25 January 2017

Financial Times: Private equity looks to Luxembourg for access to single market

Leading private equity groups are applying for the right to market and distribute funds in Luxembourg as the likelihood fades that the UK will remain in the single market, several people familiar with the matter said.

Carlyle and Blackstone, the US buyout groups, are leading the move — that will give them “passporting” rights and allow them to sell their services throughout the single market — as the sector seeks new ways to ensure it will be able to continue operating on the continent following Brexit.

Under current regulation, funds from outside the European Union are required to register separately in each country where they want to market.

Other asset managers are also preparing to use Luxembourg as a base in order to market and distribute their funds across the EU and over uncertainty as to whether the UK will remain in the single market, a person familiar with the matter said.

Blackstone is also hiring six people in finance, accounting, risk and compliance in Luxembourg to market and distribute funds in Europe, a person familiar with the move said.

Both companies, which together manage roughly $480bn of assets globally, already have staff in the country but the move is a clear sign that large asset managers are looking for ways out of the Brexit impasse.

“It has become clear to [these companies] that [they] will now need a way into the EU,” a person close to the moves said. “Being in the EU has substantial monetary implications. If [they] are not there, then [they] would be turning off a pool of capital.”

Full article on Financial Times (subscription required)

 

© Financial Times