Core substance functions account for one-third of employees, a figure KPMG believes will grow under the insistence of regulators Shutterstock

Core substance functions account for one-third of employees, a figure KPMG believes will grow under the insistence of regulators Shutterstock

Yet despite this, the sector tends to lack IT tools for day-to-day management, with the complexity of alternative investment funds (AIFs) being a particular constraint due to their nature and the variety of their strategies. 

Governance processes and delegate oversight functions have tended to be streamlined through IT, with half using dedicated IT solutions to oversee their distributors. However, going further appears to be seen as a highly complex challenge, as only one-third of those surveyed suggested adopting a digital solution was a top-three strategic priority. Although AIFs account for 15% of sub-funds, the survey found they represented 35% of perceived business complexity. 

Delegation remains the centerpiece of the Luxembourgish ManCo business model, even if 56% of ManCos perform internally (either fully or partially) at least one operational function such as portfolio management, fund administration, transfer agency and distribution. Core substance functions account for one-third of employees, a figure KPMG believes will grow under the insistence of regulators. ESG is widely seen as the key strategic priority over the coming years.