominately populated by funds of €100m or less but in recent times, a rise in the number of large funds (i.e. those over €500m) now sees them represent over 4% of the total. Indeed, in terms of fund houses themselves, of the 10 largest worldwide, 9 are doing business out of Luxembourg. And this really is worldwide, not just Europe, as North American private equity houses represent 8% of Luxembourg’s total private equity holdings.
The country also plays host to some 500 fund servicing companies such as central administrators, domiciliary agents, law firms, auditors, consultants, depositaries, management companies, and a host of fintech players, creating a very dynamic business environment. These financial sector players create an hub that offers a full range of services required by private equity funds, including fund structuring, VAT services, global fund distribution, human resource services, transfer pricing, investor reporting, capital market accounting advisory services (CMAAS), risk management, responsible & ethical Investment and banking services.
A flexible and varied “toolbox” for fund domiciliation
Luxembourg has shown itself to be an ideal jurisdiction for structuring private equity acquisitions and...