Corporate financing in Europe is currently undergoing a
significant transformation. Historically, it has been largely
dominated by banks, but with banks being in the process of
deleveraging and currently burdened by additional capital
requirements, debt funds have stepped in and increasingly provided
funding to small- to medium-sized enterprises, either through
direct lending or through loan acquisition/participation. Debt
funds have grown significantly in number and size in recent years
and are constantly winning market shares vis-à-vis banks. In
Luxembourg, for instance, the number of assets managed by debt
funds has increased by a factor of six over the past five
In order to keep pace with this market development from a
regulatory perspective, the European Securities and Markets
Authority (ESMA) published its opinion on 'Key principles for a
European framework on loan origination by funds' at the
European Commission's request. In doing so, the ESMA took stock
of the national practices towards loan origination by investment
funds and proposed the cornerstones around which a harmonised
European framework on loan origination could centre.
In response to this, the Commission de Surveillance du Secteur
Financier (CSSF) published an update of its AIFM Law FAQ in June
2016, where it officially confirmed that Luxembourg-based AIFs may
engage in loan origination, loan acquisition or loan participation
activities, subject to specific organisational and operational
Even though market participants could always obtain swift
feedback from the CSSF through its approval and supervisory
process, the update of the AIFM Law FAQ provided most welcome
clarification to the market players in Luxembourg, reflecting the
growing importance of debt fund activities here. After all,
Luxembourg is the largest fund distribution centre in Europe and
second largest in the world.
Our service offering
In order to support market participants in the various
challenges related to loan origination, loan acquisition and loan
participation activities by funds, we have designed a training
curriculum covering all relevant aspects of these activities from
audit, risk management, tax, and valuation perspectives.
These topics are set up as separate, stand-alone
'modules', and it is possible to select all of the modules
or only single ones for a training session. For each of the
modules, a dedicated team of experienced professionals will provide
you with an in-depth view on the relevant regulatory provisions,
methodologies, and market best practice.
Besides the aspects mentioned above we are delighted to talk to
you on any further aspects around debt funds. Please contact me for
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The SuperReturn International series consists of 15 annual international private equity & venture capital events held in Europe, Asia, Africa, Middle East and the US. This happens to be the European event for the year. Spread across five days, starting from 27 February, the largest private equity event worldwide will take place in Berlin this year.
Some of the main subjects being discussed at this year’s conference are; The Geopolitical and Economical happenings of the last 12 months, Innovation Disruption & Tech Expertise and many more. As previously eluded to, there will be over 400 presenters, all bringing their own perspective and stance on specific topics to the table. Companies such as Google, Visa, Bloomberg and many more will all be represented throughout the five days.
KPMG Associate Partner, Nic Müller, will be speaking on 28 February at 3pm: “Why invest in the mid-market today”.
Given the societal challenges and environmental issues we currently face, the circular economy concept has rapidly been gaining in importance. This is why the Luxembourg government is pressing ahead in setting up the framework for the third industrial revolution, in which a circular economy is a key pillar.
The International Accounting Standards Board’s (IASB) insurance contracts standard, IFRS 17, is expected to significantly affect data requirements and the systems and processes used for data collection, actuarial projections, and on calculating and accruing interest.
In discussion with insurers around the world, we found that most expect to face challenges accessing and handling data of the right quality and granularity under the new standard. And many see significant effort associated with capturing, storing and analyzing this information given historical data quality and the use of legacy systems.
In the third of our webcast series - Impacts of IFRS 17 on data, systems and processes - we will share practical examples of how the forthcoming standard may impact an insurer’s current systems architecture. In addition, we will explore the data that will be required and how the standard will influence new estimates, computations and processing. We will also share lessons that we have learned from helping insurers through Solvency ll and the importance of developing a data management policy early on.
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Over 150 attendees from both New York and the Cayman Islands recently gathered at the 4th annual Cayman Finance New York Breakfast Briefing held at the Harvard Club of New York City at which Cayman Finance CEO Mr Jude Scott described Cayman as "the premier global financial hub".
A professional director for a hedge fund might take an instinctive view that board observer rights are not desirable given the traditional view of separation of capital ownership and those responsible for fund governance.
Innovation could further increase the significance of Islamic finance as a source of finance for the aviation industry.
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