Regulatory Changes Boost Luxembourg's Appeal To Hedge Funds

by Ulrika Lomas, for LawAndTax-News.com, Brussels

20 September 2004

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.

Recommended