Luxembourg: funds in flux

For a small country of just 660,000 people, Luxembourg can boast some big numbers. Total net assets in the Grand Duchy’s investment funds amount to around €5.2 trillion, making it Europe’s largest fund centre, and the second largest worldwide after the United States. The share of net European alternative assets under management held by Luxembourg-domiciled funds increased from 15.6% in 2010 to 61.8% in 2022, according to Preqin.

Luxembourg is also the world’s largest distribution centre for investment funds, which are offered in more than 70 countries. Alongside Germany, Denmark, Netherlands, Sweden, Norway, Switzerland, Singapore and Australia, Luxembourg is one of the very few countries to have highest AAA credit rating from all three ratings agencies: S&P Global, Fitch and Moody’s Investors Service. It is therefore no surprise that sovereign wealth funds and large pension funds – attracted by robust regulatory control, legal certainty and tax efficient frameworks – choose Luxembourg for their investment platforms, holding companies, and feeder funds.