Finance experts on 19 January gathered for Swissquote’s first Investment Day conference to discuss the challenges and opportunities for 2023 and beyond. 

With some 350 attendees attending the event, interest in institutional and personal investments in Luxembourg proved to be alive and well on 19 January. In a series of roundtables and keynotes, a line-up of experts active in the fund industry covered topics like the resilience of Luxembourg in the face of a persisting polycrisis, its leading position in sustainable finance, upcoming challenges like compliance with new regulation like the SFDR, recent developments in the crypto world and the attitude to adopt in an economic crisis.

5 takeaways for institutional investors

“The stability is certainly due to the nature of the long-term investment horizon of funds, but more specifically to Luxembourg I think is very much due to the diversification of our industry. Having built our brand in the more liquid fund space for several years now, we’ve given ourselves the toolbox to attract a significant number of alternative funds over the past few years,” Steve Bernat, founding partner of ONE Group Solutions said.

Attention to detail and compliance will be key with new regulation coming up in 2023. The Sustainable Finance Disclosure Regulation (SFDR) has been and will continue to keep the industry busy, as fund promoters will have to update prospectuses, reports and websites meticulously to match the new requirements. “Anticipate additional rules” in matter of sustainable finance, Yves Elvinger of Elvinger Hoss Prussen advised.

Mergers and acquisitions clients are wondering if it’s the right time to sell or if it’s a bit late, Joachim Heukmes, partner at Deloitte notes. Uncertainty and a wait-and-see attitude is permeating the mindset of clients. As they prepare companies for sale, Heukmes has one piece of advice: “It’s all about finding the right buyer for each transaction and the right buyer is the one benefiting from the biggest value creation in the transaction,” in other words, the one with “the highest amount of synergies.” The timing, momentum and right partner will be key considerations for clients.

Crises bring forth creativity and opportunity, Financial Times columnist, master of ceremony and author Tim Harford reminded during a keynote looking back at the covid-19 pandemic. Disruption may be uncomfortable, but will bring out an alertness in players--therefore it should be welcomed and utilised as best as possible to break free from routine and usual solutions. “Disruption is here, and I think sometimes, we don’t address it the way we could,” he remarked.

Trust in the upcoming Mica regulation, said the experts at the roundtable on crypto markets. “It’s not necessarily because of the crypto that this meltdown happens, but because of the misgovernance of the platform,” said Nadia Manzari, former CSSF regulator and partner at Schiltz & Schiltz. For her, adopting crypto assets into Luxembourg remains the right decision, but it’s important for regulators to “find a way to get a regulatory framework to safeguard financial stability and to protect consumers and institutions.” The FTX disaster of 2022 provides an opportunity for reflection among the industry, said Jack Ehlers, COO of Bitstamp. Nestor Verrier, general manager of Swissquote Bank Europe underlined that the FTX event demonstrated the industry’s failure in matters of due diligence and risk management. For Manzari, the upcoming Mica will address many missing aspects and bring answers with regards to the future of crypto.