South African Asset Managers enticed by Luxembourg, as uncertainty over Brexit continues

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As uncertainty over Brexit continues, Luxembourg is positioning itself as a gateway for South African asset managers to tap into European capital.

Luxembourg hopes to cash in on South African investors’ increased appetite for international exposure. The Association of the Luxembourg Fund Industry (Alfi) hosted a two-day roadshow in South Africa.

Anouk Agnes, the Association’s deputy director-general said appetite for investing in Africa among European investors presented an opportunity for South African asset managers to raise the much-needed capital for infrastructure.

According to Agnes, Luxembourg, being a specialist in investment funds, would enable South African managers to reach investors in 70 countries where Luxembourg domiciled funds are sold.

Speaking on the potential benefits of the partnership, she said “through these funds, South African managers can reach European investors and other investors abroad, including Asia and Latin America. They can pull investments from investors around the world to, for instance, invest in South African infrastructure. Investors are interested in the African market but they don’t really know how to do it. South African asset managers can sell their expertise of the market, they know the market”.

Alfi is also positioning Luxembourg as a destination for South African institutional and pension investors looking for offshore exposure.

The country is hoping to become a hub for investment funds post-Brexit. CEO of Luxembourg for Finance, Nicolas Mackel said more than 50 financial services companies, mostly asset managers, had announced that they were looking to relocate their EU operations to Luxembourg after Brexit.

He said “London was by far the leading hub of financial services in Europe and that will continue to be a case for a while. But there are activities that are expected to relocate to other financial hubs in the continent”.

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