Luxembourg funds industry slumps for first time
Assets under management in Luxembourg funds dropped for the first time in 2008, according to data provider Lipper.
Assets under management in Luxembourg funds dropped for the first time in 2008, according to data provider Lipper.
The company’s 15th annual review of the landlocked European state’s investment funds industry showed a decline of almost 30% on 2007 levels, from just over $3trn to $2.1trn.
With only a handful of exceptions, assets fell across asset classes and fund structures. ETFs and money market funds were among the few areas to experience asset growth. The latter rose by 16% to $561.9bn and ETFs by 59% to $32.0bn.
Ed Moisson, director of fiduciary operations at Lipper, said: “Half of the decline in fund assets took place in September and October, highlighting that the financial crisis was the key factor affecting the industry. Around 80% of the overall asset fall was due to market performance, rather than investor withdrawals, which provides some hope that as the markets recover, so too will the Grand Duchy’s fund assets.”
Other key findings from the report included:
• The number of funds rose from 10,971 to 12,102 — an increase of just over 10%. Lipper said this highlighted that there is still sustained interest in Luxembourg as a jurisdiction, even during such turbulence in financial markets.
• JPMorgan Bank maintained its position as the largest fund administrator by total net assets (US$ 300.7bn), with RBC Dexia and Fastnet in second and third places.
• For professional firms, PricewaterhouseCoopers audited the most funds at 5,337. Among the legal advisers, Arendt & Medernach was just ahead of Elvinger Hoss & Prussen by number of funds, however, Elvinger Hoss & Prussen has maintained its leading market share by total net assets.
• Specialised Investment Funds (SIFs) contributed US$179.6 billion in 1,712 funds. This total was slightly down on last year’s figure (US$ 205.4bn), but still up on that for funds under the previous law (US$ 104.7bn in 2006).