Luxembourg’s alternative investment fund sector has grown significantly, with fund numbers rising from 4,568 in 2018 to 6,932 in 2021. More specifically, the private debt and real estate segments have experienced upticks in light of growing investor appetite for these assets, driven by the current market turbulence and uncertain environment.

Luxembourg’s alternative investment fund sector has grown significantly, with fund numbers rising from 4,568 in 2018 to 6,932 in 2021.

More specifically, the private debt and real estate segments have experienced upticks in light of growing investor appetite for these assets, driven by the current market turbulence and uncertain environment.

The assets under management in Luxembourg’s private debt sector rose to €267.8 billion, according to data from the annual KPMG Private Debt Fund Survey which is supported by the Association of the Luxembourg Fund Industry. This represents a 45.4% uptick compared to last year.

According to Alfi, the survey shows that private debt asset managers are improving decision-making through data analytics and artificial intelligence, making processes more cost efficient. In addition, tokenisation of investment vehicles and underlying portfolios have started to emerge.  

Given the increased complexity involved in private debt transactions, coupled with investor and regulator requirements for more transparency, the way industry players share data is coming under the lens.

The focus on transparency is further highlighted by the regulator’s enforcement campaign in this regard. The CSSF announced its 2023 transparency enforcement campaign will home in on topics such as climate-related matters, the Ukraine invasion, the macroeconomic environment and compliance with article 8 of the Taxonomy Regulation.

This makes disclosures and reporting all the more important as industry participants seek to ensure they
are compliant.