EY Luxembourg today published the 2017 edition of its technical guide “Investment Funds in Luxembourg”.
The Investment Funds in Luxembourg guide is designed to answer many questions related to the constitution and operation of investment funds in Luxembourg, with this year’s edition also including the latest legislative and regulatory updates.
The guide deals with how the investment fund industry is expected to achieve a relatively modest growth rate of around 4-5% of its assets over the next four to five years. This growth will be fuelled by several factors: the ever-increasing need for long-term savings due to demographic change, an increased demand for more sophisticated savings products, the need for asset management expertise relating to different stages of life, the accumulation and decommissioning of assets as well as asset diversification in an environment of expected low rates in the medium term.
The guide also discusses how the various impediments to this growth, such as the growing trend of certain asset holders to manage their assets more internally, the withdrawal of a significant amount of assets by sovereign wealth funds, the reduction of defined benefit plans not replaced at the same rate by defined contribution schemes and a lower tendency among younger generations to save.
In addition to the factors that will influence growth over the next few years, the industry faces various specific challenges, including fee reduction and decline in operating margin, the cost / benefit ratio and implications for active management, digital and new technologies and the implementation of the regulatory agenda.
More information on these issues is available in the guide itself, available for download at the EY Luxembourg website: ey.com/lu.
