“As operational and regulatory complexity intensifies, Luxembourg stands out by offering the expertise, infrastructure and talent for asset managers with global ambitions,” said Britta Borneff, chief marketing officer at Alfi, in a press statement on Thursday 24 April 2025. Library photo: Romain Gamba

“As operational and regulatory complexity intensifies, Luxembourg stands out by offering the expertise, infrastructure and talent for asset managers with global ambitions,” said Britta Borneff, chief marketing officer at Alfi, in a press statement on Thursday 24 April 2025. Library photo: Romain Gamba

Cross-border fund assets reached €7trn by the end of 2024, with Luxembourg managing nearly half, said the Association of the Luxembourg Fund Industry. Fee pressure, industry consolidation and global expansion are reshaping the market.

Cross-border investment funds reached €7trn in assets under management by December 2024, reported the 2025 edition of the Cross-Border Distribution of Investment Funds Study, by the Association of the Luxembourg Fund Industry (Alfi) and Broadridge on 24 April 2025. The report concluded that this milestone reflected a significant deepening of the global footprint of these funds, despite mounting market and regulatory pressures.

Luxembourg’s central role

The report noted that cross-border funds, particularly Ucits structures born in Europe, had become integral to the global asset management industry. Luxembourg emerged as the clear leader, managing nearly half of all global cross-border assets, thereby reinforcing its status as a central distribution and regulatory hub.

The study highlighted that cross-border AUM accounted for between 8% and 49% of total assets in all global regions, excluding North America. It also noted that over 10% of Ucits fund assets were now held outside Europe, indicating the growing international appeal of these structures.

Regional expansion

Asia-Pacific established itself as the second-largest region for cross-border funds, with Hong Kong, Singapore and Taiwan cited as critical distribution centres. The report further observed increasing adoption of Ucits funds in the Middle East and Latin America, where investors sought products perceived to offer regulatory certainty and quality assurance.

Fee pressure and market consolidation

The study reported that fee compression and industry consolidation, largely attributed to the continued growth of passive investing, were driving structural changes within the market. These dynamics were reducing the number of active players and shifting competitive dynamics towards fewer, larger fund managers.

In response to these pressures, the report noted a strategic pivot towards active exchange-traded funds. It found that the growing popularity of active ETFs reflected both increased investor demand for flexible investment options and a broader industry shift towards innovation under market stress. Despite the rise of passive strategies, the report indicated that demand for resilient, actively-managed products remained strong, particularly in the private equity space. The study concluded that the cross-border investment fund landscape was evolving rapidly due to investor sentiment, fee sensitivity, market consolidation and growing regulatory complexity.

Commenting on the report’s findings, Alfi’s chief marketing officer  said that Luxembourg remained a key hub for cross-border fund distribution, holding nearly half of global cross-border assets. She noted that future growth would be shaped by structural trends and investor sentiment, highlighting that Luxembourg continued to offer the expertise, infrastructure and talent required by globally ambitious asset managers in an increasingly complex environment.

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