AGEFI Luxembourg - avril 2021 - édition gratuite

AGEFI Luxembourg 34 Avril 2021 Fonds d’investissement T he first day of the ALFI Eu- ropeanAsset Management Conference 2021 (16.3.2021) offered insights into the trends sparked by a tumultuous past year, but also opportunities ahead for both traditional and alterna- tive assets bymanagers willing to grasp the themes of ESG and digi- talisation. ALFI chair Corinne Lamesch (picture) noteda5%rise innet assetsundermana- gement in the Grand Duchy, which hel- ped take total AuM past EUR 5 trillion in the 12 months to the end of January 2021 – despite the impact of the pande- mic in early 2020. Describing the indus- try as being at a “crossroads”, she also notedBrexit is a reality, that globalisation is being challenged, leading to pressure on asset managers’ business models as they ponder delegation, and that mar- gins continue to fall as the success of low- cost passivemanagements feed investor appetite for more. On the upside, the industry is set to leve- rage opportunities out of long-term sus- tainableinvestmentthemes.Theintroduc- tion of the EU Sustainable Finance Disclosure Regulation is just the start of a journey to provide additional clarity to investors onwhat exactly constitutes sus- tainable investment products. China and digitalisationoffinancialservicesandpro- ducts also offer future hope. Mark McFee, Director, Global Insights at Broadridge noted that active managers didwell Q2-4 2020 inEurope, with inves- tors partial to high conviction strategies. The trend could continue through 2021, albeitalongsidealong-termtrendtowards passive. Thatwasmatchedon the private investments side by data from Dave Lowery, Head of Research Insights at Preqin, who described the European pri- vate capital fundraising year gone by as “remarkably resilient”. Carolina Minio-Paluello, Global Head of Product,SolutionsandQuantatSchroders touched on the industry digitalisation theme by noting that 'client-centricity', or 'personalisation'fromaproduct/solutions structuringpointofviewmeanstheindus- try needs to be able todelivermore lower minimum separate accounts. Daniel Rotherford, Global Head of Product Management & Governance at HSBC GlobalAssetManagementchimedinthat “itisonlyamatteroftime”beforeAmazon and others move on the asset manage- ment space, givendigitalisation. Continuing that theme, but in a different sense, Marija Skramic, Associate, Investments Infrastructure at Brookfield AssetManagement outlinedexpectation of pending $ 1.5 trillion capital invest- ments in data assets around 5G, fibre to the home, etc., described as 1-in-100 years upgrade cycle. Shawana Fayolle, ManagingDirector at Bentall GreenOak identified a commercial real estate angle to the theme: European online retailers need a lot more space. Regulationdrivesmuchbywayofindus- trydevelopment.However,theconference heard unequivocally a ‘No’ to ripping up Level 1 of the AIFMD as part of any review. That does leaveabit of agreyarea regardingLevels2and3suggestedAgathi Pafili, Head of Europe Government Relations at Capital Group, Martin Bresson, Public Affairs Director at Invest Europe, and Jeff Rupp, Director Public Affairs at INREV. Finally, Brad Caswell, Investment Funds Partner at Linklaters LLP outlined his expectations of the impact on theUSasset managementindustryoftheBiden-Harris administration.InterviewedbyHermann Beythan, Partner at Linklaters LLP, Caswellsuggestedassetmanagersshould expectregulatoryfocusonareasincluding operational resilience, private equity/ hedge funds conflicts of interest issues, ESGpriorities, digital assets&crypto. Source:ALFI ALFI European Asset Management Conference 2021 Wrap up of day 1 D ay three (18March) of the ALFI EuropeanAssetMa- nagement Conference 2021 sawa deepdive intomultiple fa- cets of regulation, with insights fromregulators aswell as forward- looking expectations fromasset management and asset servicing professionals engaged inbuilding mechanisms to deal with a pen- dingwave of regulatory changes. Marc-André Bechet (picture), Deputy Director General, ALFI, welcomed dele- gatesbyframingtheSFDRasthestartofa long transition process to ‘green’ the eco- nomy, preferably through engagement and a best-in-class approach. Theeventthenmovedontotwokeyregu- lator views, from Ugo Bassi, Director of Financial Markets at DG FISMA - EuropeanCommissionandMarcoZwick, Director, Commission de Surveillance du Secteur Financier (CSSF) inLuxembourg. In his keynote, Bassi make a crucial state- ment on theAIFMDreview, noting that it will not look to tear up existing Level 1 implementation, but limit itself to “targe- ted improvements and clarification” in areas such liquidity management tools, data gaps as relevant to financial stability, and loan origination. The review is not intended to be a revolution, he stressed. Other matters on the agenda for the European Commission include ELTIFs, anti-money laundering, and MiFID/MiFIR in context of Capital Markets Union objectives. Bassi also des- cribed the equivalencemodel as the right one to use in respect of Brexit and the ongoing work towards a Memorandum of Understanding (MOU)with theUK. Zwick, interviewedbyCorinneLamesch, chairperson,ALFI,re-iteratedtheideathat SFDR is just the start of the sustainable investment journey. More related regula- tion will come, he suggested, but will be worthitwheninfuturethereisalookback at the changeswrought. ExistingregulationinLuxembourgsurvi- ved its Covid stress test, as measured by the low ratio of funds suspended earlier in the pandemic, theway the local indus- trywas able to shift to newways of wor- king, and the availability anduse of liqui- dity management tools. Lessons learned during thepandemic regardingCSSFvir- tual on-site visits are likely to be applied ongoing. The day also saw delegates taken on a ‘regulatory journey’ by the troika of Silke Bernard, Partner, LinklatersLLP,Nathalie Dogniez, Partner, PwC and Michèle Eisenhuth,Partner,Arendt&Medernach, who discussed not only sustainable finance via the SFDR and Taxonomy, but also products intended tomeet long term savings and investment needs suchas the PEPPandELTIF,consumer/retailinvestor issues such as PRIIPs and fees, and a raft ofotherregulatorychangesnear-termand long-term. Echoing the comments of Ugo Bassi, Evelyne Christiaens, Head of the Legal Department, ALFI and Hema Jewootah, Conducting Officer, Chief Compliance Officer and MLRO, Lombard Odier Funds (Europe) S.A., addressed specifics inregardstoanti-moneylaunderingdeve- lopments in Luxembourg, and the requi- rements placed on entities, their boards andmanagers ongoing. And Marc-André Bechet, Vanessa Camilleri, Head of Office, Member of Management, Partners Group (Luxembourg) S.A., Johannes Höring, LocalManagingDirectorandConducting Officer, GAM (Luxembourg) S.A. and SeanO'Driscoll,CountryHead,Managing Director, Universal-Investment- LuxembourgS.A.,tookonthemeatytopic of CSSF Circular 18/698, as applicable to investmentfundmanagersforsomeyears now; to understand lessons learned in areas such as oversight of delegates, and howdigitalisationandautomationcanbe used to reduce the operational burdens associated with this particular piece of regulation. Roundingouttheofficialprogrammewas a Masterclass hosted by State Street, loo- king at diversity and inclusionwithin the industry. Here, State Street colleagues Abdel Hmitti, Head of EMEA Private Equity and Real Assets Servicing, Loreto Calaf, Investment Compliance Analyst – NextGen&LatinAmericanProfessionals Group networks, Marin Gurlevsky, Business Analyst, Client Program Office, BarbaraL.Mabe, Financial RiskManager, Chair of Race & Ethnicity Network, and Veronika Zukova, EMEA Head of Alternatives Segment Strategy, pondered thestridesmadethusfar,butalsohowthe definition and purpose of diversity may changeagaininfuture,partlyasmorerele- vant workplace and employee data becomes available, but also as a genera- tional shift occurswith an increasing pro- portion of Millennials and Gen-Z people joining the industry. In an additional off- programme session, CSS hosted a Zoom meeting looking at the future of fund reportingandtheimplicationsoftheintro- duction of, initially, Level 1-linked repor- ting requirements of SFDR. Source: ALFI Wrap up of day 3 D ay two of theALFI Euro- peanAssetManagement Conference 2021 (17.3.2021) delved into several key top level political, legal andbusiness envi- ronment topics affecting assetma- nagement and servicing, including insight into the state of Luxem- bourg as a domicile – ahead of the more technical aspects of regula- tion set to be discussed tomorrow. Emmanuel Gutton (picture), Director Legal &Tax,ALFI, remindeddelegates of the Association’s Working Group efforts aroundtheAIFMDreviewandhowithas been pushing to make Luxembourg’s voiceheardattheEuropeanCommission. That batonwas picked up byH.E. Pierre Gramegna, Luxembourg Minister of Finance. He touched on the resilience experienced not only by Luxembourg as a financial centre during the pandemic, but also theproven resilience of EUregu- lation intended to ensure the assetmana- gement industry can attract capital and manage it safely during a crisis. Data in thewakeof thepandemichasproved the sceptics wrong about the impact of human activity on the climate, thus illus- trating the role the asset management industry must play in responding to the climatechangechallenge.Andwithsome 80% of existing sustainable funds being European, there is a key ongoing role for Luxembourg as a financial centre in gro- wing sustainable investments, he noted. What the government can do is create a fiscal and legal framework to not only supportsustainableinvestments,butalso facilitatedigitalisationoftheindustryand makeiteasierforlocallybasedbusinesses to attract international talent. Elements related to Gramegna’s points - people, skills, outsourcing, operating models, technology and the shift from traditional to alternatives –were the focus of a panel constituting Rajaa Mekouar, Private Equity investor, former CEO and Chairwoman of LPEA, Eduardo Gramuglia, Senior Vice President, State Street Bank International GmbH, Luxembourg Branch, Brian McMahon, Managing Director - Global Head of Alternative Sales, Asset Servicing, BNY Mellon andPaul Conroy, GroupHead of RealAssets,AztecGroup. Asapanel,theyobservedthattoanextent, the office of the future was on horizon evenbefore thepandemic, but Covidhad brought it into the present through use of IT, newworking practices and the link to diversityprogression. Change has also come to third party management companies (‘ManCos’) and AIFMs,whichwas the topic discussedby Maria Löwenbrück, Executive Board Member,UnionInvestmentLuxembourg S.A.,SteveBernat,FoundingPartner,ONE group solutions, Arnaud Bouteiller, General Manager - Member of the Executive CommitteeCasa4Funds, and MartinVogel, CEO,MDO, aDMSGroup Company. While there may be no such thing as a typical ManCo client, they agreed that consolidation in the sector is coming, along with a new wave of tech implementation and automation to improve services, and a need therefore to engagewith regulators. Brexit and the practical challenges facing marketeers anddistributorsof fundswas also in the spotlight, as Jerôme Wigny, Partner, Elvinger Hoss Prussen, Philip Bartram, Partner, Travers Smith, and Rupert Rossander, General Counsel (EMEA), Invesco, discussed the implica- tions both for UK managers seeking EuropeaninvestorsandEuropeanmana- gersseekingUKinvestors.Brexithastrig- gered practical and theoretical ‘worka- rounds’ for marketing and distribution, they noted. But regulatory risk remains, suchas newlawin theUKthatwill leave HMTreasuryresponsibleforequivalence decisions. Lawyers meanwhile are left pondering legal 'salami slicing' of staff roles and identifying possible ‘chape- rones’ for specific marketing and distri- bution purposes. Wrapping up the day, Morningstar brought a Masterclass on SFDR and the EUTaxonomy,inwhichOlivierGoemans, Head of Investment Services and Innovation, Banque Internationale à Luxembourg shared thoughts around upcoming EU regulation. Hermen Molendijk,HeadofMorningstarBenelux, Tim Walton, Data Director, Morningstar, Margaret Stafford, Senior Product Manager, Morningstar, and Andrea van Dijk, Executive Director, Commercial Strategy EU Action Plan, Sustainalytics, outlined specific developments that users of investor data services can expect in the wake of themountainof newdata expec- tedtobemadeavailableasassetmanagers and underlying companies held in port- foliosrespondtothenewregulatoryrequi- rements imposedby the EU. Source: ALFI Wrap up of day 2