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Private equity at the heart of the economy

Private equity at the heart of the economy

Featured in Duke 08, 22/03/2017



For 7 years, the LPEA has supported the development of a major industry within the Lxuembourg economy. Its President Jérôme Wittamer analyses its prospects to mark the first “LPEA Insights – 360 GP View” conference organised by the association.

The aim of the LPEA INSIGHTS – 360 GP VIEW conference is to demonstrate that the LPEA is a major player within the sector, by inviting family offices, wealth managers and private bankers to our event and to understand our investment strategies. Since the 2008 recession, Luxembourg’s private banking sector has evolved towards high-end asset management, in which private equity plays an increasingly significant role. It is important to make the link.

How would you assess the LPEA‘s performance since it was founded?

When it was founded in 2010, the LPEA had about 20 members. Since then, Luxembourg has become the European hub for private equity. This established the association’s international credibility. The expertise of our committees has enabled us to fulfil our threefold mission: to represent, promote and protect the activities of our 140 current members. Our strategy is focused on two levels:

1. At a national level, we show the Luxembourg political world the opportunities which this sector offers. We suggest tools and solutions to be implemented on the legislative side to ensure that Luxembourg is competitive and welcomes industry players. Our constructive proposals have made it possible to improve the existing legislative, regulatory and fiscal framework regarding the competitiveness of the financial market.

2. At an international level, we’ve promoted the Luxembourg industry in major financial cities including London, Zurich, Munich, Paris, Stockholm and New York. This has led to the creation of a number of reports on the subject. This intense promotion has paid off: private equity is currently the country’s most flourishing industry. Each year, a growing number of players open offices here. Moreover, it’s a very positive industry because it invests 100% in the economy. Lastly, we’ve also invested in training through our collaboration with the House of Training and the University.

What are the prospects for the “private equity – venture capital” sector in Luxembourg today?

They are excellent. Brexit has created unbearable uncertainty for players in the UK, a country in which a considerable part of the European private equity industry has been concentrated until recently. Luxembourg offers stability and favourable regulation. This allows industry professionals, who are making decisions for 10-year funds, to focus on developing their business.

A recent article in the Financial Times highlighted these different aspects. The article recognised our work and had a very positive impact as this newspaper has an influential effect in our industry, especially when it quotes references within the sector such as Carlyle and Blackstone. News about large private equity groups opening offices in the country and the development of existing groups are sure to follow. At the same time, our competitors aren’t resting on their laurels: we must continue to act.

You are organising the first LPEA Insight conference in April. Why?

Surprisingly, our industry is more visible abroad than in Luxembourg. The aim of the “LPEA INSIGHTS – 360 GP VIEW “conference is to demonstrate that the LPEA is a major player within the sector, by inviting family offices, wealth managers and private bankers to our event and to understand our investment strategies. Since the 2008 recession, Luxembourg’s private banking sector has evolved towards high-end asset management, in which private equity plays an increasingly significant role. It is important to make the link.

What are the expectations of members and individuals who contact the LPEA? 

Expectations differ, depending on the members’ profiles. “GPs” – General Partners – ask us to defend their interests at national and European levels. They express their concerns about regulatory, legal and tax issues and are actively involved in improving the sector. Meanwhile, service providers seek to participate in the development of the sector through specialist committees, to develop their network, to find out more information and to promote their company. They also want to be involved in the evolution of a growing industry in Luxembourg.




Private equity invests 100% in the economy.



Surprisingly, our industry is more visible abroad than in Luxembourg.


The Luxembourg Private Equity community celebrated the New Year

The Luxembourg Private Equity community celebrated the New Year

Recent news strengthen the country’s position as leading European PE Hub.


The members of the Luxembourg Private Equity and Venture Capital Association (LPEA) gathered yesterday (30/01) evening in Luxembourg City to celebrate the New Year.

The party was the occasion to pass the previous year in review, make a few announcements, disclose the association’s objectives for 2017 and have some fun.

The spirits were high with the news circulated last week that Carlyle and Blackstone, two major private equity firms, were shifting more of their operations from London to Luxembourg, a sign that the country is well-positioned in the post-Brexit competition for this industry and is increasingly recognised as a leading PE hub.

This is precisely what LPEA aims to showcase with its landmark event “LPEA Insights: 360 GP View” to be held in Luxembourg on April 26th and announced during the evening. The local landscape continues to expand at an accelerated pace, forming a growing community of new players and operations which shift the market towards greater middle and front office activities.

Paul Junck, Managing Director of LPEA, summarised the activities and achievements of 2016 highlighting the growth of the association and its international promotional activities held in key markets such as the UK, the US, Germany, France and Switzerland.

With 139 members today, evenly split between investors/ general partners and service providers, LPEA continues to grow and to strengthen its position as an active voice in Luxembourg’s financial sector. A voice that will soon be better supported with a newly hired Public Affairs Manager.

Regulation will be on top of the agenda according to Jérôme Wittamer, President of LPEA, “in a context of mounting uncertainty and unexpected political events, we see opportunities for Luxembourg to further solidify its competitive edge while keeping an eye on the darker clouds on the horizon”.

Within the regulatory agenda, Luxembourg private equity is actively following a number of key subjects:

      • The AIFMD review, due to start later this year and for which LPEA will create an ad hoc working group of the Legal Technical Committee to address the issues that have been identified as critical for the industry.
      • As MLD IV is due to come into force in June 2017, it has become apparent that the implementation is very burdensome for certain firms. The Legal Technical Committee will therefore assess the significance of MLD for member firms.
      • As regards the EuVECA/EUSEF regulation, there have been negotiations from the Council and the European Parliament. LPEA has collaborated with ALFI to produce a common position paper to be sent to the EU Parliament.
      • The tax agenda is heavy with BEPS and European initiatives such as ATAD becoming more and more a reality.
      • Other national points such as the withholding tax, carried interest and VAT on directors’ fees.

Keeping an attitude of constructive dialogue, LPEA intends to further increase the number and quality of its conversations with all stakeholders, both locally and abroad.

As Wittamer puts it “LPEA will be busy again and with your support, make the Luxembourg ecosystem ever more competitive”.

Wishing all the Private Equity/ Venture Capital community a successful new year!

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For additional information about LPEA contact paul.junck@lpea.lu or call +352 28 68 19 – 602.

About LPEA

The Luxembourg Private Equity and Venture Capital Association (LPEA) is the representative body of private equity and venture capital professionals in Luxembourg.

With 139 members, LPEA plays a leading role in the discussion and development of the investment framework and actively promotes the industry beyond the country’s borders.

Luxembourg disposes of a stable tax regime and is today at the forefront of international PE regulation providing a flexible, secure, predictable and multi-lingual jurisdiction to operate in.

LPEA provides a dynamic and interactive platform for its members to discuss and exchange information and organises working meetings and networking opportunities on a regular basis.

If Luxembourg is your location of choice for private equity, LPEA is where you actually join the industry!


Jérôme Wittamer

President of LPEA

Capital V #2

Capital V #2

The magazine of LPEA – 2H 2013


Summary



AIFMD Remuneration: Exceptions make the rule

Interview: Julien Kinic, IDI Emerging Markets

Akuo Investment Management

SecureIT: How Luxembourg got in the data centre map

European Investment Fund – Social Impact Accelerator Fund

Setting the stage for niche-based Biomedicine

Bringing substance to Luxembourg

The expat education conundrum


CONSULT


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