UK fund groups flock to Luxembourg as AUM in Ucits funds reaches record levels

Europe-European-Flags-EU-700.jpgMore UK fund firms are making plans to launch funds in Luxembourg as the European Ucits fund hub reaches a record €3.7trn (£3.1trn) in assets under management, according to the Association of the Luxembourg Fund Industry.

Following groups such as M&G, who have already sought permission from the Luxembourg authorities to launch a new Ucits fund, ALFI understands other firms “will make public similar plans in the next weeks and months”.

The annual growth of 6.7 per cent in assets in the European jurisdiction has been driven by an increasing interest from asset managers of private equity, real estate and hedge funds, the ALFI says, especially since the Alternative Investment Fund Managers Directive kicked off.

Total assets managed in the UK by the Investment Association members is £5.7trn as at December 2015. Of these, nearly £900bn are assets in UK authorised funds.

ALFI chairman Denise Voss says: “These record figures and the strong net sales that we continue to see demonstrate that Luxembourg remains a preferred global fund hub.

“UK asset managers, and those asset managers from other non-EU countries who currently use the UK to access investors in Europe will, once the UK leaves Europe, have to domicile their funds in an EU member country.

“Luxembourg continues to be one of the most sought after EU countries for setting up investment funds and fund management companies and clearly this will continue throughout the Brexit process.”