By Natalia Koltunovskaya for AGEFI
The Private Equity (PE) sector in Luxembourg grows every year following the worldwide tendency and the expectation is for this growth to continue. According to PwC, PE is “the rising star” of alternative assets and is expected to represent half of the market by the 2025 with stable growth of 10% per year.
Although it is difficult to estimate the exact number of PE professionals in Luxembourg for the moment, the market is very dynamic and features roles as different as accounting, risk management, portfolio management, legal advisory, among many others. Gathering the statistics data about all people in PE remains one of the most important challenges, which when finally overcome, will add more understanding and transparency to the sector.
The LPEA (Luxembourg Private Equity & Venture Capital Association), being the representative body of PE in Luxembourg is constantly tracking the sector’s job offers and in the recent months of August and September the total amount of vacancies featured in the main job portals ranged between 900 and 950, dropping only by 10%, compared to the beginning of the year in a pre-Covid scenario.
Considering the impact of Brexit and the fact that the majority of the top private equity houses worldwide have structures in Luxembourg, the demand for new talents in PE firms and the service providers firms related to the field is stably growing.
Despite some little shakes, mergers and acquisitions, the companies show stability and continue to look for professionals to hire this year. Nonetheless, there are several questions raised about the necessity to attract highly skilled candidates to Luxembourg. What can Luxembourg offer to those experts working in London or Paris and having it all?
Attracting young talents to Luxembourg can be arduous. Even though Luxembourg seems like a safe harbour, there are several things which can tip candidates off. Some might say that life expenses in Luxembourg are very high. Consider for example paying a megapolis amount of money for a tiny apartment, one of Luxembourg’s main social issues today. Other aspects may turn challenges into opportunities like the chance to learn new languages in your workplace.
While jobs in PE still pend towards more back office and middle office functions, it is clear that more front office activity is emerging in the country which in itself represents an opportunity for foreign professionals to show their skills still evolving in the existing PE community. With Brexit coming to a final stage, more and more companies are moving to Luxembourg helping it to develop the decision-taking and deal-making leading roles.
Being a smaller and a very dense community, Luxembourg gives you a chance to succeed in your career easier and faster than in other financial hubs. On top of that, Luxembourg, in the end, is all about finance. Professionals within the same practice end up knowing each other and opportunities arise all year long.
Constantly growing, Luxembourg always require new blood to integrate in its financial sector, and so does the PE sector. And though we bring more and more international people here every year, there are thousands of experienced professionals we can find locally, but many of them need to be further educated in order to fit the PE market.
To address this challenge, in August 2020 the LPEA started facilitating the access to new professionals, in particular new graduates, by sharing their profiles with the associations’ members. This is expected to attract young candidates to the asset class. Many of these applicants are coming from abroad and looking for their first work experience. This summer, the LPEA also launched its first Academy, a set of beneficial and constructive training courses that despite the virtual format welcomed nearly 100 participants from across the industry. A second edition will be held in March 2021, again delivered by local and international practitioners which is critical to open the veil of the mystery on how PE is made in Luxembourg without losing the connection to the best international practices.
Working in private equity requires skills. A simple overnight change from another financial area is not that simple. Apart from the LPEA Academy, there is a growing number of options for professionals to get or develop this particular knowledge. House of Training offers a short course in Private Equity Fundamentals, Sacred Heart University, together with LPEA, offers a 2-month intensive PE course which is part of a larger Private Equity Certificate. Other firms such as Arendt & Medernach or PwC, also offer a comprehensive programme of training among which several modules relevant to the PE practice and often with a more technical (eg. regulatory/ legal/ tax) perspective. It remains important to note that across the existing training opportunities, teaching is delivered by some of the best professionals in the field who share their knowledge and real examples to showcase the peculiarities of all the alternative investments and the challenges which they face on daily basis.
Saying all that, we believe that Luxembourg is on the right track to continue to attract and develop skilled resources and to consolidate its role as a hub in the global PE landscape.