David Wicks, Steve David (Northern Trust): Building presence in Luxembourg
With a new European-banking base and expanding fund administration business in Luxembourg, Northern Trust is ready to capitalise on growth opportunities across Europe. Head of Continental Europe and Chief Executive Officer for its new EU bank, David Wicks shares insights with Chief Operating Officer, Steve David – who also leads the Luxembourg Global Fund Services business.
How is your focus broadening in Luxembourg?
DW: The re-domiciliation of our EU bank from the UK to Luxembourg completed on 1 March 2019, strengthening Northern Trust’s regional presence in Continental Europe. Regardless of the ongoing Brexit discussions, we see this development as key to the growth of our business in Continental Europe.
SD: Our new European-banking base in Luxembourg builds on our rapidly expanding presence in Luxembourg. We are now a top 10 administrator by assets under administration1, supporting over 600 funds for some of the world’s largest and most sophisticated investment managers. We have come a long way since opening our office in 2004 as part of a client-led initiative to establish Europe’s first tax-transparent pooling vehicle.
“Technological advances have the potential to transform asset servicing over the next decade”
Why is Luxembourg central to your Continental European Growth Strategy?
DW: As one of the world’s leading financial centres, it’s very much a gateway to the European and global funds marketplace. It’s the largest fund distribution centre outside of the US, with Luxembourg funds marketed in more than 70 countries worldwide. These factors, together with the diversity of talent, financial sector expertise, regulatory framework and stable political environment make it a natural hub for our expanding asset servicing business in Continental Europe.
SD: Luxembourg continues to grow its reputation as a centre for the establishment and servicing of alternative funds alongside its highly established traditional fund reach. The Association of the Luxembourg Fund Industry (ALFI) reported a 17% annual increase in Assets under Management for private equity funds in 2018 while noting Luxembourg remains a favoured European location for multi-geographical and multi-sectoral regulated Real Estate Investment Funds (REIFs)2.
What opportunities and challenges do you identify for the Grand-Duchy?
DW: Technological advances have the potential to transform asset servicing over the next decade, particularly with regards to emerging technology like blockchain, cryptocurrencies and artificial intelligence. With its pragmatic and collaborative approach, Luxembourg is well placed to succeed in fintech. In turn, Northern Trust is committed to significant investment in fintech solutions, enabling us to provide scalable and flexible technology infrastructure to support our clients’ growing demands.
SD: The ability to embrace technological innovation that will drive improvements across a range of asset servicing functions is key both at a jurisdiction and company level.
We remain focused on helping our clients access emerging technology by drawing on our regional expertise and global capabilities.
1. As ranked in the 2018 Monterey Insight Luxembourg Fund Report
2. ALFI Press Release, 30 January 2019