Delano March 2021 by Maison Moderne

No. 76

MARCH 2021

Luxembourg in English

Pierre Gramegna: 10 year plan The finance minister on the pandemic recovery programme and the future of Luxembourg’s financial sector

10th anniversary issue 5 453000 010015 76 €4

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A dramatic decade How fortunes change. The very first edition of Delano, in February 2011, featured on its cover Brian Nygaard, the general manager of the newly launched Leopard-Trek pro cycling team, which was backed by Luxembourg entrepreneur Flavio Becca. Ten years on, the team, now Trek-Segafredo, is based in the States and Becca awaits a verdict following a trial involving the purchase of luxury watches as gifts. Nygaard, incidentally, is the general manager of a winery in California. Changes in fortune, too, for then prime minister Jean-Claude Juncker. He became embroiled in a security services scandal, lost an election, became president of the European Commission and saw Brexit happen on his watch. In that first edition, we reported on his efforts, as head of the Eurogroup, to stave off a crisis over the Eurozone’s €750 billion rescue package. “Plus ça change…” There were echoes of that 2011 divisiveness in the negotiations last year over the EU’s recovery plan to repair the economic and social damage caused by the coronavirus pandemic. One notable name missing from that February 2011 edition is Xavier Bettel. Then an MP and alderman for the city council, Bettel would not even become mayor of the capital for the DP until November that year. Two years after that, at the age of 40, he would achieve his lifelong ambition of becoming prime minister. Déi Gréng’s transport minister François Bausch was deputy mayor under Bettel (as he had been since 2005) and the two of them,

alongside the former LSAP economy minister Étienne Schneider and DP finance minister Pierre Gramegna, have shaped Luxembourg for better or worse for the majority of the decade that Delano has been in business. They oversaw the disastrous referendum on voting rights for non-Luxembourgers in 2015, but they also put the grand duchy on the map in the emerging space resources sector. Their shift has also seen the building of the city’s tram system but has failed to tackle the ticking timebomb that is the housing crisis and the growing poverty gap. The alternative funds sector, green bonds and fintech have become synonymous with Luxembourg over the last 10 years, but so has LuxLeaks and, now, the OpenLux investigations. When Delano was launched, the market for English-language media in the grand duchy was limited but had huge potential. Many locals now clearly prefer consuming media in the language of Shakespeare and Kae Tempest rather than Flaubert and Orelsan. Fortunes do change. Delano has expanded its team and has ambitious plans. But our core mission, to help readers understand Luxembourg in all its facets, is one thing that has remained steadfast over the last ten years.

Editor-in-chief DUNCAN ROBERTS

MARCH 2021

Editorial #TenYearsAfter

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Contents March 2021 10th anniversary edition

Investing in a sustainable fund business

06 #POLITICS - CAROLE DIESCHBOURG

“It’s a constant battle” –

08 #BUSINESS - PETER PÖHLE

–

10 #FINANCE - CORINNE LAMESCH

38 Head to head ALEX BODRY VS AMIR VESALI p. 2 4 Vinciane Istace on diversity and inclusion at the workplace

–

“ There’s always a going to be a need for content” 14 Dashboard

Conversations 18 BUSINESS - PIERRE GRAMEGNA

“ You ain’t seen nothing yet” –

24 POLITICS - VINCIANE ISTACE

44 Gusto

Time for takeout 46 Business club

“ Collective dimension to 50 Pick’n’mix generate shared value” A memorable decade

Photos

Mike Zenari, Illustration

Sofia Azcona

Evolution of Luxembourg’s workforce, financial sector and housing market over the past decade

40 Essay

How can Luxembourg address its housing and transport challenges?

“ We need to make it happen”

12 #CULTURE - BERNARD MICHAUX

Party politics

p. 18 Pierre Gramegna on the government’s balance sheet and the future of finance

p. 40 Handling Luxembourg’s expected population boom

MARCH 2021

30 Business report

Ristretto

“ A decade of quick change for the startup scene”

Ristretto #Politics

MARCH 2021

“It’s a constant battle” In March 2011, an earthquake and tsunami off the coast of Japan triggered an explosion at the Fukushima Daiichi power plant, a stark reminder for environment minister Carole Dieschbourg (Green party) that nuclear has got to go.

How do you remember the nuclear incident at Fukushima? For me, it was a déjà vu of Chernobyl, which I remember very well. I felt for all the people who lost their homes and livelihoods. But you also immediately think: What would happen if there was a disaster like this at Cattenom, right on our doorstep? It’s terrifying. Nuclear energy always comes with a risk, but public awareness has increased enormously. Some countries still see it as a cheap, emissions-free source of power. What will it take to change their minds? It’s a constant battle. Some countries, also in Europe, see nuclear energy as a solution to the climate crisis. That is a fallacy. First, it’s not cheap. Hinkley Point in the UK, for example, will only work out economically at a fixed tariff that is higher than the price for renewable energy. The waste problem hasn’t been solved. With a nuclear power station, money is locked in for decades and production is centralised. Renewables helpmake energy more democratic. We want to be more flexible, decentralised and allow people to participate in the energy transition, rather than moving from one energy dependency into another. The European Commission is technology-neutral, leaving it up to member countries to decide whether to use nuclear power. What challenges does this pose? Luxembourg in recent debates--the EU taxonomy, European Green Deal and Climate Law--has always tried to keep nuclear wording out of the texts. We must consider scenarios for climate solutions that are 100% renewable. We respect that every country chooses its energy mix. But we cannot accept that Luxembourg public money is invested in nuclear projects as part of EU funds. Luxembourg still uses nuclear energy in its network. By when would you like to see this phased out? We are in a free energy market. We cannot dictate to big industrial players where they buy their

electricity. What we have achieved is that in the residential domain we are 100% renewable, and that this commitment extends to public players. For the rest, I hope that bit by bit the economic players will pull in the same direction. You came out strongly against Belgium exploring nuclear waste storage sites near Luxembourg, with the Belgian environment minister citing a “serious diplomatic incident”. Would you react in the same way again today? I would do exactly the same today. It wasn’t a diplomatic incident. This ministry was officially informed that the consultation procedure had been launched. We are directly affected in the border region and for us that meant we should have been involved from the start, not just informed. There was some disagreement on this, but for us it’s important to respect cross-border cooperation and for us to have our say. One of the potential sites is near our biggest drinking water reservoir; we need to be very clear about this. France is in the process of exploring lengthening the lifespan of some of its reactors. What do you hope will happen with the Cattenom site in the next ten years? Obviously, I want Cattenom to close and for there to be no extension. If I look towards the future, the best solution would be a switch to renewables, to new jobs and in favour of a circular economy. It’s about enabling a transition for the people working in this sector, too. Cattenom is a big power station. We want to think in terms of the Greater Region, and we want to reach our sustainability goals together with our neighbours. Interview CORDULA SCHNUER Photo MATIC ZORMAN Carole Dieschbourg attended anti-nuclear protests with her mother as a child and continues to do battle as Luxembourg’s environment minister

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Ristretto #Business

MARCH 2021

A decade of quick change for the startup scene In 2011, Peter Pöhle was among the first to benefit from a cooperation programme between Luxembourg and a Silicon Valley accelerator. Although his company appoint did not survive, the entrepreneur kept going, alongside a growing startup ecosystem. How did you experience Silicon Valley as a young entrepreneur? It’s very impressive. It’s also sobering, because you arrive in this shark tank and realise how many incredibly good ideas and talented people there are. It’s a healthy experience. You feel this magic of Silicon Valley where you’re just a stone’s throw away from investors, from big names you know from the media. It’s inspiring. We don’t have thousands of people in our address book from back then, but they are good contacts that still react when we ask for advice or a connection. What has happened since 2011 with your company? Yappoint wasn’t as successful as it should have been. We were inexperienced. With an online booking service, we were also ahead of our time. Our potential clients weren’t ready. Fast forward ten years and there are platforms, also here in Luxembourg, that are very successful. We closed the project and my co-founder Gilles Poulles and I bought out the other shareholders. In 2014, we started a new project, SponsorMyEvent, which is a virtual marketplace for event sponsoring. That’s been a success, but the whole sponsoring and event market broke down with the pandemic. So, we started Boothted, which is a platform for virtual events. All of the experience we have from the event sector has flowed into this. More generally, how do you think the startup scene in Luxembourg has changed? When you told people that you were working for a startup back in 2011, they looked at you s though you’re crazy. Over time, it has developed into a very nice microcosm, where you have a range of excellent startups and the right infrastructure, such as the House of Startups, the House of Entrepreneurship, support from the Chamber of Commerce, the Technoport and others.

But in terms of venture capital, you hear time and again that it’s difficult to find investors. That’s true. The situation in terms of venture capital is relatively limited. There are a few players, but substance is missing compared to other startup capitals, such as London. There’s a lot of catching up to do. Not much has happened in the last ten years, but I would be thrilled to see progress in the next ten. Looking at the coming ten years, how do you think Luxembourg will develop as a startup hub? If I look at the last ten years and at how quickly things developed, then I would expect a lot to change. I would expect Luxembourg to open up further and attract more international startups. The infrastructure is there and must be used. I still hope that Luxembourg can become a test market for new technologies. We have modern telecommunications; 5G is being rolled out. All of that helps companies test their products in a relatively small and manageable environment. And your own future? For a platform like SponsorMyEvent, there is a legitimate future, especially once the event sector recovers, but I wouldn’t expect explosive growth. With our virtual event software Boothted, we face a lot of competition, but we can quite aggressively enter a $70bn market with that product. It’s modular and very flexible, which makes it stand out from existing competitors. We hope that we will gain more traction to raise capital and enter the US market. Gilles and I have been working together since 2006. We’ve been through thick and thin, and that’s the best basis to say: ‘Let’s do this’. Interview CORDULA SCHNUER Photo MATIC ZORMAN Peter Pöhle found a 2011 stay in Silicon Valley, as part of a Luxembourg government programme, impressive but also sobering

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Ristretto #Finance

MARCH 2021

“We need to make it happen” Corinne Lamesch of the Association of the Luxembourg Fund Industry talks about the investment sector’s improved reputation and what the savers of tomorrow really want.

Looking back to 2011, what have been the biggest changes in Luxembourg’s fund industry? I want to talk about five key changes. First, asset management has become centre stage, and I will explain what I mean by this later. Then, second, the industry has embraced many regulatory changes over the last decade, which has made our industry stronger and more resilient. Then, third, the Luxembourg industry has continued to expand its toolbox. For example, let’s name the RAIF and limited partnerships. Then, fourth, Luxembourg has continued to open new markets and hence widen its distribution footprint. And finally, the Luxembourg industry has embraced new product trends such as sustainable investments, alternative and private asset classes, and has embraced digital transformation. So, if we go back to the first one, which was asset management has become centre stage, what we have seen in the past decade is that asset management has become a major actor for a well-functioning economy and for the well-being of citizens. So, it’s not just only anymore about financial returns, but it’s a broader social code which we are pursuing. You know, let’s be honest, during the financial crisis of 2007-2008, I think the perception was quite different. And we believe, at least at Alfi, that this image has changed and that asset management is now seen as part of a solution to address different needs of our society. Why do you think that’s shifted? I think there is a shift in investors understanding that investment funds can be an essential tool for their long-term savings. So, there is this shift [to] ‘yes, we need to save for our pensions. And funds can be an interesting tool to achieve that.’

Alternative funds represent about 17% of Luxembourg’s industry today. If you had to take an educated guess, what percentage will they make up in 2031? [Looking at current numbers] I would say, in ten years’ time, it could be 25%. I would have said 30% using my instinct. Let’s talk about digitalisation. What does that mean to you? Does that mean I’m buying my funds on Facebook? Exactly. Maybe not Facebook, but an app, let’s say. I think there will need to be a special app, unless Facebook becomes a financial institution. And that’s a threat to the industry. Let’s be honest, if the Amazons of the world become a financial institution, then they will make it happen. So, we need to make it happen. If I would [imagine] the 2031 investor, what he would want is an app where he can buy online, without sending 100 pages of paper, his sustainable products, he can buy pension products, he can hopefully have access to private asset classes. And he sees everything, all his savings, whether held with one bank or another bank, or even his pension savings, which he has with his employer or the state, in one app. I think that would be a great achievement, from the investor perspective. I think that’s what I would want. Honestly, I’m in this industry, I have various investments... but do I have the full picture at all times? No.

Corinne Lamesch is head of FIL Investment Management in Luxembourg and was elected Alfi chair in 2019

The funds industry is a big employer in Luxembourg. Will it be a smaller or bigger part of the economy in 2031? I think that the growth rate of staff in the sector will continue. Obviously, we will need to attract talent for that to happen. We also need to attract the right talents. Because, I mean, the agenda we just discussed requires... different skills and different profiles... but I think there’s definitely growth potential for staff in this area. Interview AARON GRUNWALD Photo MATIC ZORMAN

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Ristretto #Culture

MARCH 2021

“There’s always going to be a need for content” Since 2011, film producer and café owner Bernard Michaux has gone from successfully pitching a sitcom to RTL to the verge of an Oscar nomination for acclaimed documentary Collective. I guess, in 2011, you were preparing the Comeback TV series for RTL? Yes, we had already pitched via the competition [to produce a sitcom series] in 2010 and we were also doing the children’s film, Schatzritter. So, in 2012, we opened the Bouneweger Stuff and started shooting the series. It was a great time, this interactivity. Looking back, do you ever regret your decision to enter the bar business? At the beginning, my idea was to start up the bar and then to sell it or give it to my business partner. But I remember renovating it and the incredible work. The bar was a success, and I felt nostalgic about leaving it behind. And then I got a new partner, Michael Prosperi, and, well, apart from the last 12 months, it has worked very well. You also manage the Buvette at the Rotondes. Did you have any experience of the hospitality sector before? I really was a greenhorn when I started. My only experience was from the other side of the bar. You also became a partner at Samsa Film... Claude Waringo from Samsa approached me to test the water. I was quite open to the idea, Samsa were the best-known company from Luxembourg and I liked their profile. I think we negotiated for about a year. Their idea, I think, was to build up the future of Samsa, and in the end, it was a win-win situation. It means more people, a bigger back office, more projects, more responsibility… But as three producers [Jani Thiltges is the other], we are kind of independent with the projects we are doing. One of your showcase projects is the Romanian co-production Collective, which has been in lots of critics’ best of 2020 lists. How did that happen? I met Alexei [director and producer Alexander Nanau] when he was at the Luxembourg Film Festival with Toto and His Sisters. Then in 2016, when he was the president of the documentary

jury, we really started discussing the project, even though he was not sure it would be something or not… we met again at Cannes that year, and he had already shot some stuff and, by that time, he was looking for a co-producer. I was sure I would get my money back, even if the Luxembourg Film Fund didn’t come on board. I don’t know how much time I spent in Bucharest in the editing room--they didn’t want to send any footage via the internet, because nobody knew what he was doing with the film. The first time, I watched 13 hours of film over two days. When the editing was finished, we did the colour grading and sound editing in Luxembourg, Kyan Bayani did the music. When it was finished, we waited, and Cannes did not want to take it. But then, I got a phone call saying it had been accepted in Venice. And then, a few days after that, Toronto confirmed. The pandemic has obviously hit production and distribution, but how do you see the future of the film industry? There’s always going to be a need for content. I definitely think that there will be more and more day-and-date releases [when a film becomes available in cinemas and on streaming platforms at the same time]. But art house films will always have their audience, and I think there is potential for a ‘cinephile’ cinema in Luxembourg City. People want to go to the cinema, to have that experience. On the other hand, the streamers are just interested in good stories, they don’t care who they work with. So, I hope this may be an alternative source of financing for us as a Luxembourg company. Interview DUNCAN ROBERTS Photo MATIC ZORMAN

Bernard Michaux is a producer and managing partner at Samsa Film and CEO of Carot Sàrl, which owns the Bouneweger Stuff and Buvette bars

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LE GOUVERNEMENT DU GRAND-DUCHE DE LUXEMBOURG Ministère de lʻÉducation nationale, de lʻEnfance et de la Jeunesse

LE GOUVERNEMENT DU GRAND-DUCHE DE LUXEMBOURG Ministère de la Santé

Dashboard #EconomyandPolitics

MARCH 2021

POPULATION BY NATIONALITY

LUXEMBOURG PARLIAMENT

Luxembourg’s population has grown by 22% over the past decade. Since 2011, the proportion of foreigners rose from 45% to 47.4% of the total. The proportion of Portuguese nationals declined from 16% to 15.2%, while the French increased from 6.1% to 7.5% of the total.

Number of MPs by party, 2011-2021.

Source

Statec/CTIE

www.elections.public.lu

Government coalition

POPULATION 2011 512,400

POPULATION 2020 626,108

13 9

7 4

47,805

31,500

Luxembourgers 291,900

18,100 16,900

Government coalition

Luxembourgers 329,643

22,996 19,823

12,000

12,849

5,500 3,900

February 2011* 60 seats

95,057

82,400

13 13

5,317

21,500

4,168

28,700

39,863 48,587

Total foreigners 220,500

October 2013 60 seats

Total foreigners 296,465

Government coalition

France

Italy

Belgium

Germany

Britain

Netherlands

Non-EU

Other EU 10

The financial sector has employed nearly 12% of Luxembourg’s workforce# over the past decade (although the figure is higher once specialised and support services are added).

2011

EMPLOYMENT BY SECTOR

Source

October 2018 60 seats

2 2

Statec

348,715

CSV

LSAP

Déi Gréng

ADR

Déi Lénk

Pirate Party

2012

*2009 election

Portugal

2013 2014

“ As long as Luxembourg is successful, as we were with Brexit, we will be an inconvenience.”

2015 2016 2017 2018 2019 445,303

2020 100,000

150,000

200,000 250,000 300,000 350,000 400,000 450,000 500,000

Industry

Financial services

Construction

Specialised activities

Wholesale, transport & hospitality

Administrative & support services

Information & communication

Other activities

#End of third quarter each year

Patricia Pitsch

50,000

Photo

Nicolas Mackel, CEO of Luxembourg for Finance, responding to the OpenLux revelations, 8 February 2021.

FINDEL AIRPORT TRAFFIC

GOVERNMENT BOND YIELDS

Passenger volume at Luxembourg’s airport grew at a steady clip during the decade before the pandemic; cargo volumes continue to climb despite covid-19.

Source

Bloomberg & Luxembourg Stock Exchange

2.5%

Luxairport

MARCH 2021

It has become progressively cheaper for many governments, including Luxembourg’s, to borrow† on global financial markets over the past 10 years.

2011 2012

2.0%

2013 2014

1.5%

2015

Greece

2016

1.0%

2017 2018

0.5%

2019

Luxembourg

2020

Germany

0.0% 2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

1 million

†Average percentage per annum. Luxembourg bonds have multiple maturities; 10 year maturity for other government bonds

2 million

Passengers

3 million

4 million

5 million

Cargo tonnes handled

LARGEST LUXEMBOURG EMPLOYERS The country’s four biggest employers‡ are in the public sector. The largest private sector employers are a supermarket, building services provider and steelmaker. Source

The central government has, by far, the largest workforce

Statec

Public and not-for-profit sector

Building and related services

Retail, distribution and transport

Financial and related services

Industrial

30,000

25,000

20,000

Demand for security and cleaning services continues to grow

15,000

Amazon tripled its workforce between 2016 and 2020

2020

2011

2020

2011

2020

2011

2020

2011

2020

2011

2020

2011

2020

2011

2020

2011

2020

2011

2020

2011

2020

2011

2020

5,000

2011

‡as of 1 January of each year

10,000

Dashboard #EconomyandPolitics

5 NOTABLE CITATIONS FROM 10 YEARS OF DELANO

HOUSEHOLD MORTGAGE AND SAVINGS RATES Luxembourg bank interest rates* on new home loans and deposits have plummeted since 2011. Luxemburg Central Bank (BCL)

“ I am for secret, dark debates.”

IMF warns of high property prices and household debt

3% 2.5%

Jean-Claude Junker, then prime minister, said at a conference on economic governance in April 2011 that rumours spilling out of economic policy meetings could fuel speculation on the financial markets.

2% 1,5%

Mario Draghi says ECB “will do whatever it takes” to save the euro

1% 0.5% 0.0% 2011

2012

2013

2014

2015

2016

Mortgage rates**

2017

2018

2019

“ What the fuck is Luxembourg?”

2020

Deposit rates***

* Monthly average each November, sample of 49 reporting banks **Fixed rate, 10 years and longer ***Up to 1 year initial maturity

Minister of the economy Étienne Schneider, speaking in October 2012 at the US embassy, said he was often asked this question by people he was trying to lobby abroad.

BANKS BY PARENT COUNTRY The total number†† of credit institutions in Luxembourg has declined over the past decade, although geographic origin has become more diverse. Source

Luxembourg Financial Sector Supervisory Commission (CSSF)

“ I am saddened that British people have fallen victim to political crooks.”

Germany France China

Luxembourg

“Merde, alors!”

Japan Italy

Foreign minister Jean Asselborn interrupted Italy’s Matteo Salvini at a conference in September 2018 when he compared African immigrants to slaves.

US Sweden Spain

“ Do you know where they’re transparent? In dictatorships.”

UK Belgium Brazil

Fedil boss Michèle Detaille, in an RTL interview in February 2021, dismissed arguments that the details of industrial agreements with the state should be disclosed.

Ireland Netherlands Qatar Other Total 0

5 2011

2014

††As of 31 December of each year

2017

2020

120

125

130

135

140

145

Olivier Minaire, Maison Moderne, Nader Ghavami, Matic Zorman, Andrés Lejona

MEP Viviane Reding delivered what was described as a blistering assault on Brexiteers in the European Parliament in December 2017.

Switzerland

Photos

MARCH 2021

Source

HOME OWNERSHIP RATE

HOUSEHOLD LOANS

Luxembourg population by housing tenure status, 2019.

Bank credit* to Luxembourg households has nearly doubled over the past decade, in large part due to rising property prices.

Eurostat

Source

Owners

Luxembourg Central Bank

Owner, with mortgage or loan

70.9%

€35.2bn

41.8%

Tenant

€26.9bn

€23.7bn

29.1%

€41.0bn

€37.9bn €32.9bn

€29.0bn €25.1bn

€22.3bn Tentant, rent at reduced rate or free

€30.7bn

Owner, no outstanding mortgage or housing loan

6.3%

29.1% 2011

Tenant, rent at market rate

2012

2013

2014

2015

2016

2017

2018

2019

2020

* As of 31 December of each year; includes loans to non-profit institutions serving households

22.8%

HOUSING COSTS Property prices have nearly doubled over the past decade, while rent for a flat has risen by roughly a third**. Source

Athome

NATIONAL

SOUTH

2011 2020 Apartment

€1,456,639

EAST

SOUTH

2011 2020 House

2011 2020 Apartment

2011 2020 House

**Based on an average of adverts posted on Athome.lu in the 12 months to September 2011 and to September 2020

€1,003,191

€581,760

CENTRE

€313,950 €541,365

€733,260

€410,550 €830,789

€618,120 €1,064,572 €563,580 €835,725

EAST

WEST €307,050 €531,911

€1,819 €2,265

€1,304

€949

CENTRE

€324,300 €708,247

€3,605 €2,706

€2,504

€1,932

€1,263

NATIONAL NORTH

€1,218 €1,743

€1,865 €2,465

€1,501

WEST

€916

€1,061

NORTH

€606,000 €1,023,665

€345,000 €667,489

€702,941

€282,900 €457,802

€490,860

€2,274 €2,908

€1,527

€1,117

Average asking price

€1,296 €1,453

€782 €1,077

Average monthy rent

MARCH 2021

Source

MARCH 2021

Conversation Pierre Gramegna

“ We ain’t seen nothing yet Interview AARON GRUNWALD

”

Photos MIKE ZENARI

Finance minister Pierre Gramegna (DP) reckons sustainable investing is the future of Luxembourg’s financial sector. Delano sat down with Gramegna to take stock of the past decade, look ahead to 2031, and ask about the impact of the pandemic on public finances.

MARCH 2021

Health before numbers, Pierre Gramegna says of the pandemic

Conversation

PIERRE GRAMEGNA

MARCH 2021

Education Originally from Esch-sur-Alzette, Pierre Gramegna earned a bachelor’s in economics and master’s in civil law from Paris II Panthéon-Assas University.

been very prudent in the numbers with Let’s talk about the budget if we can. which we’ve built the budget. And I think Given the pandemic recovery spending, that’s where we’re going to land. In terms there’s a growing budget deficit and of debt, as it stands, at the end of 2020, public debt is expected to go up Professional career Gramegna entered the foreign our public debt will be around 26.5% of by 7.4% of GDP. Do you anticipate service, serving at Luxembourg’s GDP. And even this year, 2021, the debt submitting a revised budget this year embassy in Paris before being named level will be below 30% of GDP. Now, or are we on track to handle the crisis consul general in San Francisco and then ambassador to Japan and obviously, this is quite an increase comwith what you already got approved South Korea. He became director pared to 2019, where we had a surplus in from parliament? general of the Luxembourg Chamber First, before answering about where we the budget, as we had in 2018. But still we of Commerce in 2003. stand in terms of public finances, I would are the country in the EU and Eurozone Political posts like to really make a few [points] on some that has had the lowest percentage increase Gramegna was named finance minister in December 2013. He was things that do not get enough attention. since 2019. And we will stay below 30%, the top-placed DP candidate for the Now, let me start by saying that, obvieven this year, which is the national goal South constituency in October 2018 ously, this pandemic has caused an ecothat this government has given to itself. parliamentary elections, and was then reappointed finance minister. nomic downturn, and has obviously And knowing that at European level 60% worsened public finances, everywhere. is allowed. And when you see how much Other mandates Gramegna sits on the boards of the My first priority, since the beginning of the debt is increasing in other countries, European Investment Bank, European I think we have been doing reasonably this pandemic, has been the health of the Stability Mechanism, International well, despite the fact that we’ve spent people. This was an absolute priority, Monetary Fund, World Bank and Asian Development Bank. which goes before anything else. And whatever [is] needed to be spent in terms we’ve proved that by spending more than of health. And also despite the fact that we were the country that per capita has €200m in expenditures, investments in reinforcing medical personnel and doing spent most to support the economy, close the large scale testing, being the country to €5,000 per inhabitant. And this investthat is doing the most tests, which has ment in preserving jobs, in supporting allowed us to have a second lockdown really go much farther than any solidar- small and medium sized companies, even that was less deep than in other coun- ity we’ve ever had in Europe. And who larger companies, was the right answer tries. So the most important thing is health. would have expected that the [European] in this very sudden crisis that has been The second most important thing, I would Commission would be allowed to lend triggered by the pandemic. say, is not only to focus on numbers, and on behalf of the EU countries? we’ll get to numbers in a minute, but to And then I mentioned the wake-up call It’s going to take a while to get realise that in this very deep pandemic, for climate change. I think that this crisis everyone vaccinated. So do you which has put our lives upside down, and the lockdowns in many countries expect to keep a lot of the economic there’s lots of rays of hope.... have proven one thing that climate scep- support programmes going for the The first one that I would like to men- tics had always contended. And that was rest of the year? When will they be cut? tion is that we have seen increased soli- that climate change was not due to human We’ve had a very pragmatic and step-bydarity between people in the country of activity and economic activity, it was due step approach.... For the time being, some Luxembourg, increased solidarity in to natural phenomenon. Now we’ve had of these support measures go until end of Europe, and a wake-up call towards cli- a life-size test, because the lockdowns March. But we are already discussing to mate change. Now, solidarity between show that when we reduce human activ- extend it to end of June. And if necessary, people because in the face of hundreds ity, the planet is faring much better. well, we will extend it again. And I think of deaths, in the face of the incredible And [now] we can talk about numbers, the step-by-step approach is the right one commitment of the medical personnel, which was your question. Yes, so, we’ve to have. Because you also do not want we have had a society here in Luxem- adjusted the numbers. The deficit for last companies to get addicted to support. bourg that holds together. If I compare year, 2020, was expected to be around Now, with all due respect, for some comthat to other countries, [Luxembourg has €5bn. And the deficit for the time being panies and enterprises, it is extremely demonstrated] a lot of common ground, looks being around €2.4bn-€2.5bn. And difficult now, especially for those who a lot of solidarity. there’s still lots of expenditures that are have to remain closed. But even for those At European level, many would have going to be added in the next three months who can only function with strict limitaanticipated before this crisis that if such that are still going to be accounted for tions and constraints, it’s a very hard time. a thing would happen, Europe would not in 2020. So we’re going to have a higher But obviously, this oxygen that we need be present, would not rise up to the chal- deficit in 2020. But it will be lower than to give to the to the economy is limited lenge. Exactly the contrary happened. the €5bn that was anticipated [last year]. in time. And so we have promised, and And as early as April at the level of [EU] Now for next year [2021], we have antic- we will keep that promise, that we’re going finance ministers and then later in July ipated €2.7bn. This is the most recent to support the companies as long as there at the level of prime ministers, we agreed number. There’s no reason to change that, are restraints and constraints. But then a bunch of measures equalling more than we do not think of revising that in any after that, we need to get again in a nora trillion, one thousand billion, euro that way, in the months to come. I think we’ve mal economic functioning.

Pierre Gramegna

You’re not worried, though, that if the support programmes are wound up too quickly, maybe it’ll be a bit of a shock? Companies will still need a little bit of time to return to ‘normal’ otherwise they could have a cash crisis, kind of like in the beginning of the crisis. Well, I think this is part of the crisis. The immediate aftermath of the crisis, the weeks that follow, for me, are still like the immediate consequences. The goal of the support measures is neither to be stingy, neither to put our economy on a permanent oxygen lifeline. Finding the right balance is what we need to do here and we are committed to also organise the transition.

I think what we now need to ensure is monetary policy of the European Central that we’re going to mobilise the necessary Bank, we can now [borrow] at a very low amount of money to help companies and rate. Luxembourg has experienced that to help save jobs. So, help people keep now a couple of times as we are borrowtheir purchasing power. So even talking ing at negative rates. And let’s not forget about tax rises now would not be smart that talking about raising taxes would and would not be appropriate. I said that really hurt the confidence of consumers already six months ago, and six months and hurt the confidence of companies ago some people said ‘yes, but you need whom we need for the recovery. So the to deliver and act in the next couple of main focus now is recovery. There’s plenty months and take decisions’. I said, ‘we of time to then see, when we’re at the end don’t know when the pandemic will be of this tunnel, how we will deal with that. over. And when the immediate economic consequences will be finished.’ We still Last year, there was some talk about don’t know that. We now have light at the changes to estate, property and wealth end of the tunnel. But it will take time, it taxes. You still have two-and-half years will take months, many months, to con- or so on your mandate. Can you tell our clude vaccination programmes. So as long readers: are you planning to change The government has spent quite as the pandemic is not solved, one should these taxes during this government? a lot of money to pay for this support. not discuss tax increases or changes in The answer is no. Inheritance tax and Are our taxes going to go up? tax structures, on the one hand, and sec- wealth tax are not in the government This is a very legitimate question. And I ond, we should also make sure we have programme for the next two and a half think that now is not the right time, nei- enough funding to cope with the imme- years because they’re not in the five-year ther to already make suggestions nor sup- diate difficulties of people and companies. coalition programme. So that’s very clear. positions [about what] that could look like. And thanks to the very accommodative This is not on the agenda.

PRELIMINARY PUBLIC BALANCE SHEET General government budget state of play, as of 31 December of each year. The government closes its fiscal year on 31 March. Source

Luxembourg finance ministry

€18.8bn €19.8bn

€bn

€18.5bn

€21.2bn -€2.4bn

€1.3bn 20

€12.9bn €13.1bn -€0.1bn

2011

2012

2013

Revenues

2014

2015

2016

Expenditures

2017

2018

Surplus/deficit

2019

2020

MARCH 2021

Conversation

MARCH 2021

“ The pandemic is just boosting those things that already had wind in the sails”

Pierre Gramegna poses for a portrait during an interview with Delano at the finance ministry in late January

put a lot of effort in, and where we have which gives us a solution of what is green, Looking back at the past ten years, a lot to show.... the Luxembourg Green what is climate compatible, and what is from your point of view, what’s Exchange is the largest such dedicated not, will give Europe a kind of competchanged the most in Luxembourg’s stock exchange in the world. I mean, they itive advantage and Luxembourg is at financial sector? I would highlight three things.... One is are listing more than half of all the green the centre of all this. we have embraced transparency, exchange bonds worldwide. Very few people realof information, with not only with EU ise that. The IMF, World Bank and Euro- You think the EU taxonomy for countries, but with the rest of the world. pean Commission, institutions like that sustainable activities will be like Ucits And that was one of the first moves of use it, but investors from the US, from [the type of retail investor funds that forms the backbone of Luxembourg’s the new government back in 2013-14. And Asia use it. current investment industry]? I remember that this move was criticised Exactly. I use that in my speeches. I say by quite a few experts, and quite a few Luxembourg may have 50% of the that the Ucits story can be a forerunner players. And today, I think there’s a gen- green bonds in the world, but green of the taxonomy story. I really believe eral recognition that it was the right thing bonds are a very small percentage in that. to do. And, on top of it, if you look at the of the global total. If you look ahead The other thing is--I think we’ve been financial sector today, it is healthier. And ten years, could you guess how much able in the last couple of decades, but I would say more prosperous, and more bigger sustainable investment can really get? especially in the last [several] years--to competitive than it was before. So that brings me then to the finan- I think we, if I may use this American strengthen the international attractivecial sector itself, where I want to say two expression, we ain’t seen nothing yet. In ness of Luxembourg to American banks things. One is if you look at the fund the sense that now green bonds are 2%-3% and Asian banks. And that is key. This is industry ten years ago and today, two [of the overall world total]. 20% of ESG our strength in Luxembourg. We are things happened. The alternative invest- investing [editor’s note: 20% of global really open to the rest of the world. In ment fund industry really took off, and responsible investment funds, by assets the same way as [today] our Ucits are we’re very well positioned in that. And under management] is taking place in used from Hong Kong to South America, the second thing is.... [in the funds sec- Luxembourg, but the overall amount is green finance with the EU taxonomy is tor] we’re at around €4.74trn-€4.8trn still too little. So that’s why I’m saying going to be used from Asia to America in assets under management and ten years we ain’t seen nothing yet. I think we will and maybe to Africa tomorrow. ago, it was half [of that amount]. And have an acceleration here that will be the same goes for private banking, where spectacular. And I think the pandemic And what about you, Mr Gramegna? assets that are being managed here are will really boost that. Boost that, because Where do you see yourself in 2031? double of what they were ten years ago. we will have a recognition that to reach I am going to switch from sustainable And the third thing I would like to the ambitious goals of the Paris accord- finance to sustainable agriculture. Because highlight is all the innovation that has -and you know, Europe has committed I would like to grow olive trees and make taken place in the financial centre, and itself be carbon-neutral by 2050, and wine in a sustainable manner. there I would like to highlight fintech, we’ll reduce it by 55% in 2030—[and] to digital and green. Now fintech, we launched achieve that, there’s only one thing that Here in Luxembourg? the Luxembourg House of Financial Tech- needs really to happen: sustainable finance. Well, the wine you can definitely do here. nology back in 2017. And thanks to this If we do not achieve sustainable finance The olive is more difficult. private-public partnership, we’ve been models that will help what you call the able to attract dozens and dozens of com- real economy to transform itself, then What kind of wine do you want to make? panies.... obviously fintech brings you to we’ll never reach it. Great organic wine! digital. So these two things are very close. What do you think the Luxembourg And we’re very well positioned there. Also in the context of Brexit, we’ve financial sector will look like a decade seen that we’ve been able to attract pay- from now? ment companies, regtech companies, It is difficult to guess how some things insurtech companies to Luxembourg, and are going to accelerate. But building on insurance companies at large. We have what I just said, I think that the panhad a life-size test with Brexit, [to see] if demic is just boosting those things that we are attractive or not. And without already had wind in the sails.... I think changing our legislation, we’ve been quite that we’re going to see a tremendous successful in making Luxembourg the acceleration of digitalisation in finanhub for e-payment in Europe. And also cial services. And fintech is that. A conI would say the hub for insurance in Europe siderable chunk of financing will build next to London, which remains the larg- on two things; on the very low interest rates that we have now and which is est place. going to last for quite some time. And And last but not least is obviously green and sustainable finance, which I’ve really the taxonomy of the European Union,

MARCH 2021

Pierre Gramegna

MARCH 2021

Vinciane Istace has served in her role as diversity & inclusion leader since 2003

Conversation

Conversation Vinciane Istace

“Collective dimension to generate shared value” For PwC Luxembourg, diversity and inclusion go beyond ticking boxes. Vinciane Istace, diversity & inclusion leader since 2003, reveals the quantitative and qualitative forces behind their approach, what’s evolved over the past ten years and the vision for the next decade. Interview NATALIE A. GERHARDSTEIN Photos MIKE ZENARI

You’ve been in your role as diversity shortcut was, if they don’t shine it’s because & inclusion leader since 2003. they’re not shiny in a sense. They were, Can you tell us how these aspects but you need a space [and] spotlight to have evolved over the last ten years? show to the world your capabilities. Most of the diversity and inclusion actors started enthusiastically as ambassadors. What concrete steps were It’s probably the way the dimension was then involved? pioneered, and for our own story at PwC The first step was about understanding Luxembourg it came out of a reaction more it… we started digging, and it was probthan an action. We reacted to a portrait of ably the first kind of sociological analysis our company that didn’t really depict it [or] of our population. We started collecting what we wanted to be as a corporate. And figures that were not assembled with this at the time--more than ten years ago, by purpose before. Then we started conthe way!--it was mainly acknowledging ducting interviews. 300 people were the fact that there was a kind of inherited, asked just to describe the routine of their historical male dominance. I don’t want to judge, but we simply noted--and it was a visual recognition--that when you could see any given picture that portrayed leadVINCIANE ISTACE ership of the company, you could observe Education there were more men than women. HEC Management School - University We asked ourselves, where was it comof Liège master’s degree ing from? There was no bad intention, in commercial engineering. Qualified chartered accountant no plan to be like that… you may learn (réviseur d’entreprises). some leadership skills, but ultimately you PwC Luxembourg career (since 1992) become a leader because you are pracPartner: current roles ticing it, experiencing it. I don’t believe People and organisation; in school of leadership. I believe in genHR consultancy; Payroll, immigration and employee uine, professional exposure, with some servicing for local forms of mentoring, support, and women and international clients; and were not perfect, and as a result they Diversity and inclusion leader. were not exposed to very revealing proPartner: prior roles fessional assignments, so they were lackHead of communication and PR; and HR operations for Luxembourg ing the opportunity to shine. And the

daily life, just to be able to understand if there was something beyond the workplace that was influencing this allocation of roles. There were questions [asked at the time] like when was the last time you drove the kid to school? Who empties the dishwasher? And we started getting that it was a multi-factor equation, with so many dimensions. We came to the conclusion there are many stereotypes preventing both women and men to evolve. So it’s no longer a women’s issue. It’s a societal issue, and if we wanted to make an impact, we need to really include both the men and the women in this adventure… The next step was when we started questioning what social norms mean. Then you have gender, sex, sexual orientation, so many additional elements entering into the perception of the other person. Then diversity came, and how to define diversity, so we all started with counting and compliance… the regulatory framework started evolving and became a bit more robust, and there were six categories of diversity that were initially gender, sexual orientation, ethnicity, disability, age and religious beliefs. It started with a kind of transactional approach to ensure we are compliant. But this mechanical approach was by far insufficient because ultimately, what was the impact that we wanted to make? We wanted to be sure that our workplace was a safe place for

MARCH 2021

Conversation

Being data driven has been at the core of what PwC Luxembourg is doing in this realm. Can you tell us more about that, and how this mindset can truly be ingrained into company culture? That’s a very unfair question. When I [started this] in 2003, I was in learning mode, asking the soft HR dimension. And every rule I was contemplating led to one ‘Rome’--all roads lead to Rome-and my ‘Rome’ was culture. I remember a quote from a book that you can’t control corporate culture--what is this wild animal that no one can catch?--and after working decades with human beings, you cannot control culture. You can only relate to individuals whose behaviours you believe you may influence. If you succeed in influencing the behaviours, they may start changing thinking, expand their vision, and they may shift a few degrees. That’s very difficult. But if they shift a few degrees, and if you can replicate it across a reasonable number of people, then culture starts taking the direction you wish it to have. The first thing is to stop advocating… It’s a dynamic phenomenon. The more you advocate, the more you create rigidity [and] reinforce these invisible walls, making us belong to a certain category [and] we prevent ourselves from connecting to the larger human potential. [But] we cannot turn into passive actors… Because of the data [and] technology around [it], you can gather those data and make them talk for you. The first step is to look at the situation in an objective manner,

“ W hen everything becomes silent… then you see the cracks.”

However, “the underrepresentation of women on boards remains an issue in Luxembourg, with women making up barely one-fifth of board members”. Compared to the bar set for the underrepresented sex on Luxembourg public institution boards at 40%, there’s still some work to be done.

22%

20 15 10 5

14%

16%

tering this plateau phenomenon, and that’s why we need to remain determined… We have 27%-28% female [representation] at the partnership level, and we can’t jump above 30%?... it’s coming from this speed of evolution across the pyramid… but it’s not always on the employer’s shoulder. When family roles are not allocated, you will slow down a woman, or, let’s remain positive, you will accelerate a man… the pandemic to a certain extent has been for some useful. The family dynamic has been revisited for some… there’s not enough energy and time spent really digging into what’s happening at the level of the organisation… There are so many elements… but it’s only effective if it’s articulated.

You talked about the pyramid structure. The PwC Luxembourg Fund 2016 2017 2018 Governance Survey 2020 revealed that women in the grand duchy were underrepresented on boards, making up barely one-fifth of board members, despite a clear interest in making boards more diverse. Why the gap? [It’s] how human beings are wired deeply that’s where all journeys start, and when into their structures. The gap is there you see your point of origin you can ask: because there isn’t enough pressure on does it suit me as a leader? the system--it’s as simple as that. The Sometimes you will see things that phenomena we are observing for the you hadn’t imagined were existing in moment across the planet [include] how your own organisation… that’s this data- children are treated when they’re put to driven approach, you can [even] do it work at a very young age, how women with Excel. You saw and then you will are treated in the Hollywood industry see things appearing… We have reached and art scene in general, [etc.]... There a certain level of maturity, [but it] doesn’t are so many things that we know that mean that we are a champion in everything aren’t right, and we don’t make a proacand we don’t have huge progress to make. tive change. In gender and diversity, you Our journey is not linear, sometimes we have to shift opportunity to distribute [make] a big jump, and sometimes we them differently… lose a bit of traction, we need to rebound… For us, we’ve made analysis about intro- You talked a bit about the health crisis, ducing gender in the way we recruit, pro- which has impacted work-life balance. mote, train and remunerate, so at each Have you seen ‘pressure’ linked to key intersection in the HR cycle, we are that and our new ways checking what’s happening… when you of working? look through other criteria, such as the It’s a very multidimensional shift. There seniority in the role, the leadership posi- are very positive phenomena and negtion, objective elements, you see that ative ones. One interesting trend--[and] there are still some gaps there… in the this is my perception… [is that] the critalent pipelines, the way you navigate sis situation generated multiple effects across the pyramid, your professional on men and women, some of them are journey across the levels of the pyramid, very positive. We observed that women you are slowed down by very subtle remain- have a greater voice digitally speaking ing bias which you can’t see up front, but than compared with events… when you you can see the results… We have pro- needed to stand on the stage, we had gressed, but many companies are encoun- more male speakers. 0

Luxembourg Fund Governance Survey 2020, PwC Luxembourg & Institut Luxembourgeois des Administrateurs ; European Institute for Gender Equality (eige.europa.eu)

anybody to come and work while feeling respected, valued, with no need to disguise [oneself]. The notion of inclusion appeared then, which is not to put people in silos. It’s about ensuring that individual differences be respected and valued.

*Source

MARCH 2021

BOARD DIVERSITY ? According to the Luxembourg Fund Governance Survey 2020*, there is a general upward trend in female board members amongst the insights gathered from boards of 122 investment fund & management companies covering liquid & alternative products.

Vinciane Istace

MARCH 2021

PwC Luxembourg was the first company to sign onto Equilibre’s My Pledge, in addition to other commitments, but Istace says diversity and inclusion go deeper than just checking a few boxes

women to embrace more STEM opporDigitally, it’s easier to have a more Are you optimistic about the next tunities, etc… Shifting the roles in all diverse panel because you can connect decade with regards to diversity to many people much more easily. So and inclusion? senses. As long as you’ve not done it, words that’s positive. On the other hand, when I don’t see any other position than being are powerful, but they need to be aligned it comes to work-life balance, it depends… optimistic in general. Especially now, what- with your experience. it may be either positive, neutral or a ever news we are bombarded with. I believe Second, and this is for me an enormous negative experience. that we are wonderful beings and we’re challenge, relearning the collective dimenI know so many working mothers who capable of doing great, great things--[even sion. This is essential for the entire civiare so tired of facing children and job in if] we haven’t done [something] yet, we lisation… We are to a certain extent trapped the same hours of the working days. should not have a single doubt about our in an ocean of individuality. Diversity and Yes, covid has put an enormous social ability to do so. And it’s never too late. inclusion are not about affirming or posisilence on us all, our personal and pro- That’s the source of my optimism and tioning your individual rights [but rather] fessional life. But when everything determination and courage. your ability to welcome the difference of becomes silent, you don’t have these The next debate coming ahead is equity. the other person into your own world and fancy events anymore to check the box, That’s a subtle nuance. In large organi- believe it will enrich you, empower you… [say] I’ve done something for diversity sations, equality often results in unfair- And this collective dimension, I don’t see and inclusion. And then you see the ness, a negative perception of unfair it anymore. That’s why we cannot procracks. Because once the world has treatment… A simple example is about duce shared value that easily. Shifting roles and relearning the colbecome silent, once a number of events premium… let’s say we bounce back, and has really decreased, you can listen to as a leader I distribute the same premium lective dimension will enable us to genwhat is truly happening or not in your to everyone, I should be aligned with erate what is no longer value, but shared organisation. What I’ve found interest- fairness. And I’m not at all… Similar is value. I am accountable to create value ing--and you can extrapolate it--is that not always the golden rule for diversity, for myself, but this value created should the sudden silence is enabling the world but equity is key… one size does not fit never be to the detriment of anybody to see the situation for what it is…. This all, and that’s the challenge of the employer, else around me... That’s what diversity can bring to the world. is the revealing and hurting effect of this to customise the HR proposition… crisis, and to a certain extent, we need to reconnect to this serious awareness If you could name the priorities that to engage more genuinely and to have need to be tackled now in order to be the C-suite jump to the next stage… Diver- in a better place in ten years, what sity and inclusion aren’t just the right would they be? thing to do. We need it, [e.g.] for artifi- Women need to step into roles of leadership, men in roles of caring. We need cial intelligence.

BRAND VOICE

MARCH 2021

AML/CFT by Arendt

RC/AML-CFT compliance officer: a pivotal role in anti-money laundering and counter terrorist financing efforts 02 01

Art. 40 et seq. of the CSSF regulation No. 12-02

WHO AM I?

Article 4 (1) of Law of 12 November 2004

Registered IFMs, authorised IFMs, UCITS, SIFs, SICARs, RAIFs (supervised by the AED for AML matters), other unregulated AIFs CSSF FAQ of 25 November 2019

Investment funds and managers must implement a series of robust measures and controls to c ombat money laundering (AML) and terrorist financing (CFT), including the mandatory appointment of a responsable du contrôle du respect des obligations (RC) and AML-CFT compliance officer. Sponsored content by ARENDT

WHAT ARE MY CHALLENGES ?

The mandatory appointment of a RC/AML-CFT compliance officer • Increasing scrutiny on RC/AML duties by the regulators • Growing complexity of RC/AML duties such as framework definition (policies, procedures, risk appetite statement…), controls and oversight, and reportings • Strong expertise needed internally and robust control framework system to cope with fast-evolving regulatory requirements and market changes in order to adapt AML/CFT framework and risk-based approach • Extended scope of counterparties to monitor (clients, delegates, service providers, assets, transactions, etc.), controls to perform and document and methodologies to apply

Investment funds are required to adapt to several clarifications over anti-money laundering (AML) and combatting terrorism financing (CFT) obligations. “AML/CFT competent authorities recently provided very interesting feedback via investment fund managers and fund industry conferences, industry surveys and the sub-sectorial

national risk assessment, on the way in which regu lation in force is applied,” explains Christophe Lentschat, Arendt Fund Solution Director. Pursuant to the 2004 law, investment firms and AIFMs are legally required to appoint both a responsable du respect (RR) and a responsable du contrôle (RC) to oversee compliance with the afore mentioned requirements.

MARCH 2021

HOW CAN WE HELP YOU? Providing experienced individuals to act as RC/AML-CFT compliance officer — Helping the RC perform AML/CFT duties

THE ADDED VALUE OF ARENDT

Regular review and update of AML/CFT framework Annual AML/CFT risk assessment Periodic and ad hoc written reports to the management/board of directors Know your Clients Know your Transactions

A multidisciplinary team of legal professionals, regulatory/compliance experts and corporate services specialists to help address any and all AML/CFT concerns • Proven methodologies delivered by a regulated Luxembourg PFS • Experienced individuals to serve in the role of RC • A highly skilled support team to assist RCs in their duties • A digital platform generating transparent, up-to-date reports

Know your Counterparties Know your Assets Annual AML/CFT training Summary report on RC’s activities and operations

Photos

Arendt

Serving as the central contact with the Luxembourg authorities for AML/CFT purposes

Documenting controls “This represents a major organisational and operational challenge for investment firms, especially for the RC role, explains Christophe Lentschat. The latter must be appointed, meet numerous eligibility criteria and ensure that a complete framework of measures is put in place and well documented with regular reporting and evidence of the controls performed. Remember, an undocumented control cannot exist.” Procedures to reinforce include distributor due diligence (Know Your Distributor) – especially for cross-border distribu-

tion of UCITS, and asset due diligence (Know Your Asset). “Implementing controls and procedures involves data collection and analysis, as well as risk assessment and, where appropriate, proper risk mitigations to ensure a sound and robust risk management, all while taking into account asset classification. This requires specialist skills and appropriate tools,” explains Nicolas Descharmes, Head of Internal Compliance Product Solutions. Smart solutions With this in mind, Arendt group offers dedicated services for investment

firms faced with these requirements, providing experienced individuals to carry out the RC mandate supported by an in-house experts team. “Each firm can rely on a team of experts who implement best practices, document each control and establish reports using the appropriate tools. That way, we can ensure compliance with constantly changing regulations,” adds Nicolas Descharmes. Thanks to Arendt’s modular infrastructure, RCs can carry out one or more assignments,or delegate the KYA process to Arendt, for example.

tion, forma in r e h t t r ct us a For fu conta e s a ple

.com rvices e s t d en rc@ar or t.com arend

Nicolas Descharmes Head of Internal Compliance Product Solutions

Christophe Lentschat Arendt Fund Solution Director

Business report

MARCH2021 2021 MARCH

Investing in a sustainable fund business

3,000 LUXEMBOURG FUND ASSETS, €BN Total net assets in Luxembourg-domiciled investment funds more than doubled between 2011 and 2020*. The total number of funds has been shrinking in recent years as the sector consolidates.

Global financial crisis

*Figures for 31 December of each year Source Luxembourg Financial Sector Supervisory Commission (CSSF)

Number of investment funds

2,000

Early 2000s recession

1,000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Asset management

The pandemic has forced the investment industry to change and will continue to do so. For example, ESG funds, which use green and ethical standards to screen investments, have gained momentum. The sector has shifted towards a virtual workplace, which has created new management challenges. Delano explores these trends, but first, takes a look at compliance technology.

1 “We are still

seeing mostly manual operations” MARCH 2021

Compliance technology challenges. p. 32

2 “It’s inevitable” What will drive ESG growth? p. 34

“We need to help our leaders adapt” 3

Fund firm chiefs share their post-pandemic priorities. p. 36

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European Asset Management Conference

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Topics treated in this business report will be explored in deeper detail during the Association of the Luxembourg Fund Industry’s annual European Asset Management Conference, held online from 16 to 19 March. Days 1 and 2 have a focus on investors, day 3 on regulation, and day 4 on strategy and transformation. events.alfi.lu

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What are the main challenges--for example, changing anti-money laundering and countering the financing of terrorism (AML/CFT) rules--that fund firms need to address in 2021-2022? MAXIME HECKEL Financial industry players are facing growing challenges with their day-to-day operations, compelling them to think and act differently, and, of course, actors in the fund industry are no exception. Between ever-increasing regulatory requirements and the cost of compliance, asset managers and asset servicers--to name but two--are struggling to find the right balance. This is especially true with their AML/CTF frameworks, where we are still seeing mostly manual operations that result in a lack of collaborative work and redundant activities. And, with data and documents spread over different systems (or closets), it is difficult to build a ‘single point of truth’ (know your customer), perform the required monitoring of transactions (know your transactions) and produce real-time performance indicators. CLAUDIO BONFANTI [Referring to transfer agents] lack of transparency and heavy and numerous oversight requests--everybody needs to do oversight on everybody [with] no reliance--leading to congestion and difficulty to prepare files for AML inspection.

Claudio Bonfanti Maxime Heckel

What are the main benefits that fund firms are seeking to achieve in their compliance technology decisions over the next couple years? C.B. Improve investor experience, improve due diligence and operational efficiency, increase transparency and information quality. Provide access to the data directly to management companies, alternative investment fund managers and general partners. M.H. [Goals include] reduced total cost of ownership through mutualised technology, processes, and manpower; and freed-up internal resources, that can focus on core-business activities rather than repetitive and low-value tasks. What are the most common pitfalls that fund firms need to overcome when introducing new compliance technologies? M.H. The most observed pitfall is the integration of new technology layers into the existing heterogeneous legacy stack to provide a quick and tactical answer to the latest incoming regulatory requirements, but the results are clearly not there. Technological innovation has recently accelerated, leading to a wider but also more complex market offering. The industry is therefore struggling to read the technology ecosystem, even at Luxembourg’s scale, e.g., volume of available market solutions, difficulty in comparing them,

huge cost difference for similar features, etc. Finally, the often rigid organisation of fund market players--especially true for mancos--can prevent them from planning and executing often long and costly implementation projects. Industry actors must increase their organisational agility to tackle upcoming challenges. C.B. Selecting a non-local provider that will not necessarily understand immediately local requirements, leading to delays in system adaptation, compliance and a different development agenda. And underestimating the task of digitalising an existing investor base. Words AARON GRUNWALD

ANTI-MONEY LAUNDERING RISK PROFILE Luxembourg has a “very low” weighting for money-laundering risk, according to Refinitiv. It is ranked 4th out of the 240 countries and territories tracked by the data firm. A high “master index” score “is indicative of a safer, low-risk country.” Source

New Zealand Norway Finland Luxembourg Denmark Netherlands Sweden Iceland Switzerland Austria

Refinitiv World-Check

European Fund Administration, Deloitte Luxembourg

Luxembourg faces audits by the Financial Action Task Force this year (although they have been delayed by the pandemic). Delano spoke with two compliance technology professionals about key trends in the asset management sector: Maxime Heckel of Deloitte and Claudio Bonfanti of European Fund Administration.

“We are still seeing mostly manual operations”

Photos

MARCH 2021

Compliance technology

Asset management

Business report

MARCH 2021

ESG growth opportunities

“It’s inevitable” Funds that use environmental, social and governance (ESG) criteria are a burgeoning segment of the investment industry. Delano asked executives at four industry outfits about the most promising opportunities for Luxembourg funds: James Purcell of Quintet Private Bank, Julie Castiaux of KPMG, Kelly Hebert of M&G Investments and Anthony M. Coveney of ThomasLloyd. Do you think ETFs will play an increased role in mainstreaming ESG funds? JAMES PURCELL Whether purists like it or not, ETFs have a huge role to play. They are liquid, cost-effective and highly rulesbased--which helps investors to understand what they are buying. Yes, the majority of ESG ETFs are based upon headline ratings from third-party providers and these tend to oversimplify complex sustainability issues, but undoubtedly ETFs will have a major role in mainstreaming ESG. Volume alone will ensure that. JULIE CASTIAUX It’s inevitable. The demand is clearly there for ESG to reach far beyond the niche group of alternative investment houses it currently inhabits. In the not too distant future, we’ll see ESG products of all stripes on the market, including ETFs aimed at retail investors. KELLY HEBERT We believe the entire market--both active and passive--needs to play a role in promoting sustainability and embedding ESG in the investment chain. ESG-focused ETFs can serve a valuable purpose in providing an accessible and affordable option for clients who want to see their investments aligned

with stronger ESG standards. However as a primarily active manager we believe in the value of taking a more selective approach based on deep fundamental ESG analysis, and that this is likely to deliver better and more sustainable longterm outcomes for clients. What ESG strategies could really stand out in the next 12 months? ANTHONY M. COVENEY Post-covid, governments will need to reboot their economies. Infrastructure investment will be encouraged through fiscal stimulus and regulatory incentives. That, combined with historic low interest rates, is driving investor demand for income-generating real assets. From your point of view, which asset classes are lacking proper ESG screening? J.P. I’d offer a counterpoint and say equities--and that’s despite the long history the equity market has with ESG. I say this because in fixed income one can purchase dedicated assets--assets designed with sustainability in mind--such as green bonds, multilateral development bank debt, microcredit and, increasingly, sustainability-linked loans. In equities, ESG is always a philosophy--a technique to view conventional companies differently, akin to a value or growth approach. Words AARON GRUNWALD

EUROPEAN ETFS Ireland and Luxembourg are by far the largest European exchange-trade funds markets, according to data from Deborah Fuhr of ETFGI, a research and consulting firm. Globally, assets increased by 25.6% last year, reaching a record $7.99trn at the end of December 2020. Source

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Asset management

3 Post-pandemic management

MARCH 2021

“We need to help our leaders adapt”

With covid vaccines starting to roll out this year, Delano asked three fund firm chiefs about some of the most pressing management issues they are facing: Serge Weyland of Edmond de Rothschild Asset Management, Helen Webster of Aberdeen Standard Investments and Rudolf Kömen of Credit Suisse Fund Management.

ees the ability to come to the office is key for their morale and mental health. HELEN WEBSTER It is very difficult to predict the course of the pandemic and we will always follow the guidance of the Luxembourgish government. We are hoping that our staff are able to return more freely to the office as we move into the spring and the level of infection reduces, as we recognise that working entirely at home can be quite isolating and has pracWhen do you expect your staff to tical challenges for some of our staff. be returning more to the office? RUDOLF KÖMEN First and foremost, we priSERGE WEYLAND We currently have on aver- oritise the safety and security of our staff. age around 20% of our staff working in By doing so, we support our business and the office and we don’t expect this num- society sustainably. Currently, only ber to increase substantially over the next about 15% of our staff are in the office. few months. We remain cautious given Taking into account the current situation, the spread of the virus variants. However, I do not expect this number to increase we also believe that giving our employ- in the short term. STAFF COSTS

Investment management leaders reported the actions their companies have taken to reduce workforce-related expenses in a recent survey*. Source 0 %

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*Deloitte Center for Financial Services Global Outlook Survey 2020

What digitalisation trend are you currently most enthusiastic about? H.W. The effective use of videoconferencing to bring people together, creating connections without borders, is an opportunity for us to strengthen relationships and to improve our operational efficiency. It also reduces the carbon footprint associated with business travel. S.W. The pandemic forced us to rethink client and employee communications. Team meetings and client pitches with screen sharing using agile videoconferencing systems have become the norm and are here to stay. It enables us to set up a client presentation from one day to the next, bringing in experts from various locations at a very low cost. This is quite powerful. R.K. The possibility of digital fund distribution--the possibility for clients to buy our products in a modern and easy way is exciting. It brings us, the asset managers, and our products much closer to our clients. What skills and training do you need to invest in? R.K. We are all in a unique home office situation trying to combine work with family--many of those situations are challenging. H.W We need to help our leaders adapt to managing their teams on a remote basis. This can require different forms of communication and working methods to ensure they remain effective. S.W. Efficient team management in a home office environment is challenging. The crisis has put the spotlight on our middle management. Skills such as leadership, efficient communication and empathy need to be encouraged and developed. Staff coaching in a digital environment is not a natural thing and requires tools and techniques.

Don’t know Words AARON GRUNWALD

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Head to head

MARCH 2021

Party politics during a pandemic The LSAP has been in one form of coalition or another since 2004, but what will it take to recover recent losses in the run-up to the 2023 elections, marred by the coronavirus crisis?

Alex Bodry was the LSAP’s president from 2004 to 2014, was elected six times to the Chamber of Deputies and served in government from 1989 to 1999. He is currently a member of the Council of State.

Are the Socialists socialist enough? for dialogue, and if the dialogue is right, ALEX BODRY I wouldn’t say that our elec- then it doesn’t get this far. Our ideas tion programmes from the 1980s were evolve but the party’s basic principles more left or socialist than today’s. We are the same. But I also recognise that have to serve two electorates: One that it’s difficult to defend LSAP interests sees the party almost as a union, but that when you’re in a coalition with two is more conservative. And, on the other other parties. hand, an electorate that is more progres- A.B. Half of the candidates in the last sive on sociopolitical issues. The LSAP election were first-timers. Around a quarmust straddle those two electorates and ter were younger than 40. We are the be authentic and credible for both. That’s only gender equal group in parliament. a difficulty every people’s party faces. A lot has changed. One of the difficulties AMIR VESALI I don’t like the term people’s of having been in government this long party. It implies you are looking in every is that you see everything through the direction and need a wide platform to lens of the coalition. If there’s something get everyone under one roof. In Europe, you know you’ll struggle to find an ally where societies are becoming more diverse for, there’s a tendency to not add it to and pluralistic, that is difficult to achieve. the programme or water it down, so that The challenge for a socialist party is to you don’t face the accusation of not fuldefine what justice and fairness mean for filling your promises. That’s where we us and compare that to our electorate. need to be careful. It’s important to define new areas and In the last election, the LSAP lost address new people. three seats in parliament. In the 2017 local elections, it lost the majority In 2018, there were rumblings within in Esch-sur-Alzette. How can the the party about its orientation, the party recover these losses in 2023? election programme, that it needs to become younger. Have these A.B. The time of absolute majorities at concerns been addressed? commune level is running out for all parties. At local level, the question is A.V. Absolutely. The party president [Yves Cruchten] has recognised the need mostly whether people are happy with their commune leadership. We didn’t lose a lot of votes in 2018 but we lost three seats because of their distribution. It’s important to follow a straight path, not to waver, because then people won’t be able to tell what your position is anymore. Housing will be the crucial question. The party must have firm policies on this in its programme. A.V. I would go one step further. We must say that if we are part of a government, we want responsibility for this portfolio. In terms of the election, I don’t think that we will do worse, but we have to see how this crisis develops until then. That will be decisive.

“ Tax policy is important, and there’s room for more justice”

Politics

“ We need to try and target the upper echelons of society”

The pandemic has raised a lot of questions about the introduction of a wealth or inheritance tax. We bring new topics to the table, like Can the parties afford to delay mental health. Young people see that we decisions on this until the next care about issues they care about. election just because it’s not in the coalition programme? What is the particular challenge to involve people who cannot vote A.B. We don’t know how long this crisis will last and who’s going to pay. No party in politics? is prepared to give a concise answer. A.B. It’s being attempted for decades. I would warn of getting hooked on buzz- Our integration and citizenship working words, such as an inheritance tax. This group, SPIC, has probably worked best. doesn’t have a precedent in Luxembourg. It always boils down to languages. ChapTax policy is important, and there’s room ters that are more multicultural, such as for more justice. I would go in the direc- in Luxembourg City, manage, but it’s tion of a wealth tax, because we used to incredibly difficult. have one. It’s difficult to explain why A.V. This needs to be addressed across income from labour is taxed more highly party lines with a strategy. The question than revenue from capital. These are the about voting rights hasn’t been answered forever by the 2015 referendum. There discussions we need to have. must be a platform for exchange and A.V. An idea like an inheritance tax isn’t innately bad or good. It’s about the effect. consultation, and I could eventually A wealth tax could have the same impact, imagine a consultative body that advises or a property tax. But what cannot hap- parliament and issues opinions on topics pen is that the same mistakes are made that affect foreigners who aren’t being as after the 2008 financial crisis, when represented. Not doing anything isn’t the middle class was massively affected. a solution. We need to try and target the upper echelons of society. Maybe they can afford to find loopholes, but then those loopholes need to be closed. I still think that an inheritance tax is an option. Amir Vesali is the secretary The Young Socialists have been described as the party’s conscience. Do you agree with this? A.B. They are the LSAP’s good conscience that sometimes makes the party have a guilty conscience. They should keep us on our toes to make sure that we keep that government lens in check. A.V. Being the party’s conscience is part of our identity. But there are other important missions. The Young Socialists are there to get fresh blood into the party.

general of the LSAP’s youth wing, the Jonk Sozialisten. He arrived in Luxembourg aged ten as the child of Iranian refugees and studies law. In the 2018 general elections, he came fourth in the North district.

Moderated by CORDULA SCHNUER Photo MATIC ZORMAN

MARCH 2021

What is your impression of how the tone in politics has changed? A.B. It’s rougher. For me, it’s somewhat artificial. It’s an opposition built on words, hooked on details, when you’re actually in agreement on a lot of the substance. I worry that compromise has become a curse word. A.V. Among the youth parties, I have to say that the experience is more positive. We are aware that if we want to have an impact on our parent parties, we must work together.

Essay

MARCH 2021

Challenge 2030 To remain prosperous in 2030, Luxembourg must continue to attract businesses and qualified staff. Ensuring quality homes for these workers, and sustainable transport for them to get to work, will be critical. How will Luxembourg make it happen? Words JESS BAULDRY Illustrations SOFIA AZCONA

Mobility

Housing the workforce The OECD[1] has highlighted the lack of affordable housing as a threat to competitiveness and inclusive growth. Strong demand, driven by housing shortages, a growing and affluent migrant population, low interest rates on property loans and a speculative approach to real estate investment, pushed average Luxembourg houses prices to explode by 90.5% from 2010 to 2020[2]. Prices are already out of step with average earnings. If this rate were to continue unchecked, by 2030, the median price per square metre for a house would reach €12,635 and almost €20,000 for a flat[3]. Given salaries are not expected to grow at the same rate, large parts of society would not be able to buy property. Land speculation, in which owners hold onto plots until the value increases, has been blamed by the government for slowing the rate of construction of housing to meet demand. Because the land is there--in 2020, it was estimated there were 2,840 hectares of land fit for construction[4]. The OECD recommends introducing land value taxes for unused land that has been zoned for housing, or sanctions for failing to use building permits. “Higher recurrent taxes on real estate, based on up-to-date valuations reflecting the market price of the property, could also help to reduce the number of vacant dwellings,” it said. Luxembourg’s “pacte de logement”, a housing blueprint which enters into force in 2021, aims to create more social and affordable housing by empowering communes to find solutions with state support. Among other things, it sets out a quota for 30% of all new housing projects to be composed of affordable and/or rented properties. To tackle land speculation, the document introduces stricter deadlines for developers between securing land and beginning construction. Local authorities, meanwhile, will also be able to combine smaller parcels of land together for construction. Communes take the lead Communes like Differdange have shown that it is possible to take the lead on innovative housing solutions. The Gravity residential project, expected to open in the centre of Luxembourg’s third-largest city in 2023, includes 80 affordable flats, starting at €309,000. Low-income

According to MMUST scenario models, the post-2040 population will be strongly concentrated on the south of Luxembourg and over the border in Lorraine, France, growing by an estimated 287,000. The fast tram linking Luxembourg to Esch, which traces the A4 axis, will serve areas with high expected population and job growth such as Leudelange and the Alzette and Bruch districts of Esch.

land in a general development plan (PAG). “I think it’s important public authorities become owners of the land first then integrate it into the constructable area. If we first integrate it into the constructable area, prices will be too high and we cannot offer houses at the prices we are used to,” he told Delano in 2020[5]. The SNHBM and communes are testing the market with models such as cooperatives, large apartments with small, private living quarters and large communal spaces for people who want to “live together and reduce costs,” Entringer says. In the capital, house-sharing has proved popular with young professionals already. In many instances, property owners convert living rooms into bedrooms to get maximum bang for their buck. The Esch-sur-Alzette local authority recently muddied the waters on this practice when it introduced strict rules on co-housing, meaning that people who are not related by family must sign a joint contract with landlords. The government has since intervened[6]. But it seems no satisfactory resolution has been found.

candidates, the elderly and large families with a history in the commune will get priority. The affordable housing firm SNHBM recently increased its output from 80 low-cost units per year to 350. Elmen, its landmark, low-cost village to accommodate around 2,000 people on farmland in the west of Luxembourg, was only possible through a collaboration with the commune. To avoid the kind of speculative investment that is outpricing modest homes from the market, buyers and renters in Elmen must live there. Eligibility is also dependent on earnings: the lowest earners receiving support, Renting These models are not ideal for everyone, while there is a ceiling on income. The firm’s approach of developing prop- but they are a start for the growing secerties on land that is leased for 99 years, tion of society who can little afford rents a system known as emphyteutic leasing, in Luxembourg. The country’s housing may conflict with an established idea observatory found that in 2018, among that investment in a home is also a pen- 20% of the country’s lowest earners, six sion back-up. Nevertheless, it has proved out of ten households (around 18,000) popular and in November 2019, inter- were spending more than 40% of their ested buyers camped overnight to be income on rent. The most vulnerable tend first in line for an affordable housing to be single-parent households and those project in Alzingen. on fixed-term contracts. The Mieterschutz, SNHBM director Guy Entringer says a tenants’ rights group established in 2020, the main barrier to being able to construct is providing some support and lobbying affordable properties is the cost of land, power. Rents rose 2%-6% annually from which can be multiplied by 10 or 20 the 2019-2020[7] which, according to Mietermoment it is classified as constructable schutz co-founder Aldina Ganeto, means

“ They need to be earning €4,000 a month if you’re just one person. Imagine you’ve two-three children and more rooms.”

MARCH 2021

JOB & POPULATION GROWTH

Essay Mobility

MARCH 2021

middle-income households are now being priced out and many households live in overcrowded accommodation. “They need to be earning €4,000 a month if you’re just one person. Imagine if you’ve two or three children and more rooms,” Ganeto said. Dramatic action will be needed in future to make the rental market more affordable particularly as the effects of the pandemic will impact renters for years to come. An imminent reform on lease agreements should remove some barriers for tenants and owners, establishing co-tenancy agreements and determining distribution of rent and charges. In future, agency fees will be split between tenant and owner while rental deposits will be capped at two months’ rent, as opposed to three.[6]

CURBING SPECULATIVE INVESTMENTS IN LAND & PROPERTY The OECD recommends introducing land value taxes for unused land that has been zoned for housing or sanctions for failing to use building permits. The SNHBM says that public authorities wanting to construct affordable homes should buy land for construction before it is zoned as such in a general development plan. Otherwise, the challenge is that land value rockets when it is designated as constructible. Selling affordable homes on land that is leased for 99 years, or emphyteutic leasing, helps bring prices down and boosts owner occupier rates.

Location, location, location Projects like Elmen could ease access for buyers and tenants by 2030, but only if they get the locations right. The OECD warned against urban sprawl, because it encroaches on the natural environment. While Elmen is located close to Capellen, an employment hub, the nearest train station is five kilometres away. Constructing further away from transport hubs places pressure on the country’s already stressed tially be self-sufficient. Other projects road network. According to GPS data for that will ease road congestion by 2030 2019[8], Luxembourg commuters spent 21 include the expansion of Luxembourg extra minutes per 30-minute trip in the City’s central train station by 2024, to morning, and 22 extra minutes per 30-min- boost train frequency, and several parkute evening trip. Government efforts to and-ride car parks close to train stations electrify private vehicles will not clear the in Rodange (2022), Mersch (2023), roads and so it is shifting to a multimod- Wasserbillig and Ettelbruck (2026)[9]. The al strategy for getting around, involving north of Luxembourg, which is more private and public transport. A game chang- sparsely populated, fares less well in the er will be the planned fast tram, to be built transport stakes. MP André Bauler (DP) beside the A4 motorway. By 2028, it will complained in a parliamentary question, be carrying commuters between Esch, in in December 2020, of growing congesthe south, to the capital, in 14 minutes[6]. tion in the northern canton. It is currently A large number of new jobs is expected served by a single rail line leading to to be created along the tram’s axis by 2030, Belgium. While tweaks to the national notably in Foetz and Leudelange, giving bus network could help in future, it will options for people living in the south, not combat cross-border traffic. where the population is denser, and over The cross-border population the border in France. One of the country’s biggest develop- Even if Luxembourg succeeds in stabiments, housing up to 10,000 people (of lising house prices, it will always rely on which 30% of homes will be affordable), a cross-border workforce, which is why will be on a former ArcelorMittal steel the government is working closely with site in Esch-Schifflange[5]. Expected to counterparts in neighbouring countries be completed by 2040, it will be on the and communes to study and improve tram’s route and well served by buses, public transport. MMUST, a multimodalthough with schools, offices and small al transport scenario modelling group businesses, the mini-town could poten- tracking traffic movements and demo-

graphic projections to identify future gaps in infrastructure, forecasts an additional 287,000 new residents in the perimeter zone of Belgium, France and Luxembourg by 2040[10]. Currently, it says two-thirds of journeys in that area were made by car, 20% on foot and 9% by bus--a ratio authorities in Luxembourg and France will seek to transform over the next decade. Together, they have developed a multimodal strategy to create infrastructure and reorganise transport along the Metz-Thionville-Luxembourg line by 2030. This will include widening the motorway strategically for multimodal transport and creating car parks dedicated to car sharing, among other things. Luxembourg is also working with cross-border authorities to improve links between poorly served suburban areas over the border and transport hubs “with high-speed buses, collective taxis”[11]. The key will be to make it faster and cheaper to take public transport than the car. It won’t be easy. If park and rides become fee-paying, as is the case of the ThionvilleMetzange car park, cross-border workers will insist on driving to work. Remote working, which is possible for half of jobs in Luxembourg[12], could also help lower congestion in these areas. As a post-pandemic prospect, however, it remains hamstrung by cross-border fiscal and social security regulation. Satellite offices in Luxembourg border towns are one solution that has already been explored by employers like Deloitte, which moved 230 staff to Esch-Belval in 2018. No doubt more will follow.

[1] OECD 2019 economic survey of Luxembourg [2] Eurostat [3] Delano calculation based on 2020 Q1-Q3 figures from Immotop [4] Luxembourg government [5] Delano Newsmakers podcast [6] Delano reporting [7] Athome spring 2020 report [8] TomTom [9] CFL [10] Modèle Multimodal et Scénarios de mobilités Transfrontaliers project [11] Greater Region Cross-border Operational Strategy 2021 [12] Becker Friedman Institute for Economics

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MARCH 2021

Time for takeout Nothing beats a delicious takeout or delivery meal after a long day. So, here’s a rundown of some of the best. Words LYNN FEITH

1 Bib to go Bib Gourmand restaurant Two6Two offers its gourmet menus as takeaway options, while chef Baptiste Heugens is also serving freshly made burgers in the restaurant’s Street Bar food truck. www.two6two.lu

3 Food truck bites

2 Pizza party Authentic Italian pizzas, the ultimate takeout food. Cômo chef Renato Favaro steps it up a notch with unconventional toppings and a vegan option as part of his new Lâ Pizza concept. www.comoresto.lu

From tacos to smoked lamb and cocktails, Scott’s food truck doesn’t disappoint with its weekly street food menu. Michelin-starred guests take over the truck’s kitchen now and again. facebook

Scott’s Pub

“One cannot think well, love well, sleep well, if one has not dined well.”

4 Japanese soul food Manzoku specialises in Japanese comfort food, from ramen cooking kits to ready meals. Available at various locations or through GroupLunch, thus also perfect for a tasty lunch break.

MARCH 2021

Virginia Woolf

Did someone say “poulet rôti”? A freshly cooked rotisserie chicken, homemade bread and a fancy bottle of Bordeaux, as well as a smorgasbord of other staples can be found for takeaway or delivery at Rôtisserie Ardennaise. www.rotisserie-ardennaise.com

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6 Sushi galore In a different kitchen, but still serving the same mouth-watering sushi creations, chef Ozawa prepares his delicious dishes to go for Manso group newcomer restaurant Vida. www.vida.lu

3 Fry the bacon When they’re ready, take your Kniddelen out of the water and, in a pan, fry some bacon until crispy. Then sprinkle it over your Kniddelen. Add some cream for extra flavour.

4 Et voilà! Your authentic homemade Kniddelen mat Speck are now ready for you to enjoy. Gudden Appetit!

Photos → Patricia Pitsch, Maison Moderne, Mike Zenari, Rôtisserie Ardennaise, Vida, Shutterstock

Cook a Lu xe

www.manzoku.lu

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MARCH 2021

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Flashback Your events

1,300

The Paperjam + Delano Club organised a round table with 1 Sasha Baillie (Luxinnovation), 2 Carlo Thelen (Luxembourg Chamber of Commerce), 3 Pierre Ahlborn (Banque de Luxembourg) and 4 Jean-Marc Ueberecken (Arendt & Medernach) to discuss the effects of the crises on the Luxembourg economy. Our members were given a few examples of companies that converted their business model to face the issues generated by the crisis.As you know, the Club--being a training institution--regularly organises workshops. 70 of our members attended 360° training events at the Neumünster Abbey. The omnichannel strategies were centre stage of our first 10×6 of the year: a conference that took place at Kinepolis Luxembourg in partnership with Social Seeder and Office Freylinger. 5 Philipp von Restorff, deputy CEO of Luxembourg for Finance, answered in his keynote speech, during a Delano Breakfast Talk, among other questions how to attract, develop and retain, in the future, talents in the financial sector.

COMPANIES The number of companies that are members of the largest business club in Luxembourg.

18,000 MEMBERS The number of individuals who are part of the vibrantly active Paperjam + Delano Club community with whom you will get to interact.

383

EVENTS The number of digital and on-site events. Choose from about 400 conferences, training, networking and workshop events each year.

500

HOURS The number of annual training hours for your employees to develop their hard and soft skills: an additional benefit for you and useful extras for your teams.

2 1

HOW TO ATTEND PAPERJAM + DELANO CLUB EVENTS ?

You’re already a member Please check our website club.paperjam.lu. Select, among all the digital and on-site events listed, the ones you would be interested in, fill in the registration form at the bottom page and register.

You’re not a member yet Please email the Paperjam + Delano Club via club@paperjam.lu and an account manager will be in touch to introduce you to all the perks offered by the largest business club in Luxembourg.

6 Jean Louis Catrysse (Inreg) 7 Stéphane Compain (LuxRelo)

Programme February/March

MARCH 2021

Wednesday 24 February

Start-up Stories (1/4) TIME 18:30 – 22:30 Livestream Thursday 25 February 10×6

10(0) women who lead TIME 18:30 – 22:30 Livestream SPONSOR Enovos Thursday 18 March CEO & ENTREPRENEURS COCKTAIL

“Combining digital efficiency with human empathy.”

Post-Covid-19 review of state finances and the impact on taxation

Adrien Kirschfink Accenture

TIME 18:30 – 22:30 Livestream SPONSOR ING Thursday 25 March

Herwig Temmerman BearingPoint

Photos

“Humanity has made a long journey.”

Simon Verjus and Julian Pierrot (Maison Moderne)

10×6

Finance: Luxembourg post-Brexit TIME 18:30 – 22:30 PLACE Athénée de Luxembourg SPONSOR Enovos

011 BY MIKE K N2 OE DI DI DE

N GE

FO UN

FEBRUARY 2021 EDITION EDITORIAL DIRECTOR

MARCH 2021

Mike Koedinger EDITORIAL DEVELOPMENT DIRECTOR

Editorial Phone (+352) 20 70 70-150 E-mail news@delano.lu DESK EDITOR

Aaron Grunwald (-152) JOURNALISTS

Jess Bauldry (-153) Lynn Feith (-164) Natalie Gerhardstein (-154) Cordula Schnuer (-163)

Nathalie Reuter EDITOR-IN-CHIEF

Duncan Roberts (-151)

Brand Studio Phone (+352) 20 70 70-300 E-mail regie@maisonmoderne.com STRATEGIC BUSINESS DEVELOPMENT ADVISOR

Francis Gasparotto (-301) HEAD OF SALES OPERATIONS AND PEOPLE

COMMUNITY MANAGER

Lionel Scaloni

Christophe Lemaire

HEAD OF MEDIA SALES AND SOLUTIONS

PROOFREADING

Pauline Berg Lisa Cacciatore Sarah Lambolez Elena Sebastiani PHOTOGRAPHY

Mike Zenari Romain Gamba Matic Zorman

Publisher

Dominique Gouviaux (-338) COMMERCIAL ASSISTANT

Céline Bayle (-303) MEDIA ADVISORS

Stéphanie Cregut (-385) Nicolas Galtier (-318) Mélanie Juredieu (-317) Virginie Laurent (-322) Aline Puget (-323) Léo Santoro (-335) Mikaël Spezzacatena (-326) CREATIVE DIRECTOR

Jeremy Leslie HEAD OF PRODUCTION

www.maisonmoderne.com Phone (+352) 20 70 70 E-mail publishing@maisonmoderne.com FOUNDER AND CHAIRMAN

Mike Koedinger CEO

Geraldine Knudson ADMINISTRATIVE AND FINANCIAL DIRECTOR

Etienne Velasti Maison Moderne is a partnership between Francis Gasparotto, Mike Koedinger and Etienne Velasti. PUBLISHING DIRECTOR

Mike Koedinger STRATEGIC BUSINESS DEVELOPMENT ADVISOR

Francis Gasparotto DEPUTY DIRECTOR, BUSINESS CLUB

Ana Wiscour-Conter CHIEF DIGITAL OFFICER

Viktor Dick HR MANAGER

Stéphanie Poras-Schwickerath

Anaïs Bouillet/Sylvie Notarnicola

HEAD OF ART DIRECTION

ADMINISTRATIVE MANAGER

Vinzenz Hölzl ART DIRECTOR

José Carsí LAYOUT

Sophie Melai (coordination), Stéphane Cognioul, Juliette Noblot, Guillaume Sinopoli MANUFACTURING MANAGER

Sylvia Leplang DIGITAL PROJECT MANAGER

Meryem Alamy DISTRIBUTION MANAGER

Kévin Thirion IT MANAGER

Matthew Dixon

Myriam Morbé

To contact staff members

All rights reserved. Any reproduction, or translation, in whole or in part, is prohibited without the prior written consent of the publisher. © MM Publishing and Media S.A. (Luxembourg). Delano™ and Maison Moderne™ are trademarks used under licence by MM Publishing and Media S.A. ISSN 2220-5535

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In accordance with article 66 of the law of 08.06.2004 on the freedom of expression in the media, the following statement is obligatory “one time per year, in the first edition distributed.” We have decided to publish it each month. The company that publishes Delano is indirectly held, by a stake exceeding 25%, by Mike Koedinger, a publisher registered in Luxembourg. Geraldine Knudson is chartered with general and daily management.

MARCH 2021

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Business, finance, politics and more each day

NEXT EDITION: JULY 2021

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ECOSYSTEM

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Pick’n’mix

A memorable decade

Catherine Lebrun

Gabriel Boisante

MASTERMIND & CO-FOUNDER OF CREATIVE PROJECTS, INCLUDING CHARLOTTE IN RED VIDEO PLATFORM

MEDIA RELATIONS AND EDITORIAL SENIOR MANAGER, PWC

CLUSTER MANAGER CREATIVE INDUSTRIES AT LUXINNOVATION

FOUNDER OF SUBTILE DESIGN SHOWROOM AND ART GALLERY

MANAGING PARTNER IN HOSPITALITY SECTOR

I was financial controller at Kneip, which I joined in 2005. A fantastic experience.

I was partner and business development manager at an interior design company.

Personally, my kids. Professionally, the career flip to restaurant and bar owner.

I moved back to Canada and started working for Baffinland. It was one of the greatest working gigs.

I launched the first edition of the Young Drivers’ Day.

Initiating and leading the ‘Dzigning the Timeline’ project with Israeli & Luxembourgish designers.

My son Philip’s wedding, the birth of my lovely grandchildren.

It has to be the births of Finn, my 5-year-old son, and Olivia, my 2-year-old daughter.

Just building a strong and loving team with my 2 children. Trivial but incomparable.

Letting go of the financial security of employment... a kamikaze act really, but I would do it again.

I don’t stay out all night as much as I used to (even pre-covid). But when the pandemic is over, I might go bananas and dance with my friends for a day or two.

Combine a dog with two small kids and lie-ins are pretty much a thing of the past.

I am not a person of habit. I like constant change, which can be tiring for others…

Where would you like to be in 2031 ?

Who do you think will be in charge of Luxembourg in 2031 ?

Streaming at home or theatre with an audience ?

Can you share a personal highlight of the last 10 years ?

I was living and breathing biotech day and night at the ministry of the economy.

Definitely theatre with an audience.

I don’t know who, but I feel that Luxembourg’s traditional two-party coalition is a thing of the past.

Living in a loft close to Tel Aviv beach, working with talented musicians, filmmakers & artists.

I enjoy watching movies at home, but nothing beats a movie theatre--and nothing will ever top Cabin Fever at Cinénygma.

There are a lot of amazing young people in Luxembourg, so I feel optimistic. A woman would be nice.

Enjoying my grandchildren and sons, so probably in Canada.

Streaming at home because of you know what…

Superjhemp.

In Superjhemp’s good books. Failing that, I’ll pick Montreal as I love the place and the people.

Appreciating an artist like Chilly Gonzales on stage.

I started practising martial arts again. For me, it’s the best way to find balance in life.

Since an early age, the theatre has been my favourite, as long as people control their nacho chewing and popcorn addiction.

The world of tomorrow will be governed by women. But who? She is certainly not yet known…

I hope for a social government that will prioritise and fight for human, environmental and progressive values.

Somewhere I can share the pleasure of my actions and create emotions for people.

The proud owner of a successful hospitality group that will have grown and diversified. More involved in education and environment projects, and still active in political life.

Shutterstock, Sebastien Goossens, Romain Gamba

Marc Lis

Max Earey/Shutterstock, Samsa Film, Chilly Gonzales,

Mary Carey

Photos

Patrizia Luchetta

What one habit have you changed in the last decade ?

What were you doing in 2011 ?

MARCH 2021

Five people whose careers and lives have changed significantly over the last 10 years.

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