PLACE FINANCIÈRE & MARCHÉS — Fonds

contribution - Alfi

The convergence between public and private markets



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Rajaa Mekouar-Schneider, CEO de LPEA et Claus Mansfeldt, chairman de LPEA. (Photo: Maison Moderne)

Private equity funds have faced similar challenges to those of traditional asset classes, as regulatory pressures have increased since the financial crisis of 2008.

To counter the cost and administrative burden caused by this, the industry has had to be even more innovative and forced to focus more on efficiencies and value creation than ever before. The public markets savings industry has also been very innovative in terms of creating cost competitive access products, such as ETFs. Access, especially for retail, however remains difficult in private markets and is a key challenge, as well as an opportunity, for the private markets players going forward.

Irrespectively, the advent of technology tools to streamline the value chain of private equity has been an integral part of the success that marked the industry, as AuM and dry powder continue to be on the rise on the back of sustained relatively high returns. 

It is more crucial than ever that the entire Luxembourg ecosystem follows suit and delivers sustainable solutions to the industry. 
Rajaa Mekouar-Schneider

Rajaa Mekouar-Schneider,  CEO,  LPEA

At the same time, the largest private equity firms blur the frontiers between private and public markets as they drop their private partnership statuses for public corporate shareholding structures (like EQT’s anticipated IPO later this month) and invest increasingly in listed companies, whilst, conversely, some fund managers have been moving into the private equity space (e.g., BlackRock, with its recent launch of the long-term private capital, a long-term capital investment fund). 

Luxembourg, as a major hub for European and global asset managers, is well positioned to lead the way on many levels, particularly now regarding notably distribution-related issues, cross-border and across investor categories. For private equity specifically, the looming – hard – Brexit has brought renewed focus on the Grand Duchy while the EU-­ centric and onshore nature of our ecosystem encourages private equity firms already present to boost their local operations. This means it is more crucial than ever that the entire Luxembourg ecosystem follows suit and delivers sustainable solutions to the industry. 

From ESG standards via gender equality to passporting, joining efforts to foster our positions can only create positive impact and enhance performance.
Claus Mansfeldt

Claus Mansfeldt,  chairman,  LPEA

Put all together, these trends call for increased cooperation between the public and the private asset management industries to come up with common best practices when it comes to tackling fundraising, compliance/KYC and distribution issues. From ESG standards via gender equality to passporting, joining efforts to foster our positions can only create positive impact and enhance performance.

The ALFI conference series are a great platform to debate these topics in a pragmatic yet conceptually innovating fashion, hence the LPEA’s full support of them.

More news on the fund industry in  Paperjam’s Alfi  supplement.