GP Survey 2018

May 2018

The Luxembourg Private Equity and Venture Capital Association (LPEA) presents the conclusions of the 4th biennial GP Survey collected among the general partners (private equity and venture capital fund managers) operating in Luxembourg.

The survey, conducted by LPEA’s Market Intelligence Committee between January and March 2018, reflects the views of 55 GPs, 46 of which members of the LPEA. The survey covered private equity firms established in Luxembourg without distinction of strategy and size. All input has come from on-line questionnaire and interviews conducted by the members of the committee.

Private Equity firms have massively voted with their feet. Market data is unambiguous, Luxembourg is Europe’s leading Private Equity hub and the de facto standard for the industry.

Jérôme Wittamer, President of LPEA

Every year Luxembourg demonstrates its leadership role as Private Equity hub in Europe. The result of the GP Survey shows an increasing number of vehicles and Managers setting up in our country

Andrea Montresori, Chair of the Market Intelligence Committee of LPEA and Director of PwC Luxembourg

EXECUTIVE SUMMARY

The private equity industry has experienced significant changes coming from regulatory developments and new legislation, as well as a changing tax landscape. This has modified the business model of many actors in the market.

This PE survey has provided feedback on how Luxembourg is perceived to react to these developments as a fund location and structuring jurisdiction.

The outcome of this report is the result of numerous interviews with general partners, from which we concluded the following key messages:

  • Luxembourg is reinforcing its leading position as an alternative fund location. Its large offer of different vehicles (RAIF, SLPs, etc.) attracts various type of PE Houses;
  • Despite BEPS and AIFM regulations which have impacted the administrative burdens across Europe, Luxembourg continues to enjoy a stable political and tax environment and is perceived as a significant hub;
  • The success of competitive vehicles such as the RAIF and the SCSp has made Luxembourg flexible and it is now welcoming small and medium size players making the country no longer exclusive to big players;
  • Good talent pool of qualified people. Continued training and education remains key to stay competitive and to attract new professionals into the sector;
  • Service providers need to increase their competitiveness and focus their pricing model through value adding services;
  • Brexit is favoring Luxembourg as primary location for new AIFMs in the continent.