LUXEMBOURG A LEADING INTERNATIONAL FINANCIAL CENTRE & FINTECH HUB
Robert J. Jarvis Head of US & Canada Desk robert.jarvis@lff.lu
LUXEMBOURG A LEADING INTERNATIONAL FINANCIAL CENTRE & FINTECH HUB
Robert J. Jarvis Head of US & Canada Desk robert.jarvis@lff.lu
EUROPEAN FINANCIAL CENTRES LONDON LUXEMBOURG FRANKFURT
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3 New Financial, 2018
HEART OF EUROPE
HOME OF SCHENGEN
ONE TOLERANT NATION 3 official languages
3.6 languages on average
47% foreigners 175 nationalities
Source: IMF, 2016
Source: WTO, 2018
THE EUROPEAN SINGLE MARKET CROSS BORDER TRADE
510+
MILLION CUSTOMERS
7000+ FINANCIAL INSTITUTIONS
23
MILLION
SMEs
WITH FREE MOVEMENT OF
GOODS
CAPITAL
SERVICES
PEOPLE
ECONOMIC STABILITY POLITICAL STABILITY
SOCIAL STABILITY
MAIN FINANCIAL CENTRE ACTIVITIES ASSET MANAGEMENT
BANKING
INSURANCE
CAPITAL MARKETS
ASSET MANAGEMENT
€4,700,000,000,000
ASSET MANAGEMENT § €4.7 trillion of assets under management § 500+ Asset Managers § Sold in 70+ countries § 62% of global cross-border funds
Retail
Alternative
BANKING Retail Banking
Private Banking
Corporate Banking
Depositary Banking
Fund services
INSURANCE § 1st in cross-border insurance § €21+ billion premiums written H1 § Non-life +315% H1 / Brexit § Dedicated regulator
CAPITAL MARKETS § Leading international securities centre in EU § 35,000+ Listings / 60 currencies § 50% of EU High Yield Bonds § 50% of world’s sustainable bonds
ALFI & The Luxembourg Fund Industry
About ALFI
Non-for-profit organisation The Association of the Luxembourg Fund Industry (ALFI), founded in 1988
More than 1,400 members
Representative body for the Luxembourg investment fund community:
Luxembourg-domiciled investment funds
Asset Managers and management companies
Servcice Providers
Associate members based in other juridictions
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Objectives
Shape regulation
Promote the Luxembourg investment fund industry
Help members capitalise on industry trends
Foster dedication to professional standards, integrity and quality
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Worldwide investment funds Market share (%) by assets Global net assets
Africa 0,3%
USA 47,7%
Europe (excl. Lux) 23,6%
Global net assets
51155.25 EUR bn
Canada 3,2% Americas (excl. USA & Brazil & Canada) 0,4%
Luxembourg 8,9%
Brazil 3,6%
Asia & Pacific 12,3%
4 Figures as at September 30, 2019
Source: Investment Company Institute (ICI)
Europe’s leading fund domicile UCITS & AIFs Country Luxembourg Ireland Germany France United Kingdom Netherlands Switzerland Sweden Italy Denmark Others Total
Assets EUR millions
Market share %
4 569 999 2 928 269 2 304 913 1 936 413 1 647 561 937 209 686 225 385 233 319 281 308 752 1 144 832
26.6 17.1 13.4 11.3 9.6 5.5 4.0 2.2 1.9 1.8 6.7
17 168 687
100.0 5 Figures as at September 30, 2019
Source: EFAMA
Luxembourg fund industry … at a glance :
3746 investment funds
14808 fund units
4718.91 billion euros in assets under management
More than 68 000 distribution agreements for Luxembourg UCITS
6 Figures as at December 31, 2019
Source: CSSF
Luxembourg fund industry Investment policy of investment funds in terms of net assets Net assets
Equity 30.3%
Balanced 20.8%
MMF & Cash 7.7%
Bond 29.9% Fund of funds 5.7% Real Estate 1.8% Others 1.7%
PE & Venture Capital 2.1%
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Figures as at
December 31, 2019 Source: CSSF
A comprehensive ecosystem
Stock exchange 5100+ share classes listed
279 Financial Sectors Prof.
61 Custodians
Distributors
3,746 funds EUR 4718.9 bn in AuM
141 Central Administrations
1. Private Banks 2. Life Insurance 3. Platforms
December 31, 2019
360 Management Companies (including 3rd party ManCo)
Auditors/ lawyers
Regulator CSSF
Sources : CSSF / Luxembourg Stock Exchange
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Largest fund promoters in Luxembourg 80% of the top 30 Assets Managers use Luxembourg as their primary European platform for distribution
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Luxembourg funds: the vehicle of choice for cross-border distribution Market share of Luxembourg domiciled funds among foreign funds sold cross-border
Canada: 3%
Turkey: 92%
Georgia: 100%
United States: 18% Mexico: 46% Colombia: 83%
Korea: 88% Kuwait: 67% Japan: 59% Bahrain: 77% Taiwan: 80% Qatar: 98% Israel: 38% United Arab Emirates: 75% Hong Kong: 81% Lebanon: 88% Macau: 78% Oman: 99% Brunei Darussalam: 100% Saudi Arabia: 25% Vietnam: 100% Singapore: 68%
Peru: 40%
Chile: 57%
Mauritius: 97%
Australia: 10%
Botswana: 100% South Africa: 55% New Zealand: 15%
Source : Refinitiv & PwC analysis as at December 31, 2018 (Poster PwC 2019)
Three pillars of the Luxembourg fund centre
Luxembourg fund centre
UCITS*
Alternative Investment Funds (AIF)
Responsible Investment Funds
* Undertakings for collective investments in transferable securities
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ALFI Digital / Fintech Forum Looking ahead – 1st part Relaunch – Looking ahead
December 2019
ALFI Digital/Fintech Forum Scope & Objectives Dual Scope Digital/Fintech developments which are believed to have a “disruptive” impact on the AM industry; meaning that the technology or development may bring along fundamental change to existing business models or processes in the AM industry. “Digitalization” of existing processes within the asset management value chain.
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ALFI Digital/Fintech Forum Scope & Objectives Objectives Primary Building and spreading digital/fintech Know-How within our industry • => White papers Share “digitalization” initiatives and case studies to address industry pain points with Digital/Fintech solutions • => Business driven / Process centric Communities & Events Secondary Contribute to creating a strong and innovative ICT eco-system in Luxembourg Support the positioning of Luxembourg as an innovative AM center 14
ALFI Digital/Fintech Forum Working Groups
Disruptive Developments
Digital Funding
Blockchain & Crypto Assets
Digit
alisation of current AM Value Chain
Fund Distribution & TA
Fund Governance & Risk Management
Fund Administration & Custody
Collaboration with LHoFT; Link with ALFI committees
Digitalization Enablers / Pre-requisites Cyber Security
Legend
Digital/Fintech existing specialists working groups Process Digitalization working groups
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INTERNATIONAL SHOWCASE
OUR MISSION The LHoFT Foundation is a public - private sector initiative that drives technology innovation for Luxembourg’s Financial Services industry, connecting the domestic and international FinTech community to develop solutions that shape the world of tomorrow.
PUBLIC – PRIVATE PARTNERSHIP
LEADERSHIP CIRCLE PARTNERS
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ASSOCIATE PARTNERS
WITH THE SUPPORT OF
LUXEMBOURG FINTECHS MAP 4
220+ fintechs firms - 4300 Employees - €560M in Revenues - €130M in Capital
WHY LUXEMBOURG ?
LEADING FINANCIAL CENTER 1st Securities listing in EU 1st
Microfinance center in EU
Premier Wealth Management Center in Eurozone (> 350 billion AuM) Leader in Green Bonds & Climate Funds
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1st RMB Center in EU 2nd Financial center in EU 2nd largest fund center in the World (> 3.9 trillion AuM) Home to EIF and EIB AAA rated country
LUXEMBOURG’S ATTRACTIVENESS
ü Highly Accessible Financial Regulator ü Corporations open to innovation and
partnerships ü License application in English, French and
German ü EU passporting license (400M consumers) ü Regulated cloud services ü Seven Tier 4 Data Centers ü Partnership with Key Fintech Hubs around
the World ü Highly Qualified People
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SUPPORTING FINTECHS
FINTECH ECOSYSTEM VALUE CHAIN
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FINTECH STARTUPS
ECOSYSTEM
By Industry Over 751 fintechs
Other 15%
Payments 18%
Crypto 3% Insurtech 3% Credit 4%
150 Members
Regtech 16%
Cybersecurity 5% Big Data 5%
74 Hosted 8
AI 11%
Fundtech 12% Blockchain 12%
74 HOSTED FINTECHS
60 FIXED DESKS
25 HOT DESKS
SECURITY
ADDRESS
FLEXIBILITY
INCUBATION
14 CLOSED OFFICES
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INCUBATION
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ACCELERATION
FINTECH TALENT INITIATIVES
BUILDING SKILLS AND FINDING TALENT
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INTERNATIONAL NETWORK
25+ INTERNATIONAL PARTNERSHIPS
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THANK YOU
•
Use Case of Collaboration with FinTechs
16th June, 2020
Luxembourg FinTech Ecosystem Collaborative Approach to Solution Client Needs
Repeat 8 7 6
Repeat for additional use cases Demonstrate benefits, refine and improve solution Implement, use and abuse solution
Implementation 5 4 Onboarding 3 2 1 Discovery
Perform technical onboarding (IT infrastructure, Ops Model) Organize formal onboarding (commercials, legal, governance) Run proof of Concept, detailed definition of MVP
Jointly define concrete Use Cases to demonstrate benefits Discovery of proposed solution - Demo