Regulatory Changes Boost Luxembourg's Appeal To Hedge Funds
Speaking at a recent conference organised in conjunction with the Alternative
Investment Management Association (AIMA), the chairman of the Association of
the Luxembourg Fund Industry's new products committee, Henry Kelly, suggested
that the growth in Luxembourg's hedge fund industry has occurred as a result
of regulatory changes. The amendments to the laws governing hedge funds in Luxembourg, introduced
in response to investor demand, include the streamlining of approval procedures
for the domicile and administration of hedge funds, and allowing hedge funds
to list on the Luxembourg Stock Exchange, which puts the jurisdiction in direct
competition with Ireland in this area. According to Reuters, which reported on the conference, Mr Kelly announced
that: "The authorities have sent a clear message that Luxembourg is a place
to administer and domicile hedge funds. Hedge funds know they are welcome. Success
is breeding success." There are currently 42 hedge fund administrators active in Luxembourg, managing
around EUR56 billion at the end of June, an increase of EUR16 billion on the
December 2003 figures. However, Mr Kelly reportedly also suggested that relatively higher tax levels
in the jurisdiction may eventually slow growth in the hedge fund sector. A comprehensive report describing the investment fund sector in most key offshore jurisdictions, with details of the regulatory structure, is available in the Tax-News Reports Shop at http://www.tax-news.com/reportshop/
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