LUXEMBOURG AND THE UHNW INDIVIDUAL
STEP Benelux – 26th February 2014
Who are we?
» Private bank serving UHNW individuals and families across the world.
» Established in 2009
» 100% owned by entrepreneurial family originating from UK
» Offices in Luxembourg, London and Monaco
» A family office with a banking licence
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Why did we set up a bank?
» Response to the global financial crisis – “a safe bank”
» Gap in the market for premium service
» Support family office activity
» Build legacy for the family
» Respond to the changing needs of UHNW people in the current environment
Professional and personalised assistance beyond traditional asset management
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UHNW families have complex needs in a changing environment
«The new normal»
» Volatile asset markets
» Low economic growth rates
» Recession in Europe
» Emerging markets (China, Brazil)
» Growing tax, legal and compliance pressures
» More access to information ; more sophisticated.
» Globalisation – international families
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RBC World Wealth Report 2013
Who are the UHNWs of today?
Most significant industries of self-made UHNWs
Top 5 industries
%
Finance, Banking &
Investment
22.0
Industrial Conglomerates
5.2
Real Estate
5.0
Non-profit & social
organisations
4.8
Manufacturing
4.7
UHNWs are increasingly entrepreneurs and business owners – more sophisticated, demanding
and more complex needs.
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Source: Wealth-X World Ultra Wealth Report 2013
UHNW needs and expectations from wealth advisers
» Single point to assist in managing different critical activities (e.g. wealth
preservation, tax)
» Holistic approach – from structuring to implementation
» High level of service and responsiveness
» Co-ordination role – to deal with different service providers
» Control and risk management
» Due diligence support
» Efficiency – cost management, user friendly, secure
» Discretion, loyalty from staff – trust and confidence – managing a family.
» Innovation – philanthropy, art investments, use of technology
» Ability to deal with anything…?
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Factors for UHNWs to consider when selecting a jurisdiction
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Why Luxembourg?
» International environment – multi-lingual and multicultural
» Location – heart of Europe
»
Small country – pragmatic and reactive government,
regulator etc
» Financial centre of excellence and expertise –
access to top service providers
» Wealth management tool box – attractive tax regimes
» Safe haven for assets – political and economic
stability
» Innovative – Freeport, Foundation, IT
A platform for growing our private banking
business…
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Specific Opportunities: SICAV-SIF
» A flexible vehicle which allows both traditional financial assets, private equity and real
estate as well as collectible assets (art, jewellery, cars, horses, watches)
» Can be used as a tool for:
o
Active investment management
o
Estate Planning
o
Asset Protection
» The SIF is targeted at the following:
o
UHNW individuals and families
o
Family Offices
o
International wealth planners, among others who are looking for an alternative estate
planning solution for their client base.
» Fund managers and other institutional investors.
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Specific opportunities: New Markets Brazil & China
Recent changes to BRAZIL tax law means that
Luxembourg is now a more attractive jurisdiction
for the structuring of funds. Brazilian clients have a
comfort level with fund structures and in the past
have used more traditional offshore jurisdictions
such as Bermuda and Cayman for fund structures.
These jurisdictions are now in scope of the changes
to the law so Brazilian clients are looking to
Luxembourg for this type of structure.
With the acquisition of Banque Pasche this is an
excellent tool that we can offer for their Latin
American client base
CHINESE are entrepreneurs and have compact
family structures and treat their personal assets like
business with view of multiplying their wealth
(more than seeking yield). In addition, they are big
collectors of fine art, wine, jewellery and watches,
which are typical of the alternative asset classes
that can be structured through a SIF
In 2008, a Memorandum of Understanding was
signed between Luxembourg’s Commission de
Surveillance du Secteur Financier (CSSF) and the
China Banking Regulatory Commission (CBRC).
The MoU allows QDIIs to invest on behalf of their
clients in financial products regulated by the
Luxembourg Supervisory Authority. With this
memorandum, Luxembourg is positioned as a
gateway to China, clearing the way for Luxembourg
fund management companies amongst others to
reach investors from the booming Chinese fund
industry.
Given its traditional strengths as a fund domicile,
the Grand Duchy is a natural gateway for
investment flows into and out of China and they
are familiar with fund structures.
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