In advance of the event, Delano spoke with Arnaud Bon, a director with Deloitte Luxembourg. He moderates the “Drivers of change for private equity funds’ operating models” panel, Tuesday at 1:35pm.
Aaron Grunwald: What do you want the audience to get most from the “Drivers of change” panel?
Arnaud Bon: Luxembourg has been hosting large PE players for a number of decades. However, we have seen the market evolve significantly over the past few years with large PE funds being launched out of Luxembourg and PE houses of all sizes establishing or reinforcing their presence in Luxembourg. Global tax transparency measures, increased regulatory pressure, appetite for the European marketing passport, as well as the search for efficient operational platforms, are driving major changes in operating models across PE houses--with their Luxembourg platform gaining increasing importance on the map. Luxembourg market players are adapting accordingly with strong impacts on the nature of the activities performed out of Luxembourg as well as on the asset servicing industry and talent market.
From your perspective, how has regulation changed PE fund operating models over the past year?
Despite a lot of initial skepticism, the regulations for alternative investment fund managers have overall been easily accepted by market players. Most of the large PE houses have established or are planning to establish Luxembourg-based regulated alternative investment fund managers. This drives important changes in the way PE managers are organised globally. While Luxembourg has so far had a strong focus on back-office activities, we see Luxembourg gaining more and more traction when it comes to middle-office functions.
Is there a structure missing from the Luxembourg fund landscape that you would like to see put into place?
The Luxembourg industry has done a fantastic job in creating and promoting the Luxembourg-branded limited partnership. When exchanging with PE fund managers, we have noted that this is considered a game changer for Luxembourg and it has probably been a turning point in attracting fund structures to Luxembourg. More than creating new types of vehicles, we should collectively focus on the continuous improvement of the existing toolbox.
Aside from your own talk at the ALFI event, which speech or panel are you most looking forward to hearing, and why?
I am definitely very eager to hear the discussion about “The future of PE”. It is always challenging to identify disrupting trends--hence the importance of keeping an eye on signals that can emerge from this type of discussions.