Luxembourg Funds Intelligence Briefing (22/03/2021)

Fund groups under pressure to meet December PRIIPs deadline, and other business-critical fund industry news.

Luxembourg Funds Intelligence Briefing

22nd March 2021

As many as one in eight fund groups say they will not be ready for the December 31st deadline to meet PRIIPs requirements, and almost 40% more have not even begun the work necessary, according to a new report. A quarter of fund managers surveyed are concerned that the technical standards were approved late. Meanwhile, another survey finds industry professionals are becoming increasingly concerned that rising consumer prices and interest rates pose the biggest impending challenge to financial markets – more so than the direct consequences of the Covid-19 pandemic.

— Simon Gray, Editor in Chief

Sustainable Finance

Financière de l’Échiquier launches climate impact fund in Luxembourg

Financière de l’Échiquier has launched an impact fund in Luxembourg to invest in European stocks dedicated to good climate governance and sustainability. The Echiquier Climate Impact Europe fund uses a triple filter to assess companies for climate governance, climate commitment and fair transition. Fund manager Paul Merle says the approach is innovative in that it supports industry pioneers as well as those providing climate change solutions.

Best source: Delano

Asset Management

Investment professionals fear inflation more than Covid-19

Professional fund managers and asset managers see the risk of sharply rising consumer prices and interest rates as the greatest threat to financial markets, according to a survey by Bank of America. Fear of the consequences of the Covid-19 pandemic, by contrast, is almost fading into the background. The survey covered 220 fund managers, who manage a total of around $630bn globally. For 37%, inflation is currently the greatest market threat, while 35% see a violent price reaction on bond markets as the number one issue of concern.

Best source: Frankfurter Allgemeine Zeitung (subscription required, in German)

Morgan Stanley to start offering bitcoin exposure to wealth clients

Morgan Stanley will start offering its wealth management customers access to bitcoin funds, becoming the first major US bank to grant exposure to the crypto-currency. The bank is reportedly planning to launch three funds that enable ownership of bitcoin, in response to customer demand. It will grant access to existing clients with an aggressive risk tolerance who have at least $2m held with the group, or to investment firms with $5m or more, limiting bitcoin investments to up to 2.5% of the clients’ net worth.

Best source: CNBC

See also: Finews

Regulation

Many fund groups expect to miss December PRIIPs deadline: survey

One in eight fund groups believe they won’t be able to make the December 31 deadline for meeting PRIIPs requirements on key information documents even though all EU regulators are now on board with the technical standard, according to research by FE Fundinfo, a data company. A further 38% say they hope to meet the deadline, but admit they haven’t started work on production of the documents. A quarter of funds surveyed say the late approval of technical standards has raised concerns.

Best source: International Investment

EFAMA backs EU plan for single access point for corporate disclosures

The European Fund and Asset Management Association has backed the European Commission’s consultation on the establishment of a European Single Access Point for financial and non-financial information disclosures by companies. It recommends that the platform operate on a ‘file only once’ principle and be built incrementally according to the priorities of ESG and financial reporting required.

Best source: Institutional Asset Manager

Facts and Figures

Luxembourg issues €2.5bn of 10-year bonds with -0.045% yield

Luxembourg has sold 10-year bonds totalling €2.5bn, which is almost enough to cover this year’s projected €2.7bn budget deficit. The bond issue, which was offered at a yield of -0.045%, was fully subscribed after only a few hours. The move raises the country’s public debt to around €18.5bn, or 28% of GDP. Finance minister Pierre Gramegna says that he wishes to avoid another bond issue in 2021. Listed on the Luxembourg Stock Exchange, the bonds will be managed by Banque et Caisse d’Épargne de l’État, Barclays, Deutsche Bank, Banque Internationale à Luxembourg and BGL BNP Paribas.

Best source: Wort (in French)

See also: Luxembourg Times (subscription required)

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