Posts

LPEA ANNUAL REPORT 2016

Annual Report Report 2016

Index

Introduction

Private Equity & Venture Capital in Luxembourg

About LPEA

2016 – A Year in Review

Priorities for the Future

Membership

Financials


Dear Members of LPEA,

Dear readers,

2016 brought about abrupt political changes that will have consequences on the private equity and venture capital industry. We entered the new year with more questions than answers on the possible futures ahead of us.

First, the UK’s vote to leave the European Union is a major setback in an unprecedented 60 years history of  European economic integration. It stands out as an event which will have rapid repercussions on the British economy, the European single market, but also on the strong interactions that the Luxembourg private equity and venture capital industry has had with the UK’s financial industry and investors.

Second, the unexpected election of Donald Trump as President of the United States further raises the level of uncertainty. How will Trump’s actions impact the political, regulatory and economic environment in which our members do business, both in our region and across the US? Trump’s promise to deregulate could facilitate business in the US and seems to bode well for GPs with investment activities there. However, Trump’s protectionist speech might spur already growing populist/nationalistic movements in Europe and make things worse in the long run for Europeans.

With increased uncertainty comes higher risk and opportunities for the most discriminate investors. This moment is also an opportunity for Luxembourg to become an even more diversified and important global PE hub, with a greater presence of front offices from some of the greatest managers. In just a few years, LPEA has managed to grow from a handful of members to more than 140 by the end of 2016.

In an environment of low interest rates and increased political and regulatory risk, Private Equity and Venture  Capital funds provide not only the fuel of economic growth (growth financing to companies of all sizes) but also high returns to investors. Our industry can only grow in importance since it stands out as a force of economic progress, job creation in the real economy and innovation, but also as a highly desired alternative for investors. Indeed, the ability to spot opportunities and to take risk will continue to define successful GPs in the future.

The role of LPEA remains unchanged: remind stakeholders of our industry’s positive role and importance for the real economy, uphold the dialogue with all relevant public authorities, ensure the competitiveness of Luxembourg as Private Equity and Venture Capital hub, and defend a favorable tax and regulatory environment in Luxembourg and the European Union for PE-VC firms.

As an industry body we should not conclude without underlining that that the Luxembourg Government has been greatly supportive of our industry’s growth. A whole set of initiatives aims at accelerating Luxembourg’s foray into the forefront of Europe’s most progressive and innovative countries, for the benefit of the whole population. From a public commitment to join the Third Industrial Revolution based on Jeremy Rifkin’s recommendations, to a visionary push into FinTech and Space Mining– things are moving forward in the Grand-Duchy.

Jérôme Wittamer

President

Dear Members of LPEA,

Dear readers,

Private Equity and Venture Capital continue to be much coveted asset classes in times of low interest rates, at the same time as they are much coveted sources of company financing for small and medium-sized companies in Europe. PE/VC finances the backbone of our economies, drives innovation and gives millions of people in the world a job. Not everyone is aware of these important facts – hence our mission to promote our industry and create a favourable environment for PEVC activity in Luxembourg and beyond.

In light of our goal to make Luxembourg the prime onshore centre for Private Equity in the world, I can say with confidence that we have had a very fruitful year 2016. LPEA has had a most active year when it comes to international roadshows and national events, increasing our visibility and informing stakeholders both abroad and at home about the advantages of Luxembourg as a PEVC hub and also about the growing importance of the Luxembourg PEVC industry. In times of uncertainty due to Brexit and a changing international tax environment, we made sure to be heard, but also to listen to the concerns of our Members and stakeholders.

The past year also proved the flexibility and reactiveness of the Luxembourg legal and regulatory environment in accommodating our industry by bringing about a new unregulated vehicle in the field of alternative investments, the RAIF, and by reforming the national Company Law to improve the means at hand for company financing and structuring deals from Luxembourg. The “Luxembourg toolbox” keeps on growing and accommodating our industry.

These legislative changes have been inspired by industry stakeholders who are directly impacted by them. I would like to thank our Members who participated actively in elaborating our industry’s position for the Government in the working groups within LPEA’s technical committees. Your dedication has been invaluable in improving the business environment in which we all work and in increasing the reputation of LPEA.

Despite challenges that lie ahead such as the uncertainty that arises with the United Kingdom leaving the  European Union, I am very optimistic that we will be able to turn problems into opportunities, continue attracting global PEVC players to Luxembourg and continue creating the best possible environment for all our Members.

Paul Junck

Managing Director

LPEA’s Annual General Meeting (8/05/2017)

LPEA’s Annual General Meeting

8/05/2017



Guest speaker: Mario Grotz from the Ministry of Economy of Luxembourg presented the Space Resources initiative.

LPEA held its ordinary statutory meeting on May 8th 2017 in the auditorium of Bank de Luxembourg.

The members received the Annual Report for 2016, approved the audited accounts of the association, discharged the auditor and the members of the Board for the year 2016.

The budget for 2017 was also approved with an estimated growth of revenues of 11% and surpassing now €600.000.

There was no place for elections given that the current Board was elected in 2016 with a mandate lasting until the AGM of 2018.

The AGM welcomed the participation of Mario Grotz from the Ministry of Economy who presented the Space Resources initiative conducted by the Luxembourg government. The speaker tried to seduce the PE/VC audience to join the long-term effort which is being put in the development of this new cluster. Space mining is by many compared to the ambitious goals of SES in the 1980s when it started to explore the satellite and communications industry. Today SES is a case study and if well supported, Space Mining may as well be one in the future.



PHOTOS



AGM: Venture Capital plays a key role in the future of the Luxembourg economy

AGM: Venture Capital plays a key role in the future of the Luxembourg economy

PRESS RELEASE

9/05/2016

 

AGM: Release of the preliminary results of the GP Survey 2016 and election of new Board of Directors

OLYMPUS DIGITAL CAMERA
The private equity community met today in Banque de Luxembourg for the annual general meeting (AGM) of the Luxembourg Private Equity & Venture Capital Association (LPEA). The external speaker invited for this year was Nicolas Buck, Entrepreneur and Chairman of Fedil who highlighted the role of private equity players in Luxembourg’s growth and especially that of local venture capitalists which can find fertile ground in areas such as ICT, Industry 4.0, Eco Tech, Circular Economy or Social Impact.

The event was also the occasion to release the preliminary results of the GP Survey conducted by LPEA. The survey, a project conducted by the Market Intelligence Committee, collected the opinion of 40 general partners and limited partners operating in Luxembourg and provided an update to the previous survey conducted in 2014. The survey reports that Luxembourg remains a very attractive place for the PE business, even though stability and the tax environment attractiveness have decreased. The main risk to the participant’s business in Luxembourg is the changing tax environment (BEPS) and the reputation of Luxembourg as a financial centre, although the majority of respondents believe Luxembourg being well positioned to deal with regulatory developments.

Jérôme Wittamer (President) and Paul Junck (Managing Director) presented the association’s activities held in 2015 and emphasised the association’s annual growth with an increase of membership from 119 to 132. A summary of the activities held and an updated profile of the association are available in the Annual Report 2015 which is available here.

The AGM elected the 31 Board members that will represent the association in the next two years and which constitute a balanced representation of the two constituencies: PE and VC managers (full members) and service providers (associate members).

For additional information please contact LPEA’s Managing Director Paul Junck on
lpea-office@lpea.lu / +352 28 68 19 – 601.

Pictures Gallery

LPEA Annual Report 2015

LPEA Annual Report 2015


Index



Introduction

Private Equity & Venture Capital in Luxembourg

About LPEA

2015 – A Year in Review

Priorities for the Future

Membership

Financials


DOWNLOAD (PDF)

pic_Jerome-Wittamer

by Jérôme Wittamer, President of LPEA

From dropping oil prices to negative interest rates, socially impacting migrant crises to the perpetuation of the sovereign debt crisis and inflation of buyout prices, nothing seems to have remained unchanged in 2015. The new year promises ever new changes. Where will all the dry powder deploy? Will it continue to propel Enterprise Values in coming months? Who will connect the wall of money with opportunities in the SME sector? While the ECB policy might offer short-term answers, the EU Commission’s Capital Markets Union (CMU) might hold some longer term clues.

With the right measures in place, capital mobility stands to increase within the region, fostering competition and fuelling growth and jobs. In summary, Europe is likely to improve from a cross-border capital markets perspective. The opportunity to inspire change is in our hands.

It is our role at LPEA to embrace these opportunities and collaborate with fellow associations and Invest Europe to make sure the right policies are implemented. We must continue to outline the critical role played by Private Equity investors and the substantial amounts of positive energy our industry has continued to deploy since 2015, contributing to making our companies more successful, and ultimately making this world a better place.

As banks deleverage, they provide fewer loans to companies, especially to SMEs. The role of Private Equity/Debt funds is therefore critical in that respect as our industry acts as a vital source of financing for SMEs. Private Equity collaborates significantly with commercial companies and businesses supporting innovation, building competitive industry leaders, creating hundreds of thousands of jobs across the world and cooperating with management teams to create value for all stakeholders. Our industry is therefore a real force of economic progress, a force that must be reckoned with.

In addition, ours is an interconnected world in which borders are disappearing. Opportunities are no longer limited by location, and investors increasingly go wherever they must in order to seize them. This operational and economic reality contrasts with the political views of countries vying to capture value locally through antiquated systems.

The fact that Private Equity fund managers from all over the world manage money on behalf of pension funds, insurance companies, sovereign wealth funds and large corporates must not be forgotten, because the majority of these investors are institutional investors who manage our populations’ savings and pension money. We owe it to these investors to maximise value.

In this context, the role of LPEA is to maintain a continuous dialogue with all relevant authorities, remind stakeholders of our industry’s role and positive impact, and ensure that Luxembourg maintains a global perspective on the activities of Private Equity operating from Luxembourg and continues to defend tax neutrality of both funds and intermediary companies. On the basis of our conversations, LPEA is confident in our government’s determination to establish an image that is more in sync with the new reality, thus helping Luxembourg to remain among the most competitive nations.

Paul-Junck by Paul Junck, Managing Director of LPEA

Today, Private Equity continues to grow as an asset class and represents a diverse industry comprising activities ranging from buyout to direct lending. For that reason, Prequin, a market leader in the collection of private equity-related data, has for the first time introduced the concept of “Private Capital”, which aims at better representing the wide spectrum of the closed -end funds industry.

Luxembourg is no different, and among our members we find an increasing diversity of strategies and interests. Such variety reflects different needs and that is why we have also seen new regimes and structures picking up international interest.

In a financial centre driven by cross-border activities, LPEA is conscious of its role in promoting the sector abroad. As stated in the LuxFin 2020 strategy document endorsed by the Minister of Finance Pierre Gramegna, our objective is to become the prime onshore centre for Private Equity; an ambitious move but one consistent with our efforts and those of our members who regularly join us as speakers, sponsors or attendees in our roadshows abroad.

I am truly confident that what we have achieved over the past five years is just a glimpse of what is still to come. After building the founding blocks of our credibility with a representative membership base, 2015 saw our international presence becoming more visible and regular as we returned to key markets and deployed a set of new communication tools.

Having just moved to the House of Finance, the centre of the financial industry’s associations, we expect to continue following the right path. This will start by expanding our team with a new resource in 2016 focused on legal and regulatory matters, and by making the conditions for our technical committees even more efficient.

I take this opportunity to thank our technical committee members for all their dedication and to emphasise that these structures remain open for any member willing to embrace a more active role within the association.

I look forward to celebrating another five years in this exciting community!

Activity Report 2014

LPEA Annual Report 2014

Year in Review


Summary



Luxembourg has set an ambitious agenda to attract Private Equity houses to provide more middle-office related services from Luxembourg, in particular with regard to increasing substance requirements and AIFMD-related
regulatory standards.

Out of the 10 largest Private Equity houses worldwide, 9 are doing business out of Luxembourg. Most have started by leveraging the advantages that Luxembourg holding companies provide when structuring Private Equity acquisitions. But business interests have since driven more substance to Luxembourg. This originally discrete business with little local presence in Luxembourg has fundamentally changed as Private Equity houses have been enhancing their presence in Luxembourg by establishing or ramping up operations and other capabilities.

A clear trend toward enhanced transparency and regulation drove Luxembourg to respond by introducing the regulated private equity and venture capital vehicle SICAR in 2004 and the SIF in 2007 which, in retrospect,
anticipated many of the legal requirements that were introduced in the Alternative Investment Fund Managers Directive (“AIFMD”) in July 2013.

Combining flexibility in legal and tax structuring, a reputable and stable financial environment and efficient infrastructure has brought hundreds of Private Equity participants, both established and emerging, to set up some or all of their Private Equity structures in Luxembourg.


SLIDESHARE


DOWNLOAD (PDF)