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LPEA

The future of private equity is... Luxembourg



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The future of private equity is… Luxembourg (LPEA)

The private equity (PE) industry has gone through exceptional growth over the past decade with assets under management doubling to over $4 trillion, while the amount of dry powder (i.e. funds raised not yet invested) reached record highs as investors committed over $700bn to PE firms in 2018 alone.

This is mostly driven by the outperformance of PE when compared to listed equities: the average PE fund delivered +8.2% in 2018, while virtually all major public market indexes experienced double-digit annual declines. Abundant liquidity combined with investors’ quest for yield in volatile markets compounded the attractiveness of PE. This comes on the back of diversification of PE strategies, expanding fund sizes for most global funds and growing diversity of investor types entering PE.

Luxembourg definitely rides on this wave with an increasing number of regulated entities beefing up presence in the Grand Duchy as regulatory pressure mounted since 2013, with the promulgation of the AIFMD across Europe and more stringent OECD requirements in terms of substance, which applies to all strategies, firms and investors.

PE is clearly living a “golden age” era, which begs the question of how long it will last and what will drive success in the years to come…

In a couple of weeks, LPEA will bring together PE practitioners from across Europe, the US and emerging markets to discuss the future of PE or “PE 3.0”. They will gather for an entire afternoon at the Philharmonie and offer the audience a mix of panel debates and expert case studies.

The conference will focus partly on Sustainable/ Impact Investing including “ESG” (Environmental, Social and Governance). Importantly, Prince Max von und zu Liechtenstein will be the VIP speaker as the CEO of LGT, a leading ESG investor. He will deliver the keynote speech and moderate a panel with leading PE investors who are well versed into the space.

Another theme of the conference will highlight concerns on the rise of Family Offices: while PE is still dominated by institutional investors (e.g. Pension Funds and Insurance Companies), investment offices controlled and led by international families are gaining ground as a key investor in the asset class, sometimes competing with traditional PE funds as they invest directly in companies, thus bypassing the funds. In this context, Norbert Becker – recently voted the most influential businessman of Luxembourg by Paperjam Top 100 – will shed some light on what it takes to succeed in PE as a private investor and how Luxembourg supports the industry in general and families in particular.

These are just two of the reasons why the financial community will enjoy taking part in the flagship annual event of LPEA. Now in its third edition, the conference has quickly gained a top spot amongst investors and advisers alike (registrations were closed one month ahead of the event).

This growing success is a sign that Luxembourg is not only a dynamic PE hub but also that a growing number of players are set to disrupt the industry and will play their cards from Luxembourg as well going forward.

More information about the LPEA Insights in  www.lpeainsights.lu