Ocorian, a specialist provider of alternative fund services and entity administration, fiduciary and compliance solutions, has announced that Luxembourg will be the “key beneficiary” of a return to more “normal” transaction levels in the private equity funds sector cementing its position as the leading real asset fund domicile.

Ocorian expressed its confidence that the rise of new sources of capital through the European Long-Term Investing Fund (ELTIF) and real assets structured as UCI part II funds will add to the momentum in Luxembourg next year as the jurisdiction recovers from the global private equity slowdown of the past twelve to eighteen months.

McKinsey’s Global Private Markets Review 2023 showed the number of buyout and growth deals above $500 million fell by a third last year after record highs in 2021 and 2020 leaving high levels of dry powder hitting firms’ ability to go to market for new capital.

According to Ocorian, which manages over 15,000 structures on behalf of over 6,000 clients globally (including fundraising by funds with an ESG aspect), Luxembourg saw some bright spots. The jurisdiction’s early adoption of ESG also made it the “go-to” destination for Article 8 and 9 funds.

The jurisdiction was supported by its continuing attraction to global managers looking to establish an onshore presence and the scale of the sector. At the end of last year, nearly half of private capital funds invested in Europe-based assets were in Luxembourg, Ocorian noted.

Paul Spendiff, Head of Business Development, Funds Services at Ocorian, said: “Luxembourg remains the jurisdiction of choice for investment managers targeting Europe and further afield. There’s no longer just a private equity focus, and private debt has grown substantially over the last five years as has the number of infrastructure funds. We now have multiple strategies involved across the industry so we have diversification of the portfolio in Luxembourg.”

Ocorian said that private equity fund managers are looking for partners which can provide a full suite of services in order to simplify operations and lower costs. It pointed out that Luxembourg is home to a wide range of firms with multi-lingual AIFMs, depositaries, fund administrators, lawyers and consultants.