ALFI’s Global Distribution Conference, staged at the European Convention Center Luxembourg on 24-25 September 2019, addressed key issues facing the fund industry both in the grand duchy and internationally. Speakers from the sector, Luxembourg’s government and financial regulator, the European Commission and fund industry groups in the United States and Hong Kong discussed challenges including demand for sustainable investment, especially to support efforts to curb climate change. They also examined new growth opportunities for the industry such as pan-European pensions legislation and debated the relative merits and complementarity of active and passive investment strategies.
The Global Distribution Conference, one of an extensive series of events organised by ALFI annually in Luxembourg and other parts of the word, has been bringing together representatives of all sectors of the fund industry, from portfolio management to fund administration, specialist software to distribution services, for almost three decades. Over the years the conference has become an international stage for industry leaders and policy-makers to discuss regulatory changes, investment trends and market developments, as well as a forum for interaction between participants.
Today global concern about the impact of climate change has put sustainability issues to the forefront for investment managers, who face growing pressure from investors to offer products that meet environmental, social and governance criteria as well as channelling funding into projects designed to lower carbon emissions, build circular business models or develop alternatives to disposable plastics. Regulation is not far behind, with EU legislation in the pipeline to require transparency from investment products and develop measurable definitions of green finance and other industry buzzwords.
The 2019 conference also examined legal and regulatory issues that the industry is having to confront, such as the requirement to comply with global measures to clamp down on money laundering and financial crime. However, asset managers are benefiting from the emergence of fintech firms, based in Luxembourg and worldwide, that are developing new technology to conduct functions including subscription, portfolio management, administration and reporting much more quickly, accurately and cost-effectively, with help from innovations such as blockchain technology.
Luxembourg remains far ahead of its European peers as the world’s second largest fund domicile after the US, with more than €4.5trn in assets under management at the end of August 2019. The message from ALFI’s Global Distribution Conference this year is that the grand duchy is embracing a future in which the global fund industry will be called on to play an even more central role in the financial well-being of society and the environmental health of the planet.
Written by Simon Gray, Vital Briefing