New findings from the 28th edition of the Monterey Insight Luxembourg Fund Report, as compiled by Monterey Insight, the independent fund research company, reveal the market shares of all services providers in Luxembourg’s funds industry.
Please note all findings below include regulated funds (SIFs, UCITS/UCIs and SICARs) unless indicated otherwise as at 31st December 2021.
The total net assets for regulated collective investment funds domiciled in Luxembourg increased from US$6,145.3bn in 2020 to US$6,685.3bn in 2021. This represents an increase of 8.8% in US Dollar or equates to a Euro increase of 17.1%, from €5,022.5bn in 2020 to €5,879.0bn in 2021.
Regulated funds (UCITS, SIFs and SICARs) enjoyed a steady increase of asset value of 18% for UCITS, 13.9% for SICARs and 13.8% for SIFs. This is slightly lower than the previous year.
For unregulated funds, the RAIFs have the greatest increase totalling €290.9bn of assets representing a 84.4% increase compared to 2020. During the same time, LuxLPs & SOPARFIs reached €413.3bn, a 73.8% increase of assets.
The overall number of regulated funds and sub-funds reached 14,404 in 2021, showing a small decrease compared to the previous year. However, the unregulated funds show some of the best performance with an increase of 27.7% coming to 4,175 funds and sub-funds.
In more detail, RAIFs registered an increase of 33.7% in the number of sub-funds active during the year, reaching 2,045 funds and sub-funds. LuxLPs and SOPARFI combined numbers of funds and sub-funds reach 2,130 which represents a 22.4% increase compared to 2020.
In terms of products, as was the case in the previous year, for regulated funds, equity fund products are once again the most popular by AUM €2,114.8bn exceeding bond funds which have assets of €1,469.7bn.
The funds and sub-funds newly launched as at 31st December 2021 reached €104.5bn with 873 regulated funds and sub-funds. Looking at the overall numbers and including unregulated products, the new business reached €165.6bn with 1,571 funds and sub-funds.
EU SFDR data, newly reported as of 31st December 2021, across all types of Luxembourg funds (regulated and unregulated), revealed 600 sub-funds were listed under Article 9 with €302.9bn of assets and 3,740 sub-funds under the Article 8 totalling €2,301.4bn. Interestingly out of the newly launched funds, 28.0% were launched under article 8 and 5.8% under Article 9. The figures when looking at newly launched regulated Luxembourg funds only, reach 38.5% under Article 8 and 8.7% under Article 9.
Non-domiciled funds, another new addition to the Monterey Luxembourg Fund Report in 2021, totalled €664.6bn with over 1,350 sub-funds.
Turning to the service providers, for fund manager companies, the top two positions remain unchanged with the largest promoter/initiator of Luxembourg regulated domiciled schemes being J.P. Morgan (€420.4bn). Amundi secures second position (€238.2bn) with BlackRock rising to third position (€221.7bn). DWS International follow closely in fourth position with €218.9bn
Amongst the Luxembourg located ManCo/AIFM rankings of regulated schemes, J.P. Morgan Asset Management (Europe), as has been the case for several years, retain their top position with total net assets of €419.2bn followed by BlackRock who soar up to second from fifth place €220.6bn. DWS Investment drop one place to third position with €218.4bn and UBS Fund Management (Luxembourg) follow closely in fourth position with €216.0bn.
Philippe Ringard, Managing Director and CEO of JPMorgan Asset Management Europe S.à r.l. in Luxembourg:
“Luxembourg remains a critical hub for excellence in cross-border UCITS investment solutions, as well as the industry-leading provision of Alternative Investment Funds. We are proud of our longstanding heritage in Luxembourg and look forward to continuing to support our institutional and retail clients with investment solutions that meet their needs, across Europe and internationally, in the years to come.”
This year again State Street maintain their lead position for all the three rankings of fund administration, custody and, together with IFDS, transfer agent.
The top positions remain unchanged for fund administration ranking: State Street is first by total net assets (€1,226.9bn) followed by J.P. Morgan Bank in second position (€938.1bn) and BNY Mellon (€402.3bn) ranked third ahead of CACEIS (€379.6bn) in fourth.
Riccardo Lamanna, Country Head of State Street in Luxembourg:
“With asset servicing at the core of our business, we are proud of our market leadership in fund administration, custody and transfer agency services in Luxembourg. Our leadership position shows our dedication to the Grand Duchy’s asset services industry and our continuous efforts supporting our clients’ cross-border funds. We remain committed to offering best in class solutions to our clients, strengthening relationships with leading global asset managers and owners, and enhancing our capabilities and scale, with an aim to realize our ambition of being clients’ first choice of front-to-back partner.”
Amongst custodians/depositaries, State Street again secure this year the top position with the largest proportion of assets under custody totalling €1,233.8bn, followed by J.P. Morgan Bank with €1,090.6bn and in third position Brown Brothers Harriman (BBH) with €456.5bn. BNP Paribas follow in fourth position with €451.4bn.
Looking at transfer agents ranking, there are no leading positional changes since last year: IFDS / State Street top the rankings with €1,193.0bn of assets followed in second position by RBC Investor Services Bank with €692.2bn. CACEIS maintain their third position with €463.1bn ahead of J.P. Morgan Bank with €420.5bn.
Amongst audit firms, as has been the case for several years, PwC maintain their lead in auditing with a total of 6,179 sub-funds, ahead of KPMG with 2,832 sub-funds. EY keep their third position with 2,683 ahead of Deloitte with 2,139 sub-funds.
Oliver Weber, Partner and Asset and Wealth Management Leader at PwC Luxembourg,says:
“2021 was a year marked by the ongoing strong development of markets in terms of inflows and valuations. But a year can make a difference... Catalysed by the Russian invasion but with many other underlying factors at play (supply chain disruptions, de-globalisation trends), our real economies and financial markets must now cope with rising inflation, a tightening of monetary policies from the major central banks of the world, and the increasing risk of recession.
Overall, since 2020, the world has been affected by multiple crises, meaning that navigating uncertain waters has become the new normal. At PwC, we have successfully managed the COVID-19 crisis, embracing challenges with change while always keeping a strong link to our clients in and outside of Luxembourg. We also have successfully digitalised many of our market activities. Particularly with a view on sustainability, we see the opportunities and the responsibilities that we have. While Luxembourg has already taken a leading role in ESG for the global asset management sector, PwC has been supporting all our major clients in extending their product range to alternative and sustainable assets. We brought, and continue to bring, integrated and holistic solutions to our clients."
For legal advisers, Arendt & Medernach maintain their lead by number of funds with 4,330 sub-funds) followed by Elvinger Hoss Prussen with 3,422 sub-funds. As in previous years, Elvinger Hoss Prussen is in first position by the total amount of net assets with €1,850.5bn and Arendt & Medernach in second position with €1,801.9bn.
Gilles Dusemon, Partner, Investment Management at Arendt & Medernach:
This year the world has witnessed new challenges both economically and socially with adverse impact felt across all corners of the Globe. Working in challenging markets, we see investors and sponsors adapt their strategies and accelerate their focus on responsible investing that brings with it a multi-faceted, long term positive impact. Within this context we are looking forward to helping our clients embrace change, deliver beneficial strategies and assist them in navigating the emerging tax, legal and regulatory landscape that continues to develop at a rapid pace. We thank our clients for their continued trust in our advice and guidance, which has made us once again the leading funds legal advisor in Luxembourg
Karine Pacary, Managing Director, Monterey Insight, commented:
“In our 28th edition, we are pleased to share the new results of the Luxembourg fund industry in our Monterey Luxembourg Fund Report 2022. The Luxembourg fund industry has shown again its resilience and has once again demonstrated strong growth in 2021, driven by the attractiveness of UCITS but equally by the sustained popularity of the RAIFs and other unregulated products.
In the 2022 edition, we introduced two new enhancements: data on EU SFDR classifications and non-domiciled funds. We are proud to have accomplished substantial EU SFDR coverage on regulated funds of over 84% and over 73% on regulated and unregulated funds. It is encouraging to see the enthusiasm around sustainable investing when looking at new business launched during the year. In the current context of the energy crisis and environmental challenges, we can only see this trend becoming the new norm driven by the quality of services and of the regulatory environment. It is still early days to draw any definite conclusion on sustainable investing, especially with energy security challenges ahead and the divergence of ESG ratings, but it is pleasing to see this transformation occurring.”
Please note the figures listed above include UCITS, SICARs and SIFs unless indicated otherwise.
For more information, please contact: Karine Pacary, Managing Director, Monterey Insight. Tel. +44 (0)845 625 3863, Email: karine.pacary@montereyinsight.com
Notes to Editors
^ For LuxLPs and SOPARFI, we have included schemes which we believe are classified as an investment fund product, especially focusing on those with an appointed AIFM. However, RAIFs and unregulated Luxembourg Limited Partnerships are excluded from the table rankings below.
Monterey Insight is an independent fund research company that provides comprehensive statistical analysis of the Luxembourg, Ireland, Guernsey, Jersey and UK fund industries: the only complete reference of service providers for all funds serviced in these jurisdictions.
As at 31st December 2021, leading service providers for Luxembourg funds were as follows (the below ranking includes SIFs, UCITS/UCIs and SICARs):
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