ALFI Newletter July 2002


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ALFI Newletter July 2002

  1. 1. N ewsletter July 2 2001 alfi A S S O C I AT I O N L U X E M B O U R G E O I S E DES FONDS D’INVESTISSEMENT L U X E M B O U R G I N V E S T M E N T F U N D S A S S O C I AT I O N
  2. 2. N ewsletter July 2 2001 Consolidation and Evolution Inside this issue At its General Membership Meeting held on Thursday, 21 June 2001, the Luxembourg Investment Funds Association has elected a new Board of Directors. The new Board has 2 Consolidation and Evolution elected Mr Guy Legrand as president. He succeeds to Rafik Fischer whose mandate has come to an end after a three years period. This article gives a résumé of the new 3 Editorial: Presence and president's program for the two years to come. The renewal of the ALFI board of directors and the appointment of a new president occur Permanence after three years of deep evolution of both the investment fund sector in Luxembourg and the Luxembourg Investment Funds Association. 4 Automated Compliance First of all, the fund industry has grown rapidly: Checking Systems in The total volume of Luxembourg funds reached EUR 874 billion at the end of the year 2000 after having peaked at EUR 924 billion in October 2000, which makes the Luxembourg Luxembourg investment fund market the number One European market and the second market worldwide. The fund industry is one of the central pillars of the Luxembourg financial center; this sector currently employs nearly 7000 people, and in terms of direct employment, it 4 ALFI’s New Board represents approximately 3% of Luxembourg wage employment. 5 Development of the In spite of the deceleration recorded during the first half of the year 2001, the prospects for the future remain extremely favorable. Investment Fund Industry in The same applies to ALFI: the Central & Eastern Europe ALFI's staff strengthened During the period 1998-2000, under the presidency of Rafik Fisher and its board of 5 ALFI's New Executive directors, the Luxembourg Investment Funds Association has changed a lot. Committee It was structured and reinforced, on the level of its fund specific competences and of its legal and tax competences, as well as on the level of the services rendered to its members. 6 FEFSI Survey: Taxation of It has become an essential partner of the financial life in Luxembourg that can't be ignored. UCITS - The Principles ALFI gave an immense visibility to the whole of our activities; it took part in a proactive and determining way in all major issues and important decisions relating to our sector during the last three years. 6 Fund Supermarkets Reshape Given the level of the stakes and the industry's growth prospects, setting up a 2001-2003 European Distribution program is thus an important task: on the one hand this task is facilitated by the fact that the way was clearly marked out 7 New Funds and that ALFI is well armed today to take up the challenges it has to face. On the other hand it is difficult because an association representing a rapidly growing and changing industry can only be proactive and evolutionary itself. 8 Investor’s confidence remains The program proposal for the 2001-2003 presidency will thus have two governing ideas: unshaken despite market consolidation and evolution. turbulence Numerous working areas We are actually working on numerous issues: © ALFI Newsletter is published by ALFI. First of all on technical files: While we strive to make the content of With regard to the subscription tax, the ultimate goal of any step in this field remains the this newsletter reliable and accurate,the abolition of this tax paid by the investment funds. information provided therein is given The efforts made by ALFI to obtain a progressive reduction of the above mentioned tax without the responsibility of the publisher. will thus be continued. This reduction would be compensated on the level of the government budget by the additional receipts generated by the growth recorded by the industry in the past and by its expected evolution over the years to come. It will make it Editor-in-charge: possible to reduce and to remove in the long term the disadvantage the financial centre has Jean-Jacques PICARD still to deal with compared to its direct competitors. Tel: 22 30 26 Fax: 22 30 93 In the same field, the efforts made to see the tax authorities reformulate their position on 5, rue Aldringen L-1118 LUXEMBOURG the taxation of percentages paid to non resident members of investment fund Boards must e-mail: be continued. Moreover, the great subjects such as the taxation of savings and the follow-up of the Agency: European Directives will remain ALFI's major concerns. Here, ALFI should join any Kneip Communication global initiative of the Grand Duchy to deal with these topics in Brussels.
  3. 3. Investor information A second working area relates to supplying investor information. Editorial Nowadays, no financial center and no investment activity focused either on institutional or private investors can be conceived without a powerful system to transmit prices and infor- mation relating to the various products. Presence and Permanence In this field, the evolution of the statute of CCLux is close to our hearts, and the installation of an electronic on-line data base containing the prospectuses and management While ALFI's board of directors and president have reports of the Luxembourg domiciled funds will be a priority. changed, the Association's ambitions remain unchanged. We want to Lastly, the efforts made in order to improve Luxembourg's attractivity for hedge funds and to work out a new legislation for venture capital funds will be continued. be responsive to our members, understand their motivation, follow up on their evolution, anticipate their needs, reconcile possibly conflicting interests, Presence on the labour market: promotion, information, identify common stakes beyond the driving training forces of competition and the market, As I mentioned in my introduction, the fund industry accounts for approximately 7000 communicate with the Luxembourg authorities, jobs in Luxembourg and the fast development of some of its activities should make this private and political organisations, liase with the figure grow in an extremely significant way during the next few years. supervisory body, but also with professional One of the major risks of our industry at the present time is to be victim of its own success associations and agencies that cover other profes- by lacking for qualified staff. sions of the financial sector, contribute actively in view of the promotion of our financial centre, The absence of trained staff in a sufficient number on any level can have a fundamental impact on service quality and costs. Moreover, whereas we entered into a period of fund be vigilant in respect of international developments, engineering, the need to attract "talents" which otherwise could turn towards other jobs extend bilateral relationships to sister associations, within the banking sector or to other financial centers is more obvious than ever. above all those that cover jurisdictions where the It will be one of ALFI's priorities to further intensify the global promotion of our industry, major sponsors of Luxembourg based funds both among those who will enter the labour market and those willing to reorientate their originate, contribute to the building of the single career towards our industry. European market while ensuring that Luxembourg's vital interests are being taken into account, support the action of FEFSI, Corporate governance and ethics anticipate and prepare the future by putting in Now that private and institutional investors expect promoters and managers to offer place training programs for the young transparency, a steadily growing quality of the information dispatched, precise details on operational procedures and an exemplary deontology, the Luxembourg fund industry must professionals of our industry, by educating the take care of these elements. investors, by implementing the code of ethics and guidelines for auto-regulation, by working out In order to do so, ALFI's recently set up technical committees "corporate governance" and "ethics" have an important role to play and will be monitored very closely. meaningful statistical data and feasibility studies. Our essentially international, composite and heteroge- neous Luxembourg fund industry with its global ALFI's organization structures and local distribution networks serves both In order to increase its means of action, ALFI has recruited a General Manager a few the collective savings and private undertakings and months ago, which will considerably modify the role of its President. enterprises. It creates new jobs and generates tax This new presidency will be the occasion to organize the operation of the General Manager revenues. It is about to become omnipresent while / President binomial in order to achieve a good sharing out of the tasks and an excellent reassembling the components of the very tissue of the global synergy. financial world and by intervening directly in the On the other hand, the role of the various technical committees and the contribution they financing of the economy. The industry is fully aware made over the years are obvious; it is advisable to encourage them, to motivate them, to that the actors bear high responsibility. Its importance recognize the merit of the participants and to keep the committees in good working order so within the Luxembourg economy is well established. that they continue to play their role and to provide their technical contribution in the future. Its international role is recognised. Lastly, the modification of the statutes of our association in April 2000 opened Alfi to all the professionals working in and for the investment fund industry, be they established in Based on the guidelines given by our board of directors, Luxembourg or abroad. The consequence of this modification was that ALFI could the Secretariat General together with the numerous vol- welcome numerous new members over the last months. unteers within our technical committees will endeavour One of the objectives of the new presidency will obviously be to integrate them, to ensure to accomplish with determination the objectives of the the representativeness at the level of the technical committees and to take into account association: the defence of the members' interests their interests and desideratas. and the efficiency of the investors' protection. Guy LEGRAND Robert Hoffmann President General Manager 3
  4. 4. N ewsletter July 2 2001 Automated Compliance Checking ALFI's New Board Systems in Luxembourg Guy Legrand, DEXIA-BIL, president The fund management business has never before been under the spotlight as it is currently. Regulators are taking a higher degree of interest in activities than ever before and clients Pierre Ahlborn, are placing increasingly onerous restrictions on what fund managers and administrators Banque de Luxembourg can or cannot do on their behalf. Add to this a squeeze on margins and you have Jacques Bofferding, irresistible pressure towards automation and the need for that buzz-phrase of the late Banque Générale du Luxembourg 1990's - Straight Through Processing - STP. Freddy Brausch, This is nowhere more true than in the area of compliance. Compliance has long been the De Bandt, Van Hecke, Lagae, Loesch Cinderella of the fund management ball, if not the downright ugly sister. Long considered Christoph Cramer, a mere cost centre, removed from the focus of STP, and upstream from the decision Union Investment support and order generation process, compliance systems have suffered from lack of Jacques Elvinger, systems resources. And yet, change is sweeping through the market and increasing Elvinger Hoss & Prussen interest is being shown in automated compliance systems. Rafik Fischer, Organisations are waking up to the potential cost of inefficient or absent compliance Kredietbank Luxembourg capability, not just in terms of the manpower that is occupied by this function, but also the Yves Francis, real cost of errors or deliberate investment breaches. JP Morgan Fleming In Luxembourg, where the predominant market need is for administrative post-trade Jean-Michel Gelhay, checking, there is a particular set of requirements. So what are the things that you need to Banque Degroof Luxembourg look for when assessing the capability of systems and suppliers in the field of automated Richard Goddard, investment restriction checking? ABN AMRO Investment Funds S.A. Support of the regulations and understanding of the local market Manuel Hauser, Fully documented CSSF rule coverage is a must. The supplier needs to have the UBS Fund Services (Luxembourg) S.A. necessary expertise to discuss your interpretations of the rules. In addition, the Claude Kremer, regulations for funds domiciled in other jurisdictions but administered in Luxembourg Arendt & Medernach should also be covered by the prospective product. John Li, Support for all types of investments KPMG Most systems test equities adequately. What about your balanced funds with a mix of William Lockwood, fixed income, equities, money market instruments and derivatives? Can you test the Franklin Templeton International Services S.A. true potential underlying instrument and issuer exposures? Iain MacLeod, Support for all types of funds Credit Suisse Asset Management Flat funds are one thing, but what about funds-of-funds structures? Can the system perform Julian Presber, a 'look-through' to give you the effective overall exposure of the fund product? State Street Bank Luxembourg S.A. Support for complex rules Marc Saluzzi, PricewaterhouseCoopers Does the system pre-structure the types of rule you can build or do you have flexibility Guy Schmit, easily to build any rules through the combination of simple concepts? Bayern LB International Fund Management S.A. Support for the management of breach resolution Thomas Seale, Once the system has detected a breach, how easy is it to track how the breach is being European Fund Administration (EFA) resolved - i.e. whose responsibility is it, how long will it take, etc? The compliance Paul Suttor, system should combine this information with details of the original breach to provide Crédit Européen a complete history of each incident. Eric van de Kerkhove, Ease of systems integration Deloitte & Touche Has the compliance product been designed with easy links to any administration or Patrick Weydert, accounting system? Deka International S.A. In addition to these qualifying questions to be asked of a prospective supplier, there are a Julien Zimmer, number of things to look at internally to assess how difficult it will be to implement DG Bank Luxembourg S.A. automated restriction checking: Patrick Zurstrassen, Are your client mandates in an electronic form already (e.g. simple database)? Crédit Agricole Indosuez Luxembourg S.A.
  5. 5. Are the mandates in a form, which can be represented by a set of checks - or are some 'subjective'. An example of the latter is 'No investment in illiquid stocks'. This requires a definition of liquidity, which might be the holding as a % of the average daily traded ALFI's New volume, but is this data available? Data availability and accuracy is the single biggest challenge to effective restriction Executive Committee checking. Some rules, which at first glance appear to be easy to check, without reliable data become unreliable or impossible. Issuer data is a particularly common source of problems - especially if you are looking for exposure that includes cash and Guy Legrand, money market instruments. DEXIA-BIL, president These points also lead to another reason to choose a supplier who has broad experience at Rafik Fischer, mandate review and rule creation. The supplier's business consultants should be able to KBL, vice-president in charge of national relations advise as to whether, in their experience, such information is available from suppliers and Patrick Zurstrassen, which is the best supplier for a particular type of data. Crédit Agricole Indosuez Luxembourg S.A., So, who to turn to, to help you choose which way to go? vice-president in charge of international relations The two approaches are to either employ third party consultants to manage the system and Pierre Ahlborn, supplier selection process, or to manage it directly yourselves. If you choose the latter, there are several suppliers positioned in the market with various products. These suppliers Banque de Luxembourg, Treasurer include LatentZero (a product developed in the UK and now marketed in Luxembourg), Manuel Hauser, MacGregor, LineData, Charles River, etc. UBS Fund Services (Luxembourg) S.A., Swiss Fund Promoters Henry Kelly Julien Zimmer, KellyConsult Sàrl DG Bank Luxembourg S.A., German Fund Promoters William Lockwood, Franklin Templeton International Services S.A., Anglo-Saxon Fund Promoters Claude Kremer, Development of the Investment Arendt & Medernach, chairman Legal Committee - National Affairs Fund Industry in the Freddy Brausch, De Bandt, Van Hecke, Lagae, Loesch, Central & Eastern Europe chairman Legal Committee - International Affairs Jacques Elvinger, Elvinger Hoss & Prussen, The year 2000 marked the 10th anniversary of political and economic changes evidenced chairman Fiscal Committee within central and eastern Europe since the parliamentary victory of the Solidarity Jacques Bofferding, movement in Poland, the success of the Velvet revolution in the Czech Republic, German Banque Générale du Luxembourg, unification and the symbolic collapse of Berlin wall in 1989. chairman Internet Committee Over the past decade central & eastern European countries started to differentiate themselves and re-group into three separate sub-regions, being Central Europe (Czech Lucien Euler, Republic, Hungary, Poland, Slovakia and Slovenia), Baltics (Estonia, Latvia, Lithuania), Fastnet and the Balkans (Albania, Bosnia-Herzegovina, Bulgaria, Croatia, Macedonia, Romania chairman Training Committee and Yugoslavia). Depending on political stability and economic recoverability there might also be future changes within Russia and the CIS. Henry Kelly, The countries of central Europe (CE) - Czech Republic, Hungary, Poland, Slovakia and KellyConsult Slovenia - can be characterized by their strong and clear political and economic aspirations to chairman Operational Techniques Committee join the EU. Three of them: Czech Republic, Hungary, Poland have already joined NATO. It is likely that some of them (if not all of them) will join the EU in the first wave of accession. Thomas Seale, European Fund Administration (EFA), This article describes the current status of the investment fund industry and perspectives for further development in three countries of central Europe: Czech Republic, Hungary chairman Marketing Committee and Poland. With the biggest capital markets in the central European region and good Dominique Valschaerts, financial infrastructure, the investment fund industry is most advanced in these CCLux countries. Furthermore, their accession to the EU will further stimulate growth of the investment fund industry. chairman Statistics Committee continued on page 6 5
  6. 6. N ewsletter July 2 2001 Development of the investment FEFSI Survey: fund industry... (continued) Taxation of UCITS - Economic fundamentals and infrastructure The Principles During the last 10 years or so, the Czech Republic, Hungary and Poland together managed to attract US$ 74 bn of foreign direct investment (FDI). Together with the processes of privatization and restructuring and employment of required know-how, this has enabled them The European Federation of Investment Funds and to transform their economies. Companies (FEFSI) has issued a new survey on the In terms of the financial services industry, the banking industry was the first to go through principles of taxation of UCITS in 20 FEFSI member the restructuring and privatization process. This process, combined with the introduction countries. This survey, that has been first launched in of the regulatory requirements of The Basel Capital Accord, has resulted in significant early 1992, is updated annually by members of improvement of its condition. Now, after a decade, the banking industry has reached a FEFSI's Tax Committee. It contains general remarks consolidation stage in some of these countries. Development of the insurance industry and its purpose is to provide a country-by-country followed (particularly on the life insurance side), in conjunction with the introduction of overview of taxation of UCITS. pension system reforms. At the same time the National Stock Exchanges were established In 2000/2001, (some minor) changes in the taxation or re-established, and securities markets legislation and related regulatory regimes were of UCITS were observed in Austria, Belgium, Czech introduced which enabled the development of domestic capital markets. Republic, France, Germany, Greece, Ireland, Italy, This has fuelled economic growth. In the year 2000 the Czech Republic eventually overcame Luxembourg, Norway, Portugal, Spain, Sweden, its recent recession with the 2.5% p.a. GDP growth. In Poland GDP growth continued at Switzerland, United Kingdom. Poland participated in approximately 5% p.a. over the whole decade, and in the case of Hungary, growth has been the survey for the first time since joining FEFSI. at 5% p.a. since 1996. On the other hand government spending and budget deficits remain No changes were noted in Denmark, Hungary, and the high, unemployment is rising (Poland -14.5%) and inflation remains a problem. Netherlands. Market size FEFSI is considering posting the survey on its web site ( Investment fund laws and regulatory regimes were introduced in each of the three countries and were subsequently adjusted to conform with EU legislation as a part of an overall requirement for national legislation to comply with the "acquis communautaire". Supervisory power over regulation and supervision of the industry was placed with the Czech Securities Commission, the Hungarian Banking and Capital Markets Supervision Board and the Polish Securities & Exchanges Commission. Fund Supermarkets As of 31st December 2000 market capitalization of the three largest stock exchanges in the region (Warsaw-WIG, Budapest-BUX and Prague - PX50) amounted to US$ 42.7 bn. Assets Reshape European under fund management domiciled in these countries amounted to US$ 3.5 bn (139 funds) indicating that 8.2% of market capitalization was under fund management at this date. By comparison this figure represents just 0.4% of total net assets under management Distribution in Luxembourg. So the natural question is: what is the central European potential for development of the investment fund industry? Eventually, population size and its associated savings will constitute the region's comparative Fund supermarkets in Europe - distribution platforms advantage. EU accession will lead to a fall in a risk premium and increase in market that blend a wide range of retail-oriented packaged valuations. In the transition period it is the development of contractual savings that shifts the investment products with turnkey administration and structure of demand for financial assets towards longer maturities. record-keeping capabilities - could represent as much as 25% of net new inflow into Europe's fund industry by 2005, according to the latest report in The Cerulli Domestic market players Report™ series, European Fund Supermarkets. Currently, domestic markets are very concentrated with only a few dominant players, and those being a mixture of national and international promoters. The report states that fund supermarkets will represent between 10% (in Spain) and 25% (in the United Although there are about 15 fund managers based in the Czech Republic, the market is Kingdom and Germany) of net new inflow into mutual dominated by two players which together have 80% of the market share: Komercni Banka funds by year-end 2005. As a result, CA's admittedly (18%) and Ceska Sporitelna Banka (acquired by Erste Bank - 62%). optimistic forecasts call for Europe's fund supermarkets Similarly in the Hungarian market, the three largest players have 90% of the market: OTP to hold nearly 275 billion in assets by 2005, Bank (49%), Budapest Bank (acquired by GE Capital - 31%), and CA IB Securities (10%). representing at least 4% of the region's mutual fund There are about 15 fund managers in the Polish market and the major promoters include industry and a blistering 75% compound annual growth Pioneer (49%), Skarbiec (owned by BRE Bank SA and ADIG- 21%), and DWS (15%). rate. (The current level in the U.S. is roughly 6% of It is worth noting that foreign controlled promoters dominate the markets (except for assets and 16% of net new sales in long-term funds.) Hungary) although none of them has yet managed to build a strong central European regional According to the report, fund supermarkets will presence. The development of the pension market and availability to distribute foreign represent the product choice and open architecture domiciled funds may affect the future share of current market players. European consumers are increasingly demanding.
  7. 7. Products In terms of domestic products (apart from existing balanced, bond, equity, money market, and privatization funds) one can observe the effects of a recent regulatory concession allowing New Fund / investment funds to move away from domestic securities and enabling the emergence of some more global or European outlook funds (Hungary, Poland). The first "tracker funds" Sub-Fund Launches (Hungary) and "guaranteed funds" (Poland) were introduced to the market and the concept of "fund of funds" was recognized in the Czech Republic. As far as the distribution of foreign domiciled funds is concerned the markets are currently BANQUE DEGROOF LUXEMBOURG quite closed in terms of the public distribution of foreign domiciled funds. Distribution of such Part I SICAV Bankpyme Strategic Funds SICAV, funds is either: not possible (Hungary); possible through a registration process which requires Big House, EUR, 60% equities, 40% bonds, one to meet national prospectus and reporting requirements (Poland); or possible through a third at least of the equity investment consisting in registration process which recognizes European passport (Czech Republic). equities of companies directly or indirectly involved in the real estate business; European Fund, EUR, securities issued by issuers of European (60%) and Foreign market players non European (40%) OECD countries. Central and eastern European capital markets also attracted foreign promoters who set up funds domiciled outside the region, which invested in central & eastern European securities BANQUE GÉNÉRALE DU LUXEMBOURG S.A. (including Russia). As at 30th June 2000 there were US$ 5.6 bn of assets managed by 114 Part I SICAV DAB Adviser I Fund: D & P Welt such funds, of these US$ 3.4 bn (61%) were invested by funds domiciled in Luxembourg. Portfolio, EUR, international equities of companies presenting a high growth potential; Fidentus Biotech, EUR, equities of biotechnology and phar- Further developments maceutical companies; Elite Global Equities, EUR, Future development of the investment fund industry will be stimulated by three main factors: equities of international companies having shown a European Union enlargement solid growth in the long run and equities of " New Economy " companies. Growth in market capitalization Part I SICAV Fortis L Fund, Fortis L Fund Bond Pension system reform Convertible Europe, EUR, equities worldwide. EU accession BNP PARIBAS FUND ADMINISTRATION As new members accede to the European Union they are expected to adopt all relevant EU Part I SICAV Parvest: Parvest US High Yield Bond, legislation. The current EU calendar assumes that accession will not start prior to USD, below investment grade bonds issued on the US markets or by US issuers; Parvest World 1st January 2003. The accession process will lead to the harmonization of national legal Technology, USD, securities issued by companies systems with the EU UCITS Directive, which will automatically enable a distribution of active in technology related sectors (telecommuni- the Part 1 UCITS in the central Europe. The Czech Republic and Poland have already cation, Internet, EDP services), Parvest European adopted laws providing for recognition of European passport for UCITS. In the case of Corporate, EUR, investment grade bonds of private Poland this law will become effective when Poland joins the EU. Similarly, Hungary issuers, issued on the European markets or by foresees changes to its legislation in the course of this year. The ongoing harmonization of European issuers. national legal and regulatory systems will lead to a decrease of market entry costs and eventual elimination following the EU accession. CITIBANK INTERNATIONAL PLC (Luxembourg branch) Market capitalization Part I SICAV Axa World Funds: European Small Currently the Polish stock exchange is the largest in the region with a capitalization of US$ 25.5 Cap Equities, EUR, small and medium sized bn, followed by US$ 9.4 bn in Hungary and US$ 7.8 bn in the Czech Republic. Macroeconomic companies domiciled in European countries; advantages, ongoing privatization and the development of pension funds should contribute to European Opportunities, EUR, European undervalued further growth of domestic capital markets. The opening of capital markets following the EU stocks with growth or re-value potential; Financial accession process should have a positive effect on market valuations. Sector Equities, EUR, equities issued by companies belonging to or involved in the banking, insurance Pension system reforms and/or diversified financial sectors worldwide; Euro High Yield Bonds, EUR, invested primarily in Private pension funds regulations and infrastructure (modeled on Latin American sub-investment grade bonds denominated in Euros, solutions) have recently been introduced in the Czech Republic, Hungary and Poland. In with an emphasis on lower rated bonds. the near future we should see further development of contractual savings associated with the mandatory and voluntary elements of the pension systems reforms. In Poland alone it KREDIETBANK LUXEMBOURG S.A. is expected that there will be approximately US$ 1 bn annual cash inflow associated with Part I SICAV MC Premium: Global Power Fund, the second pillar of the pension fund. EUR, equities of electricity, gas and water supplying All these factors will lead to a further opening up of the markets within these countries and companies. increasing macroeconomic stability within them. This in turn will most likely lead to a Part I SICAV Vitruvius: Italian Equity, EUR, Swiss decrease in risk premium and stimulate further economic growth. For the investment fund Equity, EUR / CHF, equities of Italian / Swiss industry these outcomes will constitute positive developments, as they, in turn, will lead to companies with high growth potentials in the long view. Part II SICAV Schoellerbank Funds: Value increases in liquidity flows into the capital markets of Central Europe. Protection, EUR, trading assets; Value Hedge / Value Hedge Protect, EUR, fund of funds. Dariusz Nowak Part I SICAV Urquijo Fondos KBL: Global Biotechnology, USD, biotechnology sector. Dariusz Nowak is a partner of PricewaterhouseCoopers. He can be reached on: Part II SICAV Sigma Fund: Enhanced, EUR, fund +352 49 48 48 2520 or e-mail: of funds. 7
  8. 8. N ewsletter July 2 2001 New Part II BSI - New Biomedical Frontier Investor's confidence remains (SICAV), USD, companies with a high growth potential in research and development in biomediacl technologies. unshaken despite market turbulence New Part II SICAV Sinope Alternative Funds: Long Short Global Bond Fund 300 Eur, EUR, Long Short Global Bond Fund 300 USD, USD, market neutral investment policy. At the close of the year 2000, assets under management with the Luxembourg domiciled New Part II SICAV Jefferies Equity Fund: Private investment funds amounted to 874.6 bn. In October, they had reached a peak of Equity. 924.13 bn, before declining stock prices started to push them down. New FCP KBC Life Priviledged Portfolio Fund, Defensive, Dynamic, Neutral, EUR, fund of funds. New Part II Miralt SICAV: Europe Multitech, USD, It is true that the year 2000 growth rate of "only" 19.1% was relatively low compared fund of funds. to the 51 per cent increase achieved in 1999, but the growth in assets of 140.1 billion New Part II SICAV C-Quadrat European in absolute figures in 2000 was the second most important boost achieved by the Pro-Funds: Blue Chip, Special, Balanced, EUR, fund of funds. industry since the beginning of the 1990s, after the record addition of some 247.7 billion in 1999. LLOYDS TSB BANK Lloyds TSB Bank has integrated its Lloyds Further to this, net inflows of fresh money also reached a record level of euro 168.2 bn. Americas Asset Management SICAV (LAAM) On the other hand, strong declines of stock prices made that financial markets accounted sub-funds Brazil International Fixed Income Fund and Argentina International Fixed Income Fund as for a loss in value of 28.1 bn on an annual basis, which is the largest decline in net assets new sub-funds into its Lloyds TSB International due to financial markets' performance ever suffered by the Luxembourg fund industry. Net Liquidity SICAV under the denomination LIL subscriptions however remained positive even during the last four months of the year, Brazil (US Dollar) Fund and LIL Argentina (US when the so called New Economy Markets brought a lot of bad news. Dollar) Fund respectively, while its LAAM sub- funds US Large Cap Equity Fund and Brazil Active Equity Fund have been integrated as new sub-funds Over the year 2000, the record number of 278 new funds have been added to the official into its Lloyds TSB International Portfolio list of funds domiciled and registered in Luxembourg. The number of new sub-funds SICAV. The LAAM US Small Cap Equity Fund launched by the increasingly popular multiple compartment funds grew by 1,119, so that compartment has been integrated into an existing the Luxembourg investment fund industry offered the investor a choice of no less than LIP fund under the denomination LIP - Smaller Companies Fund, while LAAM sub-fund Argentina 6,995 different fund portfolios at the close of the year. Equity Fund has been liquidated, which lead to the dissolution of LAAM. During the first four months of 2001, the overall trend remainded positive, but the evolution of assets under management continued to be heavily affected by stock market performance. Whilst total net subscriptions amounted to 42 bn, financial markets had a negative impact of 20.74 bn. The 21.26 bn increase of assets under management represents a 2.75 growth over the 2000 year end total. The number of fund units increased by 232 to 7.227.