Pascal Rapallino, Group Private Client Solution Leader and member of the Group Executive Committee, analyses the recent developments in Private Equity/Real Estate (PE/RE) in Luxembourg for UNHW clients. Interview.

 

How has Private Equity evolved in Luxembourg over the last 10 years for these clients?

Private equity has made a home for itself in Luxembourg. Private clients’ expectations have really changed between 2010 and 2017. In some cases, today’s market can scare off private investors and many of them want to invest directly and efficiently, both in terms of costs/return on investment, control of and proximity to their investments. In other words, they no longer want to feel like the umpteenth link in the value chain. They converge on Luxembourg because the country is one of the best places in Europe when it comes to legal and tax efficiency. This trend is changing the typology of private clients: newcomers often have a minimum of several tens of millions of euros and demand the same services as those offered to institutional clients because they have a financial power which is often equivalent.

 

 “Private clients want to protect their assets and to invest in more sophisticated solutions.”

 

What are the objectives to be achieved in Luxembourg?

We often meet families from Asia, the Middle East and America who want to structure their European investments from Luxembourg because they already have equivalent structures in their home countries, and are aware of the Grand Duchy’s expertise. That said, Luxembourg still needs to develop its brand image, particularly in Eastern Europe. In my opinion, these improvements must focus on two areas: the pooling of efforts made by professional associations to strengthen the “national branding" and the professionalisation of the communication of the country’s potential ambassadors by establishing clear and strong messages. Luxembourg has already made a lot of progress thanks to organisations like LFF, but as a board member of STEP - the Society of Trust and Estate Practitioners - I hear our members saying that they need to see these efforts stepped up further.

 

How has SGG Group adapted to this new situation?

We’ve changed with our industry, from a 'products' approach to a 'services' approach. Today, a private client benefits from the same solutions as an institutional client. We’ve also expanded the scope of our services by providing new support services in PE/RE, wealth management and corporate finance services, for example. Private clients want to protect their assets and to invest in more sophisticated solutions: SGG Group provides them with the ideal teams, support and structures to do so. In addition to classic vehicles, we have a registered in-house AIFM which makes it possible to begin quickly in 'plug and play' mode, along with a securitisation company.