Luxembourg emerging as post-Brexit domicile of choice

Private equity firms are increasingly eyeing Luxembourg as an alternative jurisdiction to the UK following Brexit, according to fund administrator Northern Trust.

“We’ve seen phenomenal growth [in Luxembourg], and it has strengthened its position as a base for European and Asian managers. Luxembourg funds have a strong international brand also,” said Toby Glaysher, head of global fund services at the firm.

Northern Trust has just expanded its footprint in the country through the acquisition of UBS’s fund services arm, a deal which will also see it establish a presence in Switzerland.

“We have provided services [in Switzerland] for decades, but this will be our first established presence there. The market for Swiss funds is dominated by domestic pension funds, which is a great opportunity for us. However, we don’t see it as a cross-border funds market,” said Glaysher.

The deal was driven by an anticipated uptick in outsourcing fund administration in Europe, Glaysher said.

“US and UK managers have traditionally outsourced fund administration more than their European peers,” Toby Glaysher, head of Global Fund Services, International at Northern Trust, told pfm. “The acquisition strategy is predicated on the belief that European managers will increase outsourcing significantly, posing an opportunity for our expansion in Europe.”