Private Equity in Luxembourg today

29.10.2018 | Interview with Rajaa Mekouar-Schneider, Chairwoman of LPEA

How can Luxembourg become THE hub for Private Equity?

Luxembourg is already the hub for Private Equity funds and investment companies. It has taken a pioneering role over the past 10 years, by offering all kinds of investors a suitable toolbox to domicile, structure and manage their investments. In fact, Luxembourg is home to 95% of the world’s top 20 funds.

What has been changing most recently, on the back of increased compliance and substance requirements, is the fact that more and more of those investors are beefing up their presence in Luxembourg and adding investment capability to their teams locally. This is welcome as this kind of progression from what is commonly called “back office” to “front office” creates positive externalities for the marketplace.

The PE industry in Luxembourg is also lucky to benefit from a supportive public private ecosystem like LFF and a pragmatic government who understands the crucial contribution of PE to the job market and tax revenue.

We need to keep innovating and adapting to ever changing market needs as PE grows more diverse, complex and simply put, more mainstream…

Above all, we need to spread the word of how unique and favourable it is to be based in Luxembourg for PE investors and practitioners in general. While remaining humble and low profile Luxembourg must build on LFF’s international initiatives that showcase the quality, depth and efficiency of the marketplace.

What are the biggest items on the LPEA’s agenda right now? 

The LPEA is focused on being the go-to entity for investors and PE service firms contemplating a move towards Luxembourg. This means we are beefing up resources able to answer queries and develop a more active drive towards prospective members from abroad but with a local presence.

The association also wants to remain at the forefront of the industry development, which means staying atune to new future trends, hence the launch of a new group or Technical Committee (there are 8 of them at LPEA), on ESG and another dedicated to Single Family Offices.

On the tax and legal fronts we are collaborating increasingly with Invest Europe, our EU umbrella association.

Last but not least LPEA has recently initiated a new discussion with ABBL to understand the needs of the private bankers present in Luxembourg, just as PE is reaching the top of their agendas, because clients are more and more interested in the asset class.

All these efforts will culminate for our stakeholders in the next (3rd) edition of LPEA Insights, our conference series focused on the actual business of PE. We will hold it again at The Philharmonie, on the 19th of March 2019. More details can be found on www.lpeainsights.lu.

What is the PE industry in Luxembourg doing to prepare for a potential Brexit.

As mentioned earlier we see increasing interest from PE practitioners to establish or boost presence in Luxembourg.

This is of course exacerbated by the looming Brexit, which forces UK based firms to draw contingency plans whatever the exit scenario ends up being. Symbolically, we recently held a workshop in London at the National Gallery, which attracted the largest number of participants ever, 200+, and triggered many comments and queries from investors and advisors alike.

This means we are increasing resources and focus to deliver suitable solutions and advice to those asking us, with a clear stance: Luxembourg is a partner of the UK when it comes to PE, not a substitute, and we do not expect firms to leave London altogether but rather to extend a leg into Luxembourg. Either way we work hand in hand with LFF to offer a seamless support to the industry.