Luxembourg continues to see ManCo success
In June, PwC published its 7th annual Management Company Observatory Barometer, the results of which show the important contribution of both ManCos and licensed AIFMs to Luxembourg’s thriving financial services industry.
Despite a challenging market environment and a rapidly evolving sector, ManCos have demonstrated remarkable resilience, adapting their business models and seeking out business opportunities created by regulatory change.
Luxembourg is a key investment jurisdiction in Europe and sits at the core of Apex Group’s single-source solution. With over 1,000 people based locally in Luxembourg upon close of the planned acquisition of Sanne and Maitland, it is also the home of both our Management Company (“ManCo”) and Banking subsidiaries. Our ManCo proposition allows asset managers to streamline their operations in a cost-effective manner by delivering third party ManCo services, supplemented by a range of administrative, middle office, banking, depositary and custody services delivered through the wider Apex Group.
Key findings of PwC’s Management Company Observatory research include:
- Assets Under Management (AuM) managed by Luxembourg management companies rose more than 22% to €5,314bn.
- Continued success for the Alternative Investment Fund Manager (AIFM), almost all new entrants this year have AIFM licences with 13 new AIFMs and number of Super ManCos remaining stable.
- UCITS assets reported a 16% increase while AIF assets grew 41% year-on-year.
Jointly, Apex Group companies FundRock and LRI Invest S.A. (“LRI”) have been confirmed as the largest Third Party ManCo service offering in Luxembourg and here, we consider some of the drivers of their growth over the last year.
Apex subsidiary, LRI Invest S.A. (“LRI”), a leading provider of ManCo services, again showed stable AuM over the last year and remains in the top ten list of Third Party ManCos.
Utz Schüller, Managing Director at LRI Invest comments: “This latest report from PwC continues to recognise the important role of Apex Group companies in Luxembourg’s competitive and growing ManCo sector. We look forward to supporting the continued development and innovation of the ManCo sector and are excited to be a part of the positive outlook for the fund ecosystem in the Grand Duchy, in 2022 and beyond.”
FundRock remains the leading Third Party ManCo and for Third Party UCITs by AuM. In addition to these top rankings, the business is also the fourteenth largest Luxembourg ManCo overall and ranks seventh for Luxembourg AIFMs. FundRock is fourth for Third Party AIFMs.
Interestingly, this year, reflecting accelerated market focus on ESG, and the important role that ManCos play in ESG compliance, the Barometer now includes rankings on management of sustainable assets. FundRock ranks in the Top 5 of a new table – ‘Top ManCo managing Article 8 and 9 products (AIFs only)’. These categories will be “ones to watch” in future editions, as managers grapple with the risks associated with ESG data collection, the inconsistencies across sustainable finance frameworks and the cost implications of complying, reporting and analysis of data.
FundRock has continued its strong growth momentum since joining the Apex Group in early 2021, announcing notable client wins including appointment by Royal London to provide Management Company and Distribution Services, as AIFM to NRP Maritime Asset Management’s Premium Maritime Credit Fund and selection of FundRock France AM as the management company for the "Fonds Obligations Relance France".
This month, Apex Group announced the acquisition of the ManCo business of Maitland, adding additional substance and skilled experts to our Luxembourg ManCo offering. Meanwhile, FundRock has also announced the continued organic expansion of subsidiary FundRock Distribution with regulatory approval secured to launch of a new location in the Netherlands.
Xavier Parain, Head of FundRock remarks: “As part of Apex Group, our local substance in Luxembourg, combined with our global connectivity presents a compelling solution for asset managers. As such, over the last year our assets under management grew by over 30% to €134 billion. We look forward to announcing further additions to the geographic presence of our distribution business which will help our clients to tackle the increasingly complex regulatory requirements of cross-border fund distribution and will enable them to raise assets more efficiently and effectively, with the highest standards of governance and regulatory compliance.”
The ManCo sector is thriving in Luxembourg, which continues to provide a supportive financial services ecosystem underpinned by a robust regulatory framework.
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