With reference to the Annual Report for 2021 recently issued by the Association of the Luxembourg Fund Industry (ALFI) and the statistics published by the European Fund and Asset Management Association (EFAMA) for the same year, below is a quick overview of Luxembourg's position within the sector.
At the end of 2021, the net assets of investment funds domiciled in Europe (UCITS and AIFs) totaled EUR 21.9 trillion: Luxembourg was confirmed as the largest domicile with about 3500 UCITS and AIFs and a market share of 26.8%.
A very interesting point to be made in this European scenario relates to conventional and sustainable investment funds: Europe holds 83% of global sustainable funds’ net assets, reaching almost EUR 2 trillion at the end of 2021, up 71% from 2020. Sustainable fund products reflect 16% of total net assets of funds domiciled in Europe, ahead of the US and Asia, with only 1% and 5% respectively. Luxembourg maintains its market leader position with about a third of the assets managed by sustainable funds in Europe being domiciled there: sustainable funds accounted for EUR 664 billion by the end of 2021 followed by Ireland with EUR 279 billion.
Total net assets in the Grand Duchy investment fund industry hit EUR 5.9 trillion mark in December 2021 - this corresponds to a year-on-year increase of 17.8%, or 886 billion EUR; the strong demand for Luxembourg UCITS funds and private assets (private equity, real estate and private debt), which have seen consistent growth over recent years, remains unabated.
The jurisdiction has registered a significant growth also in alternative investment funds: over the last three years, net assets under management in regulated alternative funds in Luxembourg have increased by nearly 33% (including for private equity, real estate, private debt and other alternatives such as hedge funds).