Michael Sanders, chief executive of Alceda Fund Management, says this is because Luxembourg offers a wealth of benefits. The political environment is extremely stable, and due to its location in Europe, many of the staff are multilingual – a great asset for those looking to branch out across regions and into new territories. Moreover, Luxembourg has one of the best infrastructure set-ups for the fund management industry, such as outsourcing service providers like our own that help to set up UCITS funds efficiently.
Luxembourg is tax- and cost-efficient, making it a competitive domicile in the current climate. The government in Luxembourg will do what it takes to ensure it remains the leader. A further key advantage is that the regulator and the political authorities are fast-moving, which is illustrated by the fact that Luxembourg was the first country to integrate the UCITS IV Directive into the local legislative framework, in December 2010. This positive and dedicated approach from the regulator gives managers confidence in the jurisdiction.
The UCITS regime, and particularly UCITS IV, already allows funds operating in Luxembourg to reach out across the European Union (and beyond). The extension of the passporting system to fund management companies, as well as the admission of master-feeder structures to the regime, is likely to prompt firms to concentrate all their resources in a single location instead of having them spread around the continent.
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