Luxembourg fund industry grows to more than €3.7trn in assets

Luxembourg’s fund industry continues to grow apace, according to a recent study by Monterey Insight.

The research company found that Luxembourg-domiciled funds boasted more than 3,977 billion US dollars (3,771 billion euros) in assets under management (AUM) in 2016, a 3% increase compared with the 3,857 billion dollars reported in 2015.

State Street retained its top ranking as the largest administrator by total net assets, with $703.2 billion, followed by JP Morgan Bank ($548.8bn), BNY Mellon ($304.5bn) and BNP Paribas ($285.6bn).

Among fund managers, the largest promoter or initiator of Luxembourg-domiciled schemes was JP Morgan ($294.6bn), followed by Deutsche Asset Management ($176.5bn) and BlackRock Financial Management ($145.5bn).

As has been the case for much of the past decade, JP Morgan Bank had the largest proportion of assets under custody, at $761.7 billion, ahead of State Street ($704.7bn) and Brown Brothers Harriman ($331.2bn).

This year, for the first time, Monterey Insight added a transfer-agent ranking, led by State Street, with a total of $555.8 billion in assets and 1,503 funds.

RBC Investors Services Bank followed in second place with $489.5bn in assets, and JP Morgan in third, with $382.5bn.

PwC defends leading auditor position

In the auditors category, PwC maintained its lead, auditing 5,878 sub-funds, ahead of KPMG (3,359) and Deloitte (2,629).

For legal advisers, Arendt & Medernach was able to maintain first place by number of funds (3,788), just ahead of Elvinger, Hoss & Prussen (3,346).

Looking at market share by total net assets, however, Elvinger, Hoss & Prussen was able to defend its top ranking, as has largely been the case for the last 10 years.

As with the year previous, equity funds accounted for the lion’s share (29%) of total fund assets in Luxembourg at $1,145.7 billion dollars, followed by bond funds, which increased in number to 3,018, and in assets to $1,140.8 billion, up from 2,940 and $1,077.4 billion.

Cash products were also on the rise, growing by 8%, while alternative investments grew by 5%.

Over the course of 2016, 1,591 funds were launched with total assets of $149 billion, representing an increase of 9% compared with the previous year.

For these newly launched funds, the top sectors were traditional investments such as global bonds and global mixed equities bonds, with total assets of $86.6 billion, accounting for 58% of assets launched in 2016.

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