Insights / 04 December 2019

Thoughts from ALFI’s PE & RE Conference

Daniela Klasén-Martin

ALFI’s PE & RE Conference: the annual meeting of the world’s leading alternative investments community in Luxembourg

Having returned from the #ALFI PE & RE Conference, it was encouraging to hear how alternative investment funds have continued to grow exponentially in Luxembourg outpacing UCITS and are attracting interest from outside the EU.

Appetite for the Luxembourg fund structuring toolbox has certainly increased. In addition to being a sponsor and exhibitor, the team from Crestbridge enjoyed being among the 500+ delegates gathered for two days of panel discussions on the key issues facing private equity, real estate and private debt. 

Key takeaways include:

  • AIFs are set to continue to grow having witnessed global AuM tripling to nearly $9 trillion in the decade up to 2017

  • The global AIF industry is set to double in size over the next five years

  • Alternatives now constitute 17% of total AuM domiciled in funds in Luxembourg

  • Over three quarters of investors are expecting to increase their allocation to alternatives

  • Luxembourg-domiciled AIFs are in a strong position to capitalise on this growth in interest and investment

Private Equity

  • The size of the average PE fund domiciled in Luxembourg has increased by 50% since 2018

  • The number of €1 billion+ PE funds has also doubled in a year

  • Luxembourg accounts for 4.3% of the global PE fund industry

  • Unregulated investment vehicles such as RAIFs and limited partnerships now represent 51% of all Luxembourg funds

  • The Grand Duchy is being embraced by US funds who represent 8% of the Luxembourg PE population

  • Dry powder is at an all-time high as it is hard to find deals at good valuations

Private Debt

  • 2019 saw a 14.5% climb in AuM in Luxembourg private debt funds, to a total of over €56 billion, representing an impressive 40% increase in the last two years

  • The number of private debt funds using a RAIF structure rose from 13% - 20% of total funds in 2019

  • Direct lending strategies almost doubled to 32% of the private loan market, up from 18%

Real Estate

  • The number of RAIFs launched focused on property grew from 27 to 63 in the last year, an increase of 133%

  • The number of AIFs has also seen a marked expansion and has grown to 41 in 2019 – an increase of 51.9%

  • Increased interest from non-EU countries – in particular the US

If you'd like to know more about Crestbridge in Luxembourg, please get in touch Daniela Klasén-Martin