Luxembourg is an important part of the Apex Group’s push to offer a single, end-to-end hub for financial fund and corporate solutions. Regional Head, Pierre Weimerskirch explains the growing offering and highlights key trends for 2023 and beyond.

Apex Group’s goal is to offer the full range of financial fund and corporate solutions to leading global clients across multiple jurisdictions. “We offer a comprehensive suite of services that give clients choice as they seek operational efficiencies while improving governance and reducing costs,” said Weimerskirch.

Founded in Bermuda in 2003, the firm has 80 offices in 40 countries employing more than 10,000 people worldwide. These figures were boosted when Apex Group bought the global fund services provider Sanne bringing with it 2,000 global clients and increasing its workforce by one-third. This was the latest of 30 global acquisitions completed by the Group with the aim to grow the firm’s footprint and broadening its service offering.

Powerful service offering

Sanne had significant operations in the Grand Duchy with 250 staff, and through this acquisition bolstered Apex Groups position to become one of the top three asset management services providers in Luxembourg. Weimerskirch, a managing director at Sanne was also a co-founder of the leading AIFM LIS. In the new combined business, there are 1,200 staff working in Luxembourg, which is half the group’s European workforce. The Luxembourg operation has more than €500bn assets under service with around 2,500 funds served.

The group has an entrepreneurial approach, and remains forward looking for new growth areas,
Pierre Weimerskirch

Pierre Weimerskirchregional head of APEXAPEX Group

Apex Group offers the full range of financial, fund and corporate solutions with a complete suite of services ranging from banking, full custody, depositary and ManCo services to fund administration, corporate and business services and are this able to meet the full needs of our clients. Given the criticality of technology, we invest heavily in this area to support the sustainability and growth of our business and our ability to offer clients the best-in-class service offering. The digital banking solution is the latest enhancements to our platform will and ensure we continue to provide innovative solutions for clients.

“The group has an entrepreneurial approach, and remains forward looking for new growth areas,” Weimerskirch said. “The target is for double digit growth globally and in Luxembourg.” The group is also focused on innovation, in terms of new products, how to address new client segments, and process improvement.

Advanced ESG support

A trend that is highly relevant now, is understanding a firm’s Environmental, Social and Governance (“ESG”) Rating. “This raises the prestation what ESG means in terms of fund strategy: what options do you have to position your fund if you want an article eight, or article nine product, and as a leading service provider in this space we assist our clients to identifying what are these criteria,” Weimerskirch explained.

Our ESG offering is an integral part of our single-source solution model. “The rating and advisory services provide tailored ESG analysis on a project-by-project basis, using benchmarks to assess the performance of funds, while highlighting any gaps while tracking performance over time.” Then there are the reporting requirements for fund investors and regulators to ensure alignment with ESG strategy and regulation.

Demand driven by Europe and Luxembourg

“Traditional alternative managers are adding ESG strategies because they want to have a broader set of funds to offer to LPs, and particularly newer managers are launching impact funds,” Weimerskirch commented. He added that European LPs appear to be more open to balancing financial returns with fulfilling ESG criteria.

He is excited about the chance to make a positive difference in this key developing domain. “Luxembourg, with its size and industry importance, really has a unique opportunity as market leader to drive ESG forward and make a positive impact in the industry,” he said.

Financing of the transactions has become a bit more difficult with banks partially withdrawing from the market and interest rates increasing
Pierre Weimerskirch

Pierre Weimerskirchregional head of APEXAPEX Group

Reassessing the market

In the current difficult macro-economic environment LPs are reconsidering their private equity investment strategies, with choices becoming a bit more complex. “Valuations of underlying projects generally have been quite stable so far, but we're probably going to see the impact in Q4 2022 and the beginning of 2023,” said Weimerskirch. This compares positively to public markets which have fallen quite substantially over the last six to nine months.

“Financing of the transactions has become a bit more difficult with banks partially withdrawing from the market and interest rates increasing”. “This presents an opportunity for credit funds if banks are less inclined to provide leveraged finance on the transaction side.” Another promising avenue is the secondary private equity fund market, with some LPs seeking liquidity.