Luxembourg: net AUM fund industry 2021

Across the considered period, net assets under management (AUM) of the investment fund industry in Luxembourg steadily increased. As of 2021, it reached a value of approximately 5,859 billion euros. This indicates a growth rate of 18 percent in the last 12 months. The AUM value reached at the end of 2021 is roughly three times higher than that reached in 2006, indicating a strong growth of investment fund assets over time in the Grand Duchy.

How big is Luxembourg’s investment industry?

In 2020, the assets of investment funds located in Luxembourg were worth 8,535 percent of the country’s GDP. The investment fund industry of Luxembourg is the largest in Europe and second in the world behind the United States. At the end of 2020, the number of investment funds or Undertakings for Collective Investment (UCIs) reached a total of 3,611, a decrease compared to previous years. UCIs are financial institutions that collects capital among investors and manages that money collectively following an established investment policy. These can offer two main investment assets: an UCTIS (Undertakings for Collective Investment in Transferable Securities, which at its core stands for investment funds that are domiciled in Europe and regulated by the European Union) or an AIF (Alternative Investment Funds, all investment funds that have not yet been regulated by the EU such as hedge funds or private equity funds).

What is the size of the private equity market in Luxembourg?

Luxembourg has different legal structures to set up a regulated venture capital or private equity firm, such as the investment company in risk capital (SICAR), the specialized investment fund (SIF) or the reserved alternative investment fund (RAIF). Nonetheless, the total AUM of all these funds together was roughly 78.8 billion euros at the end of 2017. Typically, the investors that tend to invest in private equity (i.e. shares representing ownership or an interest in an entity which are not publicly traded) are large institutional investors or high-net-worth individuals (HNWIs).