Luxembourg for Finance CEO Reflects on First 100 Days in Office

Chronicle.lu recently had the opportunity to speak with Tom Théobald - in a rare local interview - about his first 100 days as CEO of Luxembourg for Finance (LFF).

Tom Théobald assumed the role of LFF CEO on 1 September 2024, after his appointment was announced in March this year. He succeeded Nicolas Mackel who was appointed Luxembourg's Permanent Representative (Ambassador) to the European Union.

Chronicle.lu: When you took over the reins as CEO of Luxembourg for Finance in early September, what were the main priorities for you then?

Tom Théobald: I was lucky to take over the reins of a well-oiled machine, supported by a fantastic and motivated team, and to have the full support from my Board, including the Chairman, [Finance] Minister [Gilles] Roth. In a way, this role also feels like a return to my roots, since I had been working side-by-side with Nicolas Mackel as his Deputy CEO before joining the Ministy of Finance in 2019. During that time, I was also part of the transformation that LFF has undergone over the years. At the Ministry, my role was also focused on business development and involved working hand-in-hand with LFF.

Since September, among other things I have worked with the team to present my action plan for 2025 to the Board. Rather than a revolution, I would say this plan represents more of an evolution. Across our core activities - communcations, events and business development - the main priorties are to strengthen Luxembourg's position as a stable hub for global investors and financial institutions, position the financial centre as a key element of a future Savings and Investment Union, support ongoing efforts to continue climbing up the value chain, and enhance Luxembourg's role as a hub to mobilise capital for a more sustainable, resilient and innovative global economy. This is being carried out in collaboration with the Ministry as well as industry stakeholders and associations.

Chronicle.lu: In your first 100 days of office, what do you feel you have achieved

Tom Théobald: It's certainly been a busy 100 days. Since September, we've visited multiple markets, including ministerial missions to Milan, New York, Singapore and Tokyo. In addition to managing relationships with leading international financial institutions and firms that are present in Luxembourg, we have engaged with dozens of firms about potential projects in Luxembourg. It is central that we keep Luxembourg on firms’ radar, so that when they consider expanding operations, either for new activities or to establish a European hub, they consider Luxembourg. Thanks to the competitiveness agenda of the government, we certainly have a good momentum now.

In terms of press work, I've travelled abroad every month since September to meet with international media. Interviews such as this one to a local media are, in fact, more the exception than the rule, as our primary press engagements are outside of Luxembourg. Besides our various online conferences, including a first successul Digital Finance Forum, we've been actively engaging with universities abroad to promote Luxembourg as a destination for top talent.

Chronicle.lu: Now you are three months in the position, and you have a better insight (more hands-on) into the workings of the LFF, have your priorities changed in any way?

Tom Théobald: No, my vision for where we need to go remains clear. However, it's important to always reassess, experiment and evolve - nothing should be set in stone.

Personally, I thrive in a collaborative environment and prefer working as part a team. Rather than starting from a blank page, I'm at my most creative when sitting in a room with others, exchanging ideas and developing concepts together. I do this with the team for every major project or initiative. I also regularly exchange with my colleagues from the associations and key stakeholders in the financial centre to soundboard ideas and priorities.

Chronicle.lu: What do you feel are the main challenges for Luxembourg's financial sector/centre heading into 2025?

Tom Théobald: Luxembourg's open economy is heavily influenced by global market conditions, and this is certainly the case for the financial centre. We are navigating a phase of continued global uncertainty. While the IMF predicts relative sluggish global growth next year, markets remain robust, as reflected in the strong AuM growth of our fund industry. This highlights the external factors that can impact our financial sector, both positively or negatively.

However, one of Luxembourg's key strengths is its diversified financial centre. Not only in terms of the number of pillars, but also the diversity within them. For example, while most people think of Luxembourg as a private banking hub, in reality the largest segment in our banking industry is corporate banking today. Similarly, non-life insurance has grown significantly since Brexit, and now accounts for around a third of our insurance industry in terms of premium income.

The challenge of course is that we therefore also need more, and different, profiles today than we did ten years ago. So as we head into 2025, attracting talent will remain a key priority. The government's initiatives, such as the attractive expat regime or the measures for young employees, are invaluable in addressing this need.

Chronicle.lu: With political changes in both the UK and the US, how do you see these affecting Luxembourg (positively/negatively) in the year ahead?

Tom Théobald: The US and the UK are the largest markets for Luxembourg’s financial sector. The US fund promoters account for approximately 20% of AuM in Luxembourg funds. Additionally, Luxembourg is the UK's largest partner for the export of financial services, representing 6.5% of UK exports in this sector - ahead of Ireland and France, and second only to the US globally.

While it is certainly far too early to predict any impact of the recent political changes, Luxembourg will continue to build on its strong political and economic ties with both countries. Importantly, as competence centre for cross-border financial services and champion of an open EU single market, Luxembourg remains a key ally for both the US and UK and their globally operating firms.

Chronicle.lu: With the European Commission President Ursula von der Leyen advocating less regulatory restrictions, what does this mean for Luxembourg's financial sector moving forward?

Tom Théobald: I hope the Commission will heed the lessons from the Letta and Draghi reports and move towards streamlining regulation. The proof is, however, in the pudding.

There are many low-hanging fruits when it comes to enhancing the EU's financial competitiveness, including addressing national goldplating, reducing regulatory complexity, and eliminating redundant reporting requirements. It is equally important that efforts to boost EU competitiveness do not result in EU navel gazing. The EU must remain an attractive market for global firms and ensure continued connectivity to international capital.

The strategic question is whether we aim for a larger share of shrinking pie or focus on growing the pie. When LFF promotes Luxembourg abroad, we are simultaneously promoting the European Union as a market. And I can tell you, the EU has been a tough sell in recent years. Let's hope that the Commission has recognised this as a wake-up call. Luxembourg certainly has everything in place - a comprehensive toolbox offering expertise in fund structuring, wealth management, leading securitisation framework, innovative finance tools, and strong sustainable finance products and expertise. This is all backed by our stable regulatory framework, world-class infrastructure, and skilled multilingual workforce.

Chronicle.lu: In which component of Luxembourg's financial sector do you see most growth in 2025?

Tom Théobald: We need [to] consolidate our expertise across all sectors while continuing to climb up the value chain. This means focusing on high-added value activities.

Without a doubt, private assets will remain a significant driver of growth. Luxembourg now accounts for approximately 60% of AuM in alternative funds in Europe, up from 15% only a decade ago. There is also strong growth potential in active ETFs in Europe, where Luxembourg is well-positioned to capture a significant share of that market as the leading UCITS hub and competence centre for active funds in Europe.

In an era of global instability, Luxembourg is uniquely positioned to support firms, investors and families in managing and mitigating global risks - be it through our wealth structuring and succession planning expertise, captive reinsurance or pioneering securitisation.