Private Equity’s growth plans in Luxembourg
Luxembourg for Finance (LFF) released the LuxFin2020, a vision for the development of the Luxembourg Financial Centre.
The document is a commitment to build on Luxembourg’s core strengths, seize opportunities and support innovation in other, newer sectors of the financial services arena. However, LuxFin2020 is, above all, a public statement on the 3 principal objectives guiding the financial services industry:
1- To develop further as a centre of excellence in cross-border finance by consolidating and developing Luxembourg’s expertise in cross-border financial services;
2- To be the EU onshore financial hub of reference by expanding Luxembourg’s role as the European location of choice for global financial services providers and
3- To become a digital leader in Europe, notably by fostering innovation and becoming a leader in digital financial services.
The objectives of the industry are too those of the private equity and venture capital sector.
The Luxembourg private equity industry’s goal is to become the prime on-shore centre for private equity by 2020, building on the strong foundation of asset management know-how, the availability of a broad range of investment vehicles and regulatory expertise.
More specifically, the industry has the ambition of increasing GP presence in Luxembourg. Having seen a continuous inflow of mid market private equity houses in Luxembourg, the industry also aims to attract a private equity ‘mega fund’ to further increase the centre’s international reputation.
Factors that will drive the industry’s expansion in Luxembourg include the European Investment Plan (“Juncker Plan”), innovation in financial technology, BEPS, as well as a positive global M&A activity. The industry sees particular potential for growth in investment activities in the areas of impact finance, infrastructure, energy, mid market, debt, venture capital and FinTech. The Luxembourg private equity industry also expects the sector to further expand its back and middle offices in Luxembourg.