Impact investing is more than just a label. In private markets in particular, impact is increasingly becoming a strategic category – for family offices as well as institutional investors. Markus Hill speaks with Christians Hommens on behalf of FINANZPLATZ-FRANKFURT-MAIN.DE about the critical success factors in this investment segment and the importance of professional dialogue among experts. Impact measurement, impact infrastructure, private equity, sustainability & investing, private debt – these and other topics form the basis for the exchange of ideas in March at a specialist conference (SMART IMPACT INVESTING & PRIVATE MARKETS). The importance of the Frankfurt ecosystem for investment, decision-making, and regulation in these areas will be highlighted.
Hill: Impact investing is often considered a „nice to have.“ Where do you see real structural change today, especially in the private markets?
Hommens: Impact investing is clearly evolving from a secondary issue to a core strategic question. In the private markets, family offices and institutional investors are increasingly recognizing that long-term returns, resilience, and impact go hand in hand. Infrastructure, private equity, and private credit make it possible to deploy capital in a targeted manner – with measurable impact and simultaneous value creation potential. Impact thus becomes a quality feature, not a compromise.
Christian Hommens, Smart Bridges GmbH & Markus Hill Finanzplatz Frankfurt
Hill: Where do investors fail in practice – and why is it worthwhile to exchange ideas at Smart Bridges?
Hommens: It’s hard to say, but we see three points coming up again and again: lack of impact measurability, unclear governance structures, and limited access to compelling deal flow. This is exactly where our forum comes in. We bring investors, practitioners, and solution providers together—not theoretically, but in a practical, interactive way and on an equal footing.
Hill: What specific topics will be the focus of the two days?
Hommens: From impact measurement and social impact to impact infrastructure. And, of course, private equity and sustainable portfolio design will be examined in more detail – supplemented by topics such as private credit, infrastructure, regulatory requirements, and new structuring models. Always with an eye on the question: How can impact be meaningfully integrated into portfolios without losing sight of performance?
Hill: Why is Frankfurt/Hesse the right place—and why now?
Hommens: Frankfurt and Hesse combine capital, decision-making authority, and regulatory proximity. In an environment of increasing uncertainty, investors are looking for guidance and long-term solutions. The connection between impact investing and private markets is highly relevant in this context – and our region is the ideal place for this dialogue.
Hill: Thank you very much for the interview. I look forward to the fireside chat on February 17, 2026 („Family Offices & Foundations,“ Impact Investing) and to the discussions on site.
Liechtenstein & Frankfurt as financial centers, fund boutiques, family offices, fund domicile, and dialogue in Germany – Markus Hill spoke to David Gamper, Managing Director of the LAFV Liechtenstein Investment Fund Association, on behalf of FINANZPLATZ FRANKFURT about topics such as Liechtenstein’s positioning and cooperation in European competition, trends in alternative investments, and regulation. In addition, given the current importance of fund regulations for family offices and asset managers, he provides a brief overview of the association’s other dialogue offerings in the German financial center in spring 2026 and in London.
Hill: What role does Liechtenstein currently play as a fund location in the European market – is it more of a niche or an up-and-coming fund center?
Gamper: I would describe Liechtenstein as an emerging niche. In Europe, there are two major fund centers, Luxembourg and Ireland, which focus primarily on large, mostly globally active asset managers. White-label funds play a subordinate role there, at least in terms of regulation and supervision. This is exactly where Liechtenstein comes in. The location focuses on optimal conditions for asset managers and fund boutiques that want to launch white-label funds, as well as on asset structuring for wealthy families, often with their own family offices. This is also reflected in the statistics: over 85% of funds domiciled in Liechtenstein are white-label funds, and the trend is rising.
David Gamper, LAFV Liechtensteinischer Anlagefondsverband
Hill: Are you currently launching many funds for family offices in Liechtenstein?
Gamper: Yes, developments in this area have been very positive in the recent past. We are seeing increasing uncertainty among wealthy individuals, triggered by geopolitical tensions, high government debt in Europe, and discussions about possible tax increases. Liechtenstein, on the other hand, has no national debt, has the lowest public spending ratio in Europe – i.e., the ratio of government expenditure to gross domestic product – and therefore no need to raise taxes. In addition, investment funds are completely tax-exempt. Political continuity and the AAA rating further strengthen confidence and make the location particularly attractive for long-term asset structures.
Hill: How is the fund location developing in the area of alternative investments?
Gamper: The alternative investments sector (investments outside stocks and bonds, such as hedge funds or infrastructure) is growing very strongly. Seven out of ten newly established funds are currently alternative investment funds (AIFs, which may include private equity, real estate, and other non-traditional assets). On the one hand, this is because funds for asset structuring (organizing investments and holdings for legal or tax purposes) are almost exclusively set up in this form. On the other hand, AIFs in Liechtenstein benefit from particularly flexible regulation. Liechtenstein has made use of the leeway deliberately provided by the EU and refrained from so-called „gold plating“ (implementing stricter rules than required by the EU), which is often seen in other fund domiciles. Another decisive factor is the Liechtenstein Financial Market Authority (the local financial regulator). Particularly in the case of complex AIF structures, it is very valuable for fund initiators to be able to enter into dialogue with the supervisory authority at an early stage. This cooperative practice is highly appreciated and has already led to the establishment of several funds.
Hill: What risks could slow down Liechtenstein as a fund location in the medium term?
Gamper: Like all fund locations, we are also dependent on geopolitical developments and their impact on the financial markets. We have only limited influence on this, but we must be prepared accordingly. Another risk lies in increasing regulation at the European level (more rules for financial firms working in the EU). Extensive reporting requirements and constant regulatory changes place a significantly greater burden on smaller fund companies, such as those typically found in Liechtenstein, than on large international providers. We clearly support sensible regulation that strengthens investor protection and transparency (making investments safer and more open). In recent years, however, the goal has been overshot in some cases. We therefore hope that the announced „Simplification Package“ (a legislative effort to reduce unnecessary rules) will bring noticeable relief again. We must also remain particularly vigilant in the areas of money laundering prevention and sanctions implementation (measures to stop illegal financial activity and enforce international restrictions). Despite very good results in recent audits (inspections by authorities), we are continuously working on further improvements, because a strong reputation is essential for a small financial center.
Hill: Do you see the shortage of skilled workers as a limiting factor?
Markus Hill, FINANZPLATZ FRANKFURT AM MAIN
Gamper: We are also affected by the general shortage of labor and skilled workers, but this cannot be considered a limiting factor. There are qualified personnel in other financial sectors in the country who are becoming increasingly aware of the fund industry, not least because of its strong growth. In addition, there is growing interest from highly qualified professionals from the nearby financial center of Zurich and from Germany. Overall, we currently see a balanced mix of demand and available talent.
Hill: Where will Liechtenstein be as a fund location in five to ten years?
Gamper: In my view, specializing in white-label funds was the right strategic move. Optimal, and in some cases even unique, conditions have been created for this target group. The growing interest from foreign fund companies also shows that we are on the right track. Following Luxembourg-based Axxion, Dirk Grosshans from Universal Investment also announced at the „Frankfurt Financial Center Meets Liechtenstein Financial Center“ event in Frankfurt on November 18, 2025, that he would be launching funds in Liechtenstein from the first quarter of 2026. Other providers will follow. I am therefore convinced that Liechtenstein will not only continue its growth course over the next five to ten years, but will even accelerate it in the coming years. There will be a lot more positive news to report.
Hill: What events are coming up soon?
Gamper: We will be attending various events in Germany. On January 28 and 29, 2026, we will once again be inviting visitors to engage in dialogue at the FONDS professionell KONGRESS in Mannheim. Interested parties can find out more about Liechtenstein as a fund location at our stand and talk to structuring experts about specific fund projects. In a presentation, a fund founder will report on his highly successful fund project and his positive experiences in Liechtenstein. On April 21 and 28, 2026, we will once again be presenting ourselves at the LAFV events in Munich and Hamburg. Fund founders will report on the unique location advantages of Liechtenstein, and the tax component of Liechtenstein funds will be highlighted. Verena Schlömer from the Liechtenstein Financial Market Authority will provide insights into the licensing and supervisory practices for funds. The next event in London will take place on June 25, 2026. The detailed program is yet to be announced, but the focus will be on the locational advantages and current developments of Liechtenstein as a fund center.
Rubén Zárate in conversation: Attitude, background, and the art of genuine encounters
Hill: Rubén, you have touched many people with your posts on LinkedIn. But let’s start at the beginning: Where does your story actually begin?
Zárate: I am 58 years old – although I hardly notice it. I feel much younger, perhaps because I am still curious and keep moving. I was born in Lima, Peru, but I spent my childhood in the highlands, in a small Andean village called Pachacayo, at an altitude of 3,800 meters. Life there was simple but intense: clear air, vast silence, alpacas, sheep, poverty – and strong bonds.
Rubén Zárate y Markus Hill
In 1975, my father took part in a two-year management course, which is why we moved as a family to Germany and Switzerland. During this time, we lived in various cities: Saarbrücken, Düsseldorf, Zurich, Solothurn, and Derendingen. I was eight years old. After that, we returned to Lima, where I attended the German School. At the age of 23, I came to Germany alone to study and stayed behind.
Since then – or rather, my whole life – I have moved between worlds: geographically, linguistically, culturally. These spaces between worlds continue to shape me to this day.
As a Peruvian citizen, my life in Germany was marked by uncertainty for a long time. It was very difficult to obtain a work permit, clarify documents, and claim rights. It was a life of fear and powerlessness—because others were making decisions about your life. In 2007, I finally took German citizenship. To do so, I had to give up my Peruvian passport. It was a painful but conscious step.
Hill: What were your first years in Germany like?
Zárate: Challenging. I was curious, but also uncertain. The language was foreign to me, the codes unspoken. I had to observe a lot, listen, and find my place. But I also learned early on how valuable it is to be able to move in different worlds. This ability to adapt without compromising myself has helped me throughout my life.
Hill: As a young man, you studied business administration in Germany and held many different positions. What guided you in this?
Zárate: An inner urge to get ahead. Not in the sense of a career at any price, but in the sense of understanding, helping to shape things—but also surviving. I worked at the headquarters of a German bank, then briefly in New York. After that, I worked in sales at FAZ, in call centers, in consulting firms such as Willis Towers Watson – and at some point also in the fashion industry with my own brand and designs. My collections were even sold at KaDeWe in Berlin, Alsterhaus in Hamburg, Galeries Lafayette, and at Loden-Frey and Ludwig Beck in Munich – and even in duty-free shops at major airports. I never believed in the one perfect career path. I believed in development.
Hill: Were there also phases when you had doubts?
Zárate: You bet—lots of them, in fact. Especially during transitional phases. When you don’t know what’s coming next, you often feel small. But I’ve learned that it’s precisely in these moments that the most important thing grows: confidence in yourself. And a different kind of success—one that can’t be measured in titles, but in attitude. The wonderful thing was that I kept meeting people who believed in me. That allowed me to pick myself up again and again.
Hill: Fashion is a completely different field. What attracted you to it?
Zárate: Style, identity, expression. Clothing is more than fabric—it’s attitude. And especially as someone who lives between worlds, I find clothing exciting. In addition to my job in the social sector, I am currently working on a new men’s collection made of alpaca that combines my roots and my current life. I tell my story in it. It’s not just about fashion, but about the narrativity of origin and elegance.
Catherine’s Church
Hill: How did you come up with the idea of using alpaca?
Zárate: Alpaca is an animal from my childhood in the highlands of Peru. My father was the managing director of a large company with around 2,000 employees that produced and exported alpaca and sheep wool as well as meat. For me, alpaca wool represents warmth, naturalness, and luxury at the same time. I wanted to create something that wasn’t loud but had character— , like many people I admire. This collection is not a mass-produced product, but an expression of an attitude: less, better—and with soul.
Hill: Today, you work full-time at the Franziskustreff Foundation. How did that come about?
Zárate: Brother Paulus, the chairman of the Franziskustreff Foundation, approached me in the middle of the coronavirus crisis. I wanted to do something meaningful. Today, as a philanthropic advisor, I support people who want to help institutionally or privately—and those who need help. I see myself as a bridge builder between two realities: those who can give and those who need to receive. Together with a great team, we organize breakfast for around 180 guests every morning and offer social counseling, and have been doing so for over 32 years. None of this would be possible without the help and trust of our donors.
It is quiet but profound work. I talk to donors, companies, guests – and often to myself. It’s about more than material help. It’s about dignity, equality, and trust.
Hill: What do you take away from these encounters?
Zárate: Gratitude. And humility. I have learned that not everyone who lives on the street is broken. And not everyone in a suit or business attire has clarity. I try to incorporate these stories into my everyday life – including on LinkedIn. I don’t share success stories there, but quiet stories of heroism. The world needs more of that.
Café Hauptwache
Hill: And when you’re not working?
Zárate: Then I live a secluded life—in the middle of the forest, in an old farmhouse in the Taunus mountains. Without luxury, but with soul. I enjoy cooking and baking, meeting good friends. I love country life, the rhythm of nature, the wood, the animals. This place gives me peace and grounding. It’s where I recharge my batteries. It’s where I listen—to myself and to the world.
Hill: You also organize private dinners. What’s that all about?
Zárate: They are small evenings with special people. Bankers, artists, people from social projects, lawyers, creative types. I invite them to a table in an honest atmosphere. There is good food, honest conversation, no titles. Everyone pays for themselves.
When I invite my guests, they know that I am able to bring together people with heart and substance. For me, this is the art of connection in action. And often, change begins when people simply sit across from each other – without an agenda.
Hill: You have a certain calmness about you. Where does that come from?
Zárate: Maybe from the highlands. Or from many conversations with people who have lost everything and still smile. Or from the knowledge that I don’t have to be the center of attention—but rather what develops between us. I believe in silence as a quality.
And perhaps also because I had a brain tumor at the age of 35 and underwent surgery. When you experience this firsthand—how quickly everything can change, how suddenly you become dependent and helpless—it changes your outlook on life. Since then, I have been living more consciously, more intensely, more thoughtfully. And above all: more gratefully. Perhaps that is also why my closeness to God has grown – not through constant church attendance, but through silent prayers. Especially during my walks in the forest. There I feel connected – without many words, but with an open heart.
But you mustn’t forget: I am Latino. And I definitely inherited my temperament from my mother. As my friends and colleagues can confirm, I am not always quiet. I can be very loving, but also direct and spirited. That’s part of who I am. And I don’t want to deny that. And yes – I’m not always quiet, but I’m always genuine.
Hill: What does Frankfurt mean to you?
Zárate: A lot. I’m also a Frankfurt native. It’s my city. I’ve often had to reinvent myself here. I’ve experienced advancement, built bridges, but also experienced loneliness. Frankfurt is tough, but honest. And there are people who really listen. I try to pass that on – whether in conversations, over breakfast at Franziskustreff, or in the evening over a glass of wine with friends.
Hill: You are a member of the expert advisory board of the Software AG Foundation’s „Fonds auf Augenhöhe“ (Fund on Equal Terms). What does this role mean to you?
Zárate: It is an expression of trust. We support projects that treat refugees as equals. For me, this is not just voluntary work, but an attitude. I myself came to a new country as a child. I know how quiet you can become when you don’t know if you belong. It’s about creating spaces where people are not only included in the thinking, but also in the feeling. I am convinced that origin is a commitment. And that’s how I live my life.
Hill: You often talk about attitude. What does that mean to you specifically?
Zárate: Attitude is when you remain upright even when no one is watching. It is the sum of experience, values, and courage. It means not going along with everything that is “ “ – but doing what is right. I believe that this plays an important role, especially in the financial center of Frankfurt. Perhaps more than ever.
And attitude is also evident in small things: when people say they’ll get back to you – and don’t. When offers are made, and nothing comes of them in the end. Especially in a city like Frankfurt, where many people trade on their expertise and present themselves brilliantly, I see this time and time again. For me, this is telling: those who are not reliable in small things will also find it difficult in big things. I’m not saying this reproachfully – but as an invitation to not only think about attitude, but to live it. Everyone talks about values today. But they must also be lived in everyday life – otherwise they remain empty words.
Hill: What do you wish for the future?
Zárate: More space. Less noise, more listening. And for people to learn to be with each other again – without an agenda. I want spaces for resonance, not just for reaction.
Hill: And for the Frankfurt financial center?
Zárate: Less mask, more attitude. And a table where there is room not only for numbers, but also for stories. I wish that humanity and sensitivity were not considered softness – but competence.
Hill: Rubén, thank you very much for the interesting and open conversation.
Zárate: Thank you, Markus, who says you can’t talk about attitude, dignity, fashion, and maybe even alpacas in the Frankfurt financial center? It was a real pleasure.
LINK / INFORMATION ABOUT THE FRANKZISKUSTRFF FOUNDATION
„Allerdings sind die Multi Family Offices längst nicht alle gleich gut“
Wo treffen sich Family Officers in Deutschland? Welche Themen prägen aktuell die Agenda – von Nachfolgekonflikten über Testamentsvollstreckung bis hin zu Private Markets? Markus Hill sprach für FINANZPLATZ FRANKFURT mit Dr. Henning Schröer, FIDUBONUM, über die Kunst der Moderation in Familien, die Herausforderungen bei der Auswahl von Multi Family Offices und die Frage, wie Produktanbieter mehr Gespür für die Realität und die Interessenlage von Family Offices entwickeln können. Zusätzlich angesprochen wurde auch das Thema Family Offices, Financial Education & Networking (8. Jahrestagung Family Office).
Dr. Henning Schröer, FIDUBONUM & Markus Hill
Hill: Welche Themen beschäftigen Sie derzeit intensiver? Schröer: Ich habe im Moment mehrere Mandate, in denen ich mit Familien eine Inhaberstrategie erarbeite. Die Konstellationen sind jeweils sehr unterschiedlich: eine Familie ist sehr groß und es geht vorrangig darum, Gemeinsamkeiten zu schaffen und den Familienzusammenhalt zu stärken. Bei einer anderen Familie gibt es mehrere Dinge, die seit Jahren schon schwelen, aber nie richtig angesprochen wurden. Bei einer dritten Familie knistert es gewaltig, nicht zuletzt aufgrund vermeintlicher Ungerechtigkeiten beim Erbe. Obwohl die Fälle sehr unterschiedlich liegen, hilft es eigentlich immer, mit den Beteiligten über ihre Werte und die sich daraus ergebenden Ziele zu sprechen. Das lenkt zunächst von den kleinteiligen Konflikten ab. Trotzdem lassen sich vom Allgemeinen kommend dann doch sehr konkrete Lösungen entwickeln. Es ist spannend – und nicht selten sogar beglückend – zu sehen, wie viel man hier mit guter Moderation erreichen kann.
Hill: Die „8. Jahrestagung Family Office“ steht vor der Tür. Wie sieht in groben Zügen das Programm aus, Themenstränge und Besonderheiten? Worauf freuen Sie sich besonders? Schröer: Wir haben wie immer bewusst viele Themen aus ganz unterschiedlichen Bereichen ausgewählt, denn die Jahrestagung soll ja vorrangig den Zertifizierten Family Officern eine thematisch breite Fortbildung ermöglichen. Anknüpfend an die vorherige Frage haben wir eine Mediatorin zu Gast, die zunächst abstrakt und dann im Gespräch mit mir anhand einiger Beispielsfälle vorstellt, wie es in zerstrittenen Familien weitergehen kann, wenn ich mit meinem Latein am Ende bin. Wir haben ein paar spezielle Anlagethemen wie Private Markets, Start-up-Investments und Drittsicherheiten. Sehr geschätzt von unseren Gästen sind auch immer Einblicke in andere Family Offices. Da haben wir in diesem Jahr Porsche, Syngroh (Hansgrohe) und Merck am Start. Und auch für große Familien wichtige Themen wie Testamentsvollstreckung und Sicherheitsrisikomanagement stehen auf der Agenda. Worauf ich mich besonders freue? Die Veranstaltung wird bestimmt wieder toll. Aber ihren ganz besonderen Reiz zieht sie daraus, dass wahrscheinlich nirgendwo sonst in Deutschland so viele Family Officer aufeinandertreffen und sich austauschen. Da ist im Laufe der letzten Jahre ein richtiges Netzwerk entstanden, weil wir ganz viele „Stammgäste“ haben. Das ist nützlich, aber es ist auch einfach menschlich schön, bestimmte Leute jedes Jahr zur Jahrestagung wiederzutreffen.
Hill: Wir hatten zu Beginn des Jahres bei meinem Panel „Finanzplatz Frankfurt am Main meets Family Offices, Asset Allocation & Financial Education“ eine interessante Diskussion über ein Projekt von Ihnen, dass sich mit der Auswahl eines Multi Family Offices beschäftigt. Wie hat sich das Projekt dann im weiteren Prozess entwickelt? Welche Schritte waren erforderlich und welche Erfahrungen ziehen Sie aus solchen Projekten? Schröer: Ich erlebe es in letzter Zeit häufiger, dass Familien sich explizit gegen ein Single Family Office entscheiden, auch wenn ihre Vermögensgröße ein solches hergäbe, und lieber nach einem passenden Multi Family Office schauen. Das erspart ihnen viel Aufwand und Verantwortung. Allerdings sind die Multi Family Offices längst nicht alle gleich gut. Und auch die besten von ihnen sind in manchen Bereichen stärker als in anderen. Deshalb ist es für eine Familie, die ein Multi Family Office beauftragen will, ganz wichtig, vorab zu klären, welche Leistungen sie sich von ihm in welcher Qualität erhofft. Das sind dann ganz ähnliche Überlegungen, wie man sie bei der Gründung eines Single Family Office anstellen würde. Auch die Investmentphilosophie sollte idealerweise schon vor Beginn der Suche feststehen. Es sollte also z.B. geklärt sein, in welche Assetklassen investiert werden soll, an welche Alpha-Quellen man glaubt, wie das Risiko eingegrenzt werden kann, welcher Grad an Unabhängigkeit für die Familie gewahrt bleiben soll etc. Danach kann man mit einer sehr spitz auf die Bedürfnisse der Familie formulierten Ausschreibungsunterlage an verschiedene Multi Family Offices herantreten und mit ihnen über die für die Familie wirklich wichtigen Punkte reden. Auch dann fällt es oft noch nicht leicht, die jeweilige Qualität von außen zu beurteilen. Aber Erfahrung, der Vergleich der Multi Family Offices im Verfahren miteinander sowie der ein oder andere Erfahrungsbericht aus meinem Netzwerk führen letztlich doch zu einem ziemlich guten Bild. Allerdings muss dann auch noch die persönliche Chemie stimmen. Wenn die Familienverantwortlichen mit dem qualitativ besten Multi Family Office oder ihrem für sie zuständigen Repräsentanten fremdeln, wird das zweitbeste oft das bessere sein. Übrigens kann ich mich des Eindrucks nicht erwehren, dass die Wettbewerbssituation eines Ausschreibungsverfahrens auch positiven Einfluss auf die angebotenen Preise hat. Da können die für das Auswahlverfahren aufgewandten Gebühren schon nach wenigen Monaten wieder reinverdient werden.
Hill: Sie waren in Berlin auf einer Veranstaltung, die sich an Produktanbieter wandte und diesen die Besonderheiten von Family Offices vermittelt hat. Worüber genau haben Sie gesprochen? Schröer: Ich habe schon in meiner Zeit als Family Officer der Familie Merz oft den Eindruck gehabt, dass Vermögensverwalter, Fondsmanager, Projektentwickler und andere Produktanbieter mit ein bisschen mehr Gespür für die spezifische Gemengelage eines Family Officers in ihren Vertriebsbemühungen deutlich erfolgreicher sein könnten. Aber dieses Gespür zu entwickeln, ist natürlich nicht ganz einfach. Dabei wollten wir mit unserer Veranstaltung in Berlin unterstützen. Die große Verschiedenheit von Family Offices wird oft betont. Sie ergibt sich nicht nur aus den unterschiedlichen Aufgabenkreisen und der individuellen Entscheidung über Make-or-Buy. Sie hängt auch von Größe und Reifegrad der Familie und der Evolutionsstufe des Family Offices ab. Eine Rolle spielt ferner, wie intensiv sich die Familie in das operative Geschäft des Family Office involviert und wie stark Entscheidungsprozesse institutionalisiert sind. Der Family Officer kann auch hinsichtlich der Vermögensanlage ganz unterschiedliche Rollen spielen. Setzt er nur Investmentideen um, die ihm sein Prinzipal oder eine detaillierte Anlagestrategie vorgeben, wird er für Opportunitäten nicht ansprechbar sein. Wenn die unternehmerische Freiheit des Family Officers gering ausgeprägt ist, wird er möglicherweise an tollen Anlageideen gar nicht interessiert sein. Dann kann er ein Gatekeeper sein, den es zu umgehen gilt. Ob das tunlich ist, will aber auch wohl überlegt sein. Diese und etliche weitere Punkte zu verstehen, ist wichtig, um zu wissen, mit welchen Produkten man sich an wen aus Family Office oder Familie wenden kann. Nicht jeder dieser Punkte lässt sich von außen eindeutig aufklären, aber wenn man weiß, auf welche Dinge man schauen muss, erschließt sich doch schnell recht viel aus dem Innenleben eines Family Offices. Die Seminarteilnehmer in Berlin waren so angetan davon, dass wir entschieden haben, das Seminar demnächst zu wiederholen und auch als firmeninternes Seminar anzubieten.
Switzerland, Asset Management, Real Estate Investments, and Mumbai. Markus Hill spoke to Ravikant Susarla of Seraina Invest AG on behalf of FINANZPLATZ FRANKFURT AM MAIN about the challenges facing a Swiss Asset Manager investing in real estate development in India. Using Mumbai as a prime example of a market for luxury real estate, topics such as risk management, the importance of local networking and expertise, the competitive environment, and “cultural fit” are discussed. All of these factors play an important role in the initial design and current investment decisions of the real estate fund.
Hill: You live in Germany but are Indian and work for a Swiss company that deals with real estate investments in India?
Susarla: I grew up in Mumbai, India, and studied Business and Economics there. In my professional life, I have been closely associated with start-up operations in diverse industries. This helps me to develop an umbrella perspective of different types of business. Over the past several years, I have been associated with real estate investments. I work for a Swiss real estate fund that invests in the development of high-quality residences and office space in India. Currently, we are focused on Mumbai.
Ravikant Susarla, SERAINA INVEST AG
To effectively manage risks associated with real estate development, closely monitor the quality of development, and differentiate ourselves from the competition, we manage the entire lifecycle of the investments in-house. Lifecycle meaning: scouting for investment opportunities, conducting due diligence, capital deployment, development, construction, sales, and finally the exit. With a “boots-on-the-ground and ears-to-the-market” business philosophy, I am closely associated with our operations in Mumbai. We have an office and a highly qualified development team of 14 colleagues in Mumbai, but we are also open to collaborating with domestic third-party, like-minded partners. India is a highly competitive market with capable local players. As an European investor, it is not easy to enter the Indian real estate market and develop a robust business model. We believe that we have successfully managed both.
Hill: What led the fund to launch in Mumbai? Is this your core market?
Susarla: India is a very diverse land; every region and city in India is a country within a country. Identifying where one would invest in India is similar to identifying an investment opportunity in Europe, i.e., which country, which region, and which city? This diversity is often underestimated by foreign investors entering the Indian market. Further, Real estate is a very local/domestic business. One has to navigate the local regulations, building norms, understand the local population’s live work, social life, spending habits, aspirations, and no-goes. Understanding the diversity and complexity of India led us to the decision to launch and focus on just one city – a city that would match our expectations and also one that would have a high acceptance for our design, development, and professional nature of conducting business. As a foreign investor, this was the first line of reasoning we used to find a “cultural fit” for our Swiss brand. We adapted to the uniqueness of the Indian market and chose to launch with Mumbai as our core market.
Hill: What, according to you, is the story of Mumbai’s Urban Development?
Susarla: Mumbai is a very multicultural city with a population of 21,7-mn million residents (UN World Urbanisation prospects). If I have to explain Mumbai’s importance within India, I would probably compare Mumbai’s position in India to London/New York/Singapore, or Dubai’s role in the world. Mumbai, as a city, has always been prosperous. It is the centre of India’s corporate world, financial sector, Bollywood, a seaport and airport city with skyscrapers and a great social life. If India has to grow by 7% annually, Mumbai has to prosper at least twice as much, at 15%. If I can summarize the Mumbai Urban development story in just one word, that is “Upgrade” – an Upgrade of massive proportions. Whether it’s a USD 70-bn infrastructure upgrade – Metro-lines, high-speed train connection, roads, bridges, a new airport, a new sea-port, or a real estate upgrade (including residential buildings, offices, malls, entertainment centers), everything is being upgraded to meet the ambition of a new India. There is even a much bigger growth story in the waiting with the expansion of the city’s administrative limits (under MMRDA) to a larger Greater Mumbai. There has always been wealth in Mumbai; what is happening now is that infrastructure, urban development, and real estate development are highly organised and professional. There is an unmet demand for high-quality real estate of all types. In FY 2024, Mumbai’s luxury segment grew by 17%, consistently the highest of any city in India. This demand has been pent for decades, it stems from a deep desire of Mumbaites to “Upgrade” to international standards.
Hill: From a foreign investor’s perspective, what are the important regulatory aspects of the Mumbai real estate market?
Susarla: The development (and redevelopment) norms in Mumbai are quite transparent & streamlined. Many cities in India try to emulate the Mumbai model. There are Real Estate-consumer specific protections such as RERA (Real Estate Regulation and Development Act), which has built huge trust in the market. The law is strict regarding compliance and adherence to norms by developers and protects consumers. Project developers must register projects with RERA and provide accurate disclosures about project status, finances, and timelines. A variety of investor protection laws, such as the Insolvency and Bankruptcy Code (IBC) and the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI), have played a vital role in securing an investor’s legitimate rights. All these measures collectively aim to foster investor confidence in India’s real estate market by ensuring fairness and minimizing risks.
Hill: What are the commercial reasons for being in Mumbai?
Markus Hill, FINANZPLATZ FRANKFURT AM MAIN
Susarla: In terms of work culture, Mumbai has a great work ethic, which is professional, progressive, and entrepreneurial. Add to this a deep existing pool of young, qualified, and ambitious workforce, it’s an ideal city for a foreign company to launch its business. On the market aspect; just to give you an idea of the buying capacity of the market based on income levels – according to a Knight Frank Wealth Report- the number of Indian ultra-HNIs is expected to rise to 19,908 by 2028 vs 13,263 in 2023, a 50.1%growth – which is the highest growth in the number of ultra-HNIs for any country. Mumbai is the largest residential market in terms of residential sales value, it contributes ~35%-40% to the total residential sales value in India. Mumbai is also the epicentre of ultra-luxury homes. Mumbai accounted for 84% of ultra-luxury property sales in 2024.
The Mumbai upgrade story for us is a huge opportunity to grow in the aspirational and premium segments, and this growth story is likely to be carried into the decades ahead. To summarize, Swiss precision made for a dynamic market in India.
Hill: You have detailed Mumbai as a potential market for real estate investments. What are the key features of your fund?
Susarla: Launched in 2019, the India Real Estate Opportunity Fund (RAIF, LUX SICAV) is the main focus of Seraina Invest’s commitment to India. The fund is explicitly aimed at institutional investors from Switzerland and is supported by leading partners such as Waystone (AIFM) and APEX GROUP (custodian bank). The portfolio currently comprises three high-potential projects in Mumbai with USD 100 million assets under management. The target return is 15% p.a. in US dollars, and currency risk against the Indian rupee is fully hedged. In 2024, the fund achieved a performance of 13.5%.
Frankfurt as a financial center, innovation, “Deep Tech Law & Diplomacy,” resilience, Wholistic World Innovation Trophy – Markus Hill spoke with Dieter Brockmeyer (DIPLOMATIC WORLD) about the academy’s current activities in these areas, book publications, and the Institute for Research, Entrepreneurship and Investment (SEI) in Washington, D.C., and the Indian Global Academy for Law and Technology Education and Research (GALTER). Other topics discussed included Silicon Valley Europe, start-ups, the Rhine-Main region, and “Frankfurt & cigars.”
Hill: Why we need to become resilient?
Brockmeyer: I gave an interview for the local German finance industry platform “Finanzplatz Frankfurt am Main” (Financial Center Frankfurt) giving an update on my work with the Diplomatic World Institute and its growing partner network. The key issue, of course, is making our societies resilient to tackle the unprecedented and accelerating change coming with deep-tech advancement. This is the English version of that conversation with Markus Hill.
Hill: Could you give us a brief update on your institute’s activities?
Brockmeyer: A lot has happened since we last spoke. I’ve already started working on my next book, although progress has been slower than usual due to other pressing commitments. We have launched the academy. The course for aspiring diplomats on the impact of deep tech on their work was something we conceptualized right at the beginning, shortly after founding the institute in 2019. However, it took us until last year to find the right partners. We are now working on this with the Institute for Research, Entrepreneurship and Investment, SEI, in Washington, D.C., and the Indian Global Academy for Law and Technology Education and Research (GALTER). We just very successfully finished this ten-week online course, featuring globally renowned speakers and initially offered exclusively to Indian students. We will continue to strengthen our partnerships with both, including through additional projects, which has already led to a strategic alliance with SEI. Since April 1st, I have been serving on SEI’s Board, responsible for innovation and European relations, in addition to my role within the Diplomatic World Group. In turn, SEI founder Ingrid Vasiliu-Feltes has joined the advisory board of DWI.
In addition, I have launched the next round of the Wholistic World Innovation Trophy, which will be awarded again in Barcelona on October 13th. We are also expanding our video podcast, “Today & Tomorrow.” There should be some exciting updates on that soon. All these initiatives are part of an innovation platform we are developing, which will include additional elements that we hope to present in full soon. However, I must admit that there’s still a long road ahead.
Dieter Brockmeyer (DIPLOMATIC WORLD) & Markus Hill ( FINANZPLATZ FRANKFURT AM MAIN)
Hill: I have to press on this: When you talk about an innovation platform, what exactly do you mean?
Brockmeyer: We are facing enormous global challenges, many of which are not yet fully recognized in their impact. People feel , but the root cause is often ignored: rapid technological progress is fundamentally transforming our lives and leaving us with less and less time to adapt. This is overwhelming, and if left unchecked, it will lead to increasing societal disruptions. What we need is innovation resilience. Building that resilience will become ever more critical in the years ahead. Our goal, through our activities—books, podcasts, awards, the academy, and eventually conferences and other initiatives—is to create an integrated platform where experts worldwide can exchange ideas and develop solutions to address these challenges.
The working title for this initiative is “CAMPUS MUNDI,” inspired by the title of the German edition of my last book. The task is far too significant to be tackled alone—it requires a collective effort. But as I said, we still have a long way to go!
Hill: When you talk about innovation resilience, that sounds like a nice buzzword. But what do you mean by it concretely?
Brockmeyer: That’s precisely the topic of my next book. In essence, it was already the subject of CAMPUS, even though I hadn’t yet labeled it as such. Resilience is a very popular term at the moment—everyone wants to become more resilient, whether in their relationships or careers. Typically, resilience is seen as something separate from innovation. If I am innovative in my personal environment, I become more resilient in everyday life. However, most people don’t realize that they need to learn how to handle innovation. There is a gap here that we need to close.
Hill: The concept of the academy is fascinating. What’s next for “Deep-Tech Law & Diplomacy”?
Brockmeyer: At the end of March, we held the final event of the first course. So far, everything has gone very well, and we – the partners in this project – will take a closer look at everything in detail. We’ve already received external interest in supporting us with the next phase of development, and we’re already planning the next round for this fall. Looking ahead, we’ll likely explore other topics as well and develop new offerings. We’re expecting to do that once again in collaboration with partners.
Hill: So, it’s about dealing with technological progress?
Brockmeyer: Essentially, yes—but not only that. We focus on deep tech, which refers to transformative technologies, but also on how they are implemented. For instance, we examine blockchain technology—not just Bitcoin or its effects on the financial industry, but in a much broader and more comprehensive way. The same applies to artificial intelligence and the inevitable acceleration of progress brought about by quantum computing. That’s why we are deeply engaged with the startup scene and collaborate with the World Business Angel Investment Forum (WBAF). In the future, we aim to strengthen these ties with international organizations.
Hill: What does all this mean for the positioning of your institute?
Brockmeyer: We are positioning ourselves primarily through the academy, but also through flagship initiatives like the Wholistic World Innovation Trophy and our podcasts. These events and projects shape the institute’s public perception. We are increasingly being recognized, and I am receiving more invitations to present our work at international conferences. We are seen as authentic and competent—a reputation that has taken time to build but is now yielding results. The current global situation also plays a role in this. Diplomacy is gaining significance and is being viewed in a new light by many. Despite the uncertainties, this presents an opportunity that we intend to seize.
Hill: Are you active in Frankfurt as well? What does the city mean to you?
Brockmeyer: At the beginning of the year, we supported Silicon Valley Europe in launching its Plug & Play initiative, which connects tech startups with investors. The initial event was quite promising. Although the initiative is not based in Frankfurt but rather in the Rhine-Main region, SVE is headquartered in Darmstadt. We will definitely build on this. There are several exciting ideas on the table, but unfortunately, there is currently not enough time to pursue them all.
That doesn’t change the fact that Frankfurt remains my home base. Brussels is a beautiful city, but I can’t unwind there—especially not at international conferences held in various locations. Frankfurt, on the other hand, is my creative space. It’s where I develop new ideas, write, and, most importantly, recharge my batteries. Many of the projects I later implement originate here and are first discussed and refined within Frankfurt’s creative circles. The city is not just a business hub; it is also highly creative.
A great example is a monthly gathering where we discuss the creative industries in Hessen and project ideas while enjoying cigars in various locations—sometimes privately, sometimes in lounges. It’s a dynamic group that continues to grow and attract new guests.
Hill: Thank you very much for talking to us.
Current Event Dates:
Europe Days from May 16 to 18 in Neudrossenfeld: Discussion with the Vice President of the European Investment Bank (EIB) and MEP Monika Hohlmeier
Book presentations CAMPUS MUNDI: June 14 and 15, 2025: Galerie Adriana and others, Vienna
Dieter Brockmeyer & CAMPUS and CAMPUS MUNDI – Image by Natalie Färber, LIQUID Kommunikationsdesign
Nestled in the heart of Europe, Luxembourg stands as a global financial powerhouse, defying its modest size. Beyond its scenic beauty and rich history, Luxembourg boasts a unique fusion of expertise, extensive networks, and a thriving private market ecosystem that continues to captivate a discerning business audience. In this article, we delve into what sets Luxembourg apart as a hub for private markets and alternative investment funds while exploring the dynamic interplay between personal networks, expatriate communities, and the flourishing business landscape of the Grand Duchy.
The Grand Duchy’s Formula for Success
Luxembourg’s allure in the world of private markets and alternative investment funds owes much to its regulatory prowess. Operating under a robust regulatory framework, Luxembourg seamlessly combines stability and flexibility, fostering an environment where innovation thrives, and investor confidence remains steadfast. This equilibrium attracts asset managers, private equity firms, and hedge funds seeking smooth access to European markets.
Moreover, Luxembourg’s extensive tax treaty network and EU passporting rights offer unparalleled access to investors and markets across the European Union. This strategic positioning has been instrumental in attracting capital not only from within Europe but also from beyond its borders.
The Power of Personal Networks
While regulatory and logistical advantages are pivotal, Luxembourg’s true strength lies in its interconnected personal networks. In a nation where a thriving expatriate community fosters an environment of opportunity, personal relationships often form the bedrock of business ventures. Business leaders, financial professionals, and entrepreneurs converge in Luxembourg, forging a unique environment where ideas, funds, and expertise flow seamlessly.
These networks extend far beyond Luxembourg’s borders. The Grand Duchy has long served as a melting pot of cultures and nationalities, attracting professionals from around the world. This diverse expatriate and business community cultivates a dynamic setting that transcends international borders.
Navigating the Alternative Investment Landscape
Luxembourg’s prowess in the private markets and alternative investment funds arena is unmistakable. It has solidified its status as a premier domicile for alternative investment structures, encompassing private equity, real estate, and infrastructure funds.
Here are some reasons:
Expertise: Luxembourg boasts a deep multilingual talent pool of professionals with specialized knowledge in alternative investments, from fund administrators to legal advisors, ensuring the expertise required to manage complex structures is readily available.
Global Distribution: Luxembourg’s extensive distribution networks enable fund managers to access a diverse array of investors, a priceless asset in today’s globalized investment landscape where access to capital is paramount.
Efficiency: The country’s efficient regulatory framework, coupled with its cutting-edge fintech infrastructure, streamlines fund operations and enhances transparency, providing investors with robust oversight.
Sustainability: Luxembourg leads in promoting sustainable finance, with the government’s unwavering commitment to ESG (Environmental, Social, and Governance) principles aligning with the global shift toward responsible investing.
The Luxembourg Advantage in Private Markets
Luxembourg’s appeal in private markets transcends access to capital or favorable regulations; it’s the vibrant, interconnected ecosystem that truly sets Luxembourg apart. The Grand Duchy’s private markets industry thrives because of the close-knit relationships that facilitate deal-making and innovation.
The Role of Industry Associations
Luxembourg’s success story in the fund industry is greatly indebted to industry associations such as the Association of the Luxembourg Fund Industry (ALFI), the Luxembourg Private Equity and Venture Capital Association (LPEA), and also Luxembourg for Finance as public-private agency. These associations play pivotal roles in shaping the future of the fund industry in the country. Through their collaborative efforts, these associations have enhanced Luxembourg’s reputation as a top destination for private markets and alternative investments, reinforcing the nation’s commitment to excellence and innovation.
ALFI (Association of the Luxembourg Fund Industry): ALFI has been at the forefront of advocating for the Luxembourg fund industry, celebrating its 35th anniversary in 2023. It provides valuable insights, conducts research, and fosters a collaborative platform for industry stakeholders. ALFI’s initiatives have created an encouraging environment for innovation and growth in the fund sector.
LPEA (Luxembourg Private Equity and Venture Capital Association): The LPEA is instrumental in driving the private equity ecosystem in Luxembourg. LPEA actively promotes knowledge exchange, networking, and the adoption of industry best practices, further strengthening the country’s position as a leading private markets hub.
Luxembourg for Finance: Luxembourg for Finance plays an integral role in promoting the Grand Duchy as an international financial center. It acts as a catalyst for attracting financial institutions and investors while facilitating dialogue between the public and private sectors.
Future Outlook
In the future, Luxembourg remains well-positioned to navigate the evolving landscape of private markets and alternative investments. The Grand Duchy is at the forefront of embracing emerging trends in the industry, including digitalization and the growing importance of ESG criteria in investment decisions. These forward-looking initiatives are expected to further strengthen its status as a leading financial hub with global reach.
Conclusion
In conclusion, Luxembourg’s distinctive blend of expertise, extensive networks, and a thriving private market ecosystem has solidified its global leadership in alternative investments. Bolstered by its deep ties with expatriate and business communities and supported by industry associations like ALFI, LPEA, and Luxembourg for Finance, Luxembourg’s business environment encourages innovation, collaboration, and embraces diverse perspectives.
For sophisticated business and fund professionals seeking an integrated financial platform in private markets and alternative investment funds, Luxembourg isn’t just a location; it’s a strategic nexus where talent, capital, and networks converge. This unique ecosystem continues to shine as a beacon of financial excellence, emphasizing the lasting influence of relationships and industry collaboration in the world of finance.
Thorsten Lederer, with over 25 years of experience in the financial sector, including senior roles at Citigroup and ABN AMRO, currently serves as a Senior Advisor at Trustmoore Luxembourg. Trustmoore is known for its excellence in delivering tailored fund administration and capital markets services. Mr. Lederer’s finance blogs, covering topics such as distressed debt, private equity real estate, and middle-market investing, complement his frequent appearances as a moderator and panelist at private markets conferences.
Report on the Forum Bundesbank event at the head office of the Deutsche Bundesbank in North Rhine-Westphalia on 16 November 2023
The United Kingdom (UK) finally left the European Union (EU) at the end of the 11-month transition period on 1 January 2021. Some observers predicted difficult times for the British economy in the run-up to this and forecast a high migration of jobs from London as a financial centre to the EU, for example to Frankfurt and Paris. Has this happened? How has the British economy developed since then and what are the future prospects for the British economic model post-Brexit and the important financial centre of London?
Johannes Gerling, representative of the Deutsche Bundesbank in London, addressed these and other questions in his presentation at the Deutsche Bundesbank’s head office in North Rhine-Westphalia on 16 November 2023. There is great interest in the topic, as developments in the UK and London are of great importance both for the financial centre of Frankfurt and for the North Rhine-Westphalian economy.
Structure of the British economy and the role of the financial sector
The structures of the British and German economies differ significantly. In order to better understand current developments, some background information should be provided first:
– The British economy in comparison1:
UK Germany (DEU) Population: 66.97 million 84.08 million GDP $3.07 trillion $4.07 trillion GDP per capita $45,850 $48,433
The British economy is significantly less export-oriented than the German economy (GBR approx. 31 %, DEU approx. 48 %)2 and strongly characterised by the service sector (GBR approx. 80 %, DEU approx. 70 %)3 – this is particularly evident in foreign trade (DEU: clear dominance of goods exports; GBR: almost balanced ratio between goods and service exports)
The financial sector is of particular importance to the UK economy (share of value added approx. 8% (e.g. DEU: approx. 4%), jobs in the financial sector approx. 1.1 million, 405 thousand of which are in London).
The EU is by far the most important trading partner for the UK, although its share has been declining for some time (exports 42%, imports 50% of total trade in 2022). A deficit in bilateral trade in goods with the EU of £117 billion contrasts with a surplus of £25 billion in trade in services.
New framework for EU trade relations
Two agreements form the essential basis for new relations between Great Britain and Northern Ireland and the EU:
The Withdrawal Agreement primarily regulates the rights and obligations arising from the UK’s long-standing membership of the EU, including payments to the EU budget. The Northern Ireland Protocol as part of the agreement prevents a “hard border” between Northern Ireland and the Republic of Ireland, but at the same time introduced a new customs border between Great Britain and Northern Ireland. The agreement came into force on 1 February 2020 and provided for a transition period for the UK to remain in the EU single market until the end of 2020.
The trade and cooperation agreement primarily regulates trade relations and fishing quotas, but also cooperation in areas such as law enforcement, justice and research. It was signed on 24 December 2020 and came into force on 1 January 2021. It enables the largely duty-free movement of goods, but does not prevent the creation of new, non-tariff trade barriers (customs documents, product safety certificates, etc.). The free movement of persons between the EU and the UK no longer exists.
Similar to other modern free trade agreements, the trade and cooperation agreement essentially only contains very general agreements on trade in services that hardly go beyond the level of the corresponding WTO standards (World Trade Organisation). In the area of financial services, the UK is basically treated like any other third country. A corresponding equivalence decision by the EU, which would form the basis for EU-wide market access, currently only exists in the area of central counterparties (CCPs)4. The financial market dialogue newly established between the EU and the UK does not conceptually go beyond the EU’s exchange formats with the USA and Japan, among others, and does not decide on market access issues.
After Brexit was finalised, relations were initially severely strained as the British government refused to implement the Northern Ireland Protocol agreed with the EU, including new customs controls between Great Britain and Northern Ireland, in accordance with the treaty. An important step towards normalising relations between the EU and Great Britain is the “Windsor Framework” from February 2023, as it addresses some of the key issues surrounding the Northern Ireland Protocol:
Trade and customs issues: Establishment of so-called “Green Lanes” for goods that remain in Northern Ireland (quasi abolition of customs controls), acceptance of GBR standards for food in Northern Ireland by the EU (must bear “not for EU” labelling). Simplifications also for medicines. Parcels to friends and family and from online shops no longer require customs documents. Greatly simplified entry for pets. Specific customs problems for steel are eliminated.
Subsidies and VAT: Restriction of Brussels’ right to have a say on subsidies affecting Northern Ireland. Extensive exemption of Northern Ireland from EU VAT rules.
Sovereignty and institutions: “Stormont Brake” allows the UK to suspend the application of new EU internal market rules in Northern Ireland (EU can respond with “targeted remedial measures”).
There are new foundations for cross-border financial services post-Brexit:
The implementation of Brexit on 31 December 2020 created new conditions for market access in the EU. EU-wide passporting was lost. Instead, EU equivalence decisions and a “patchwork” of national access regulations apply.
The UK granted EU institutions a transitional period of up to three years through the “Temporary Permissions Regime” (even longer in some areas). The EU did not offer any such transitional arrangements for British institutions; these existed or exist in part at national level in the member states. In addition, far-reaching special powers were granted to the British institutions.
In addition, far-reaching special powers were created for the British supervisory authorities (Temporary Transitional Powers) for up to three years in order to be able to flexibly counter possible frictions caused by the on-shoring5 of EU regulations.
Equivalences are the new basis for EU-wide market access, but they do not represent an equivalent replacement for the passporting rights that have been abolished. The EU regulations provide for a total of around 40 sub-areas in which EU-wide equivalence decisions can be made. However, many important regulatory areas are not covered, e.g. credit and insurance transactions or payment services. EU decisions on equivalences are the responsibility of the EU Commission and are unilateral discretionary decisions that are taken in accordance with the priorities of the EU and the interests of the EU financial markets, if necessary with the involvement of the European supervisory authorities, and can be withdrawn unilaterally with a notice period of 30 days.
To date, the EU has been very reluctant to issue equivalence decisions for the UK. There is currently only one EU equivalence decision for the UK, which applies to the UK regulatory and supervisory framework for central counterparties (CCPs).
A joint declaration made by the EU and the UK at the end of 2024 together with the trade and cooperation agreement provided for the establishment of a joint forum for regulatory cooperation in the financial sector. Parts of the British tabloid press therefore expected a downstream “Brexit Deal for the City” with further decisions on EU equivalence at the beginning of 2021. In reality, however, only a framework agreement was reached on the format of a legally non-binding regulatory dialogue similar to the dialogue between the EU and the USA, which provides for an exchange on current regulatory developments, among other things. The granting of EU equivalences, on the other hand, remains a unilateral decision by the EU Commission. The first meeting of the new financial market dialogue took place on 19.10.2023.
Another contentious issue is the extensive use of UK financial market infrastructures for clearing derivatives by financial institutions based in the EU. Temporary EU equivalence for UK CCPs was initially granted until mid-2022, which was necessary to ensure financial stability. The London clearing houses LCH Clearnet and ICE Clear Europe have been categorised as “systemically important” (regulatory indicator Tier 2) by the European Securities and Markets Authority (ESMA). This means that they are subject to ESMA’s direct supervisory powers and the direct applicability of the European Market Infrastructure Regulation (EMIR). The EU Commission is endeavouring to reduce the EU’s excessive dependence on third-country CCPs. The “EMIR 3.0” reform currently being negotiated in Brussels provides for further instruments to reduce existing dependencies. The future of derivatives clearing by EU institutions via UK CCPs is currently still unclear.
Brexit is already leaving its first traces in the British financial sector
London will remain an important global financial centre even after Brexit. The City is still one of the top three leading global financial centres (behind New York). However, competition from the Asian centres of Singapore, Hong Kong and Shanghai is becoming stronger. In Europe, London can build on its strengths: Language, geographical location, metropolitan area, financial expertise, global role of the law of England and Wales, attractive city. However, London’s importance for the EU is likely to continue to decline.
According to estimates, Brexit has already led to the relocation of around 7,500 jobs to the EU – and more are likely to follow. Dublin, Paris, Luxembourg, Frankfurt as a banking centre and Amsterdam in particular are benefiting from relocations. To a lesser extent, there are also new branches of EU institutions in the UK.
Brexit has also led to the relocation of financial assets totalling more than £1.3 trillion. With the completion of Brexit at the beginning of 2021, trading in European equities has largely left London and Amsterdam has become the most important European equity trading centre. Derivatives trading has also seen a significant migration of trading volumes from London to trading centres in the EU and the US.
Starting points for strengthening London as a financial centre post-Brexit:
Establishing London as a leading green financial centre.
Expanding the leading role in the FinTech sector.
Reviewing the domestic regulatory framework to ensure its attractiveness as a global financial centre.
At the same time, utilising the new freedoms of Brexit to better adapt regulation to the needs of the domestic market.
Financial diplomacy: Increased focus on growth markets, particularly in Asia, envisaged financial sector agreement with Switzerland and attempt to maintain British influence in international bodies.
By way of comparison, Germany is also pushing to establish itself as a sustainable financial centre and FinTech location, for example through the German financial centre initiatives (Berlin, Frankfurt, Hamburg, Munich, North Rhine-Westphalia and Stuttgart), as well as in Germany Finance, the working group of German financial centres.
Current development of the British economy
New trade barriers as a result of Brexit mean a high level of bureaucracy for exporters and importers, particularly due to customs declarations and accompanying documentation requirements. This is a particular burden for SMEs. Some are withdrawing from previous business with European partners.
Pandemic and energy price crisis overshadow the impact of Brexit. Economic development in the UK is roughly analogous to that in Germany. In other words, external factors such as the pandemic and the energy price crisis are dominating macroeconomic development (in DEU and GBR alike) and overshadowing the macroeconomic effects of Brexit. Gross domestic product also slumped significantly in the UK in 2020. The unemployment rate rose sharply in 2020/2021 and recovered in 2021/2022; it remains noticeably higher in the UK than in Germany.
Similar to the eurozone, the UK has recently been plagued by high inflation. As in the eurozone, the main drivers of inflation were disruptions to global supply chains, a sharp rise in energy prices, high private savings during the pandemic and pent-up demand for consumer goods. The situation on the labour market is tense and there is a shortage of skilled workers in many sectors. The sharp rise in inflation has prompted the Bank of England to make 14 interest rate hikes in succession between December 2021 and August 2023; at the last three meetings, the Bank of England left the base rate unchanged at 5.25 %.
However, inflation has been particularly stubborn in the UK so far. Core inflation and services inflation – as indicators of price pressure from the domestic economy – are well above the eurozone level. One important reason for this is friction on the British labour market:
The UK’s trade with the EU is suffering as a result of Brexit. Trade with Germany is also weak:
Trade with the UK has become less important for Germany. According to Destatis, the UK was still Germany’s fifth most important trading partner in goods trade in 2015 – in 2022, it was only in 11th place. However, Germany still has the third largest foreign trade surplus with the UK. However, the interpretation of the trade data is complicated by a number of special effects, including statistical ones.
Reduced trade intensity and weak corporate investment are weighing on growth potential:
Most studies assume that Brexit will reduce the UK economy’s production potential by around 3 to 5 % in the medium term compared to where it would be without Brexit. However, quantifying the effects is not easy, partly due to methodological breaks and overlapping factors. The investment ratio, which has been low for years, is also likely to affect the prospects for competitiveness and growth in the longer term.
Expectations of “interesting trade agreements” and expansion into new markets have tended to be disappointed. New agreements that did not already exist through EU membership were mainly concluded with Japan, Australia and New Zealand; the economic impetus is manageable. Negotiations with the USA have made little progress. Relations with China have not developed as hoped. Talks are being held with India. It remains to be seen to what extent this partially deindustrialised country will succeed in rebuilding its own production capacities.
Migration to the UK remains high even after Brexit. An increasing number of non-European immigrants are entering the country via a points system for skilled labour. In view of the tight labour market, fundamental change is difficult.
Conclusion of this analysis
The consequences of the pandemic and the energy price crisis have so far overshadowed the impact of Brexit on the British economy. The adjustment of value chains and the decline in foreign trade are likely to weaken productivity growth in the medium term. A constructive economic policy, including a targeted labour market and migration policy, is likely to become even more important. Although Brexit also offers the UK opportunities, it is currently not foreseeable that these will outweigh the benefits of EU membership. London’s importance as a global financial centre is diminishing for the EU.
In an article on 25 November 2023, the Frankfurter Allgemeine Zeitung (FAZ) saw “A divided relationship (of the UK) to globalisation. The UK’s policy is wavering between opening up and cutting itself off. Since Brexit, trade policy has only progressed in small steps.”
However, in the longer term and in view of the geopolitical challenges, there is an opportunity to revitalise economic relations between the EU and the UK on the basis of many shared values.
1Data source: World Bank data for 2022
2Exports measured in terms of gross domestic product (GDP). Sources: Office for Northern Statistics ans Destatis; Deutsche Bundesbank; 2019 before the effects of the pandemic and the implementation of Brexit.
3Contributions to gross value added in 2019. Sources: Office for National Statistics and Destatis.
4CCPs act as financial market infrastructures between the original counterparties of a financial market transaction and replace them. They assume the default risk and thus make a significant contribution to risk management and efficiency.
5On-shoring here: short-term transfer of regulations previously governed by EU law into UK law.
(PHOTO: Kick-off Event FINANZPLATZ DEUTSCHLAND-INITIATIVE of the Börsenzeitung on 13.09.2023 with Hubertus Väth, H.-Joachim Plessentin, Hans-Jürgen Walter, Markus Hill)
“FINANZPLATZ FRANKFURT: What challenges do you see for the Frankfurt financial center in the coming year?
Plessentin: Geopolitical developments and the economic and financial environment will continue to have an impact on Frankfurt as a financial center in 2024. Frankfurt is in competition with financial centers such as London and Paris. Strengthening the financial center and financing the sustainable, climate-neutral and digital transformation are of central importance.
FINANZPLATZ FRANKFURT: What did you take away from the Fin-Connect-NRW kick-off event on 18.12.2023?
Plessentin: The Fin-Connect-NRW financial center initiative will enter the scaling phase in 2024. The new office has presented a coherent concept for expanding the financial ecosystem and intensifying the concrete implementation of transformation processes and their financing. The new specialist working groups are also important for this process.
FINANZPLATZ FRANKFURT: Germany Finance: What impetus will be given to strengthen Germany as a financial center and transformation financing in 2024?
Plessentin: The role of spokesperson for Germany Finance, the working group of German financial centers, will rotate to Fin-Connect-NRW for one year from January. It is certainly planned that Germany Finance will commission a new study on transformation financing in 2024. The extent to which participation in international and national presentations is planned remains to be seen.
I wish my colleagues in the German financial center and the Group a good and successful 2024!”
Mr Hill, you supported and moderated the organization of the „Financial Center Frankfurt meets Financial Center Liechtenstein“ event in Frankfurt on 8 November 2023. What was the bridge to the topic of „Family Offices & Fund Boutiques“?
I was able to win Reiner Konrad from FOCAM AG in Frankfurt for a short presentation on the topic of „Family Offices, Fund Boutiques, and Manager Selection“. In Frankfurt, he gave a good overview of the importance of independent asset managers, asset allocation, and due diligence of the „hidden champions“. I suggested this topic because I thought it would be a good addition to the core topic of the event (private label funds & advantages of launching funds in Liechtenstein). The event of the „LAFV Liechtenstein Investment Fund Association“ provided a good framework for an intensive discussion on topics such as Liechtenstein as a fund location (David Gamper and Bruno Schranz, LAFV), the international role of Liechtenstein (Isabel Frommelt-Gottschald, Ambassador I.E.), regulation (Dr. Reto Degen, FMA – Financial Market Authority Liechtenstein) and asset management and private label funds (Ralph Früh).
I was also able to speak to some of the visitors to the event in Frankfurt afterward. One key point was repeatedly mentioned as feedback. Liechtenstein had presented itself as a very focused service provider, also for „small“ fund initiators (asset managers, asset managers, etc.), perhaps this could also be an approach for the fund industry there in 2024. I am neutral in my assessment of jurisdictions for the launch of funds, each location (Luxembourg, Germany, etc.) has its special advantages and its own „fan base“. I see a potential niche for Liechtenstein here, as many KVGs (Switzerland: „fund management company“) outside Liechtenstein are quite restrictive in their selection of potential fund partners as soon as funds do not promise the potential for high fund volume increases quickly right from the start. There is certainly an interesting segment of fund initiators that can be classified exactly between the very small and the very large fund volumes. Perhaps Liechtenstein can gain market share here over the next few years.
FOTO: Thomas Caduff & Markus Hill – „FINANZPLATZ SCHWEIZ trifft FINANZPLATZ LIECHTENSTEIN“ (Bild: www.fundplat.com)
You will be giving a keynote speech at the „Mountain Talks“ in St. Moritz on 12.01.2024 and moderating a roundtable on the topic of „Family Offices & Fund Boutiques“. What points could be of interest here, for example?
I often deal with the topics of fund selection and seed money search on a project basis. I often find it interesting from which directions fund managers are often viewed here. It is not possible to produce an ad-hoc study on such a small scale. I am currently exchanging ideas with a large number of family offices in advance to take another look at the relationships between these market participants. In addition to these results, some „theory pie chart studies“ may also be interesting, and perhaps I will also make some comments there.
The topics of communication (branding), financial education and networking, and the networking of players in the DACH region also seem interesting to me. During my „short survey“ in the run-up to the event, there may be one or two qualitative „thoughts“ that could perhaps provide a new perspective. Incidentally, I often see overlaps here in the assessment of liquid and non-liquid fund concepts. For example, I have already had ample opportunity to get to know a few alternative approaches to the communication behavior of family offices and fund boutiques at various other events in the DACH region this year in preparation for presentations. There are also overlaps because a „double hat“ is often worn. Multi-family offices, single-family offices, and independent asset managers, for example, act as selectors on the one hand, but many also have their products (private label funds) on the other. Many of the event formats in the family office sector also thrive on the fact that many of these addresses with a „double hat“ (for example: Multi-Family Office) are also looking for investors for their products or investments (co-investments, club deals, etc.). The difference to the many classic fund boutiques („non-selectors“) is perhaps that the classic family officer cannot „market their products“, as this does not necessarily fit in with the „trusted advisor“ theme. There is also a debate in the market as to whether a family office should offer its products at all. It’s an exciting field and I’m already looking forward to the discussion on site. To take a brief position here too: I think it’s fine for family offices to have skin-in-the-game with their products (investments etc.), if this positioning is transparent for clients, then this often seems to me to be a signal that certain family office concepts also express the fact that they have in-depth expertise in practice and can also provide real support for investments. It is often forgotten that this form of professional figurehead can also represent a risk: If the address does not deliver the desired results, then a shadow falls over the entire client relationship!
What topics are still on the agenda for you in 2024?
As mentioned above, I have worked intensively with liquid and non-liquid fund concepts over the years. For example, I had the opportunity to moderate two video discussion rounds with Telos and Artis ICM for premium sponsorships of the study „Preferences of institutional investors in real estate and alternative investments“. On the one hand, the results of the study were discussed, and on the other, there was an opportunity to discuss topics such as real estate and infrastructure investments in greater depth. The questionnaires for the current study will also be sent out to institutional investors shortly. The results are likely to be exciting against the backdrop of the significant changes in the interest rate landscape. It remains to be seen whether this year’s investor reluctance will turn into another „run“ on alternatives. (Input, ideas, and suggestions for „AIF & MORE“ are always welcome!) As an economist, topics from the infrastructure sector seem very interesting to me, with many fund concepts focusing on segments such as transportation, energy, and real estate. The focus is always on the eagle eye, and there is also an interface with topics such as „social issues“ and private debt (keyword: „Financial Center Frankfurt meets Private Markets 2024“). I also find these areas interesting from a journalistic point of view because these fund structures have to be communicated in a completely different way due to regulatory requirements, with topics such as branding and professional expertise taking center stage. Financial education and content count, not „primitive“ product promotion.
The topics of „fund selection“ and „seed money search“ will also be with me next year. It is interesting to note that many of the players in the start-ups, VC, and private equity segments can also always be linked to the topic of „family offices & fund boutiques“ – if you want to see these interfaces. I have always greatly appreciated the opportunity to exchange ideas with „real“ experts in this field. I have been involved in the liquid segment for many years due to several product research projects (manager selection, „reality check fund concept“ & investor dialog, etc.), in the non-liquid segment I am often more of a „humble learner“ – but with an increasingly steep learning curve. To pick up on the topic from above (Liechtenstein): the topic of „liquid versus non-liquid investments“ and fund launches also often comes up in these discussions.
Looking forward to the talks at the „FONDS professionell KONGRESS“ at the end of January 2024 in Mannheim and various other participants (presentations, moderations, media partnerships, etc.) in the DACH region. I will also continue to focus on the topic of „India“, hopefully, a small farewell party will also work out in February at the financial center in Frankfurt with an industry colleague I greatly appreciate, I would like to give a small speech in his honor, in combination with another topic. Here I have a location with a distant „India background“ in mind, so to speak „Financial Center Frankfurt says FAREWELL!“ in a small circle. I won’t lose sight of the topic of „Liechtenstein“ either; I still have an interview to do here. In connection with such activities, I would like to „optimize“ my activities on LinkedIn next year. Connecting the topic of the financial center (LinkedIn channels „Financial Center“: Frankfurt, Germany, Switzerland, Liechtenstein, Austria) always opens up new opportunities for me to exchange professional ideas. One new development in 2023, for example, was the activation of a „Financial Center Frankfurt am Main Group“; by the end of January, we should have exceeded the 1,000-follower mark. The group is a good addition to the Finanzplatz Frankfurt am Main channel (community, target for the end of January 2024: 7,500 followers). I think that the next year offers a good opportunity to network with the various financial centers in the DACH region more closely via LinkedIn. Thank you for your support in 2023, by the way!
Markus Hill has been an independent asset management consultant since mid-2005. His professional background includes companies such as SEB Bank (marketing/product management, investment banking) and Credit Suisse Asset Management (sales, asset management). His areas of activity include the management of mandates in marketing, PR, and fund selection. As former Head of Sales of mutual funds at an investment boutique (equities and bonds) and in external cooperation with a fund of funds manager, his focus is on small to medium-sized asset management companies. In addition, his journalistic work focuses on the topics of fund boutiques (fondsboutiquen.de) and the use of mutual funds by institutional investors as well as the selection of target funds in multi-management approaches. He is also interested in the financial center Frankfurt as a place for the exchange of ideas (finanzplatz-frankfurt-main.de).
„One should be absolutely wary of predictions, especially those about the future“ (Mark Twain). Markus Hill spoke on behalf of FONDSBOUTIQUEN.DE with Michael Heise, publicist and chief economist of HQ Trust, about the connection between the fields of economics and family office as well as the challenges for investors in the current interest rate environment. Topics addressed included the ECB, interest rate policy, inflation and the implications for capital market returns. These topics, as well as the topic of alternative investments, will also be the focus of discussion this week at the Private Wealth Forum Germany and the Private Debt Investment Forum in Munich.
Hill: As an economist, where do you actually see the connection to the topic of „Family Office & Asset Allocation“?
Heise: Advising families on how to secure and increase their assets is an extremely exciting task. In my view, it is closely linked to global economic developments, which play a major role in determining long-term trends on the financial markets. In this respect, a passion for economics is a good prerequisite for advising family offices. For economists working in the financial business, which has been the case for me since 1995, the special challenge is not only to present academically interesting analyses, but also to generate instructions for action for investors. And they are, as you know, subject to the merciless judgment of the markets. That’s what makes the work so exciting.
Hill: Why do you think the ECB has been so late in responding to inflation?
Heise: The sudden rise in inflation in recent years has surprised the vast majority of forecasters in its rapidity. However, this is no excuse for the central banks. The European Central Bank, in particular, held on to the thesis that the rise in inflation was only temporary for far too long, so it took countermeasures very late. The ECB’s first interest rate hike took place in July 2022, when inflation had already reached almost 9%. How did this late reaction come about? Of course, it can be argued that our forecasting models do not work so well in times of massive shocks such as the COVID pandemic and the Ukraine war. More importantly, the European Central Bank had just revised its strategy in 2021 and a very expansionary policy stance emerged. As late as the end of 2021, the ECB announced a long period of low key interest rates as part of its so-called forward guidance, thus shaping market expectations. This assurance then prevented it from raising interest rates in a timely manner. In doing so, it would have undermined its own announcements.
Michael Heise, Chief Economist, HQ Trust GmbH
Hill: What’s next for inflation and the ECB’s key interest rate?
Heise: In my estimation, the ECB’s key interest rates will remain at the level they are at now until early summer 2024. In view of the weak economy in the euro zone and the fact that inflation figures are falling, the ECB is unlikely to tighten monetary policy further for the time being. Of course, the decisive factor is the development of inflation. Significantly rising commodity prices or aggressive wage increases could change the picture.
Hill: What are the implications for capital market yields?
Heise: With the current direction of monetary policy, capital market yields are likely to move more or less sideways at current levels. Significant interest rate cuts by the central banks would only be expected in the event of a stronger recession, which most forecasters do not currently see coming. So I don’t think you should position yourself for falling interest rates.
Hill: We had a preliminary discussion about our panel at the Private Wealth Germany Forum in Munich. What other topics are important to you there?
Heise: It will certainly be a very interesting panel. I’m particularly looking forward to discussing different scenarios. What is the likelihood of a recession, a severe economic downturn? A recession scenario would have very different capital market implications. I assume that opinions differ here.
Hill: What additional issues are you currently facing?
Heise: This week is all about alternative investments. On October 18, I will be giving a keynote at the Private Debt Investment Forum 2023 here in Munich. Private debt investments have developed very strongly recently and have attracted high demand. However, they are also affected by macroeconomic developments and risks. There’s a lot to discuss there.
Hill: Thank you very much for talking to us.
Michael Heise has been an independent consultant and publicist since 2020, as well as chief economist of the asset manager HQ Trust GmbH in Bad Homburg. He studied economics at the University of Cologne and earned his doctorate. His professional career led him via the German Council of Economic Experts (Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung) and the positions of Chief Economist at DG Bank and DZ Bank to the Allianz Group in Munich. Heise is an honorary professor at Goethe University in Frankfurt.
PRIVATE WEALTH GERMANY MUNICH FORUM (MUNICH, 17.10.2083):
PRIVATE WEALTH, FAMILY OFFICES, ECONOMICS & Finanzplatz Deutschland (München, 17.10.2023) – „Panel Discussion: Fixed Income: Rising Trends Shaping Today’s Landscape Inflation is at its highest rate in four decades. Central Banks may continue to raise rates. Given this precarious moment in time, investors are left wondering if the 60/40 portfolio is still viable, in light of correlations between stocks and bonds. This panel will aim to answer such key questions as: • How much higher will the ECB raise rates and how quickly could they cut rates? • How will the ECB reduce its balance sheet and for how long? • How is liquidity in the bond market and what is the impact on fixed income portfolios? • Could this be a year with bonds and stocks up? How does that affect investing behavior of clients? Moderator: Markus Hill, Managing Director, MH Services – Panelists: Martin Friedrich, Head of Economic & Market Research, Lansdowne Partners Austria – Michael Heise, Chief Economist, HQ Trust – Timur Shaymardanov, Senior Product Specialist -Xtrackers Index Strategy & Analytics , Xtrackers by DWS – Dr. Wolfgang Bauer, CFA, CAIA, Fund Manager, M&G Investments
The 6th Annual Private Wealth Germany Forum is the region’s leading conference for family offices, high net worth wealth managers and private banks from throughout the region and one of the flagship meetings of our global private wealth series. The forum’s content was developed through hundreds of one-on-one meetings with the HNW family wealth management community and the program’s speaker faculty is primarily comprised of leaders in the sector from across Germany.“ (QUOTE – Markets Group – www.marketsgroup.orgVanessa Orlarey)
PRIVATE DEBT INVESTOR GERMANY FORUM (MUNICH, 18.10.2023):
“09:00 Keynote: Economist
Factors influencing credit macro conditions.
Dr. Michael Heise, Chief Economist, HQ Trust/ Macroadvisors”
“On 17-18 October in Munich, the Private Debt Investor Germany Forum will connect the most influential asset allocators and funds from the DACH region and beyond. Over 60 institutional and private investors will come together to meet private debt fund managers and the wider market to learn about the latest trends, explore investment opportunities and decide where to allocate their capital. Attendees will hear from over 70 speakers across the forum and have many opportunities to connect with active investors in Germany, Austria, and Switzerland. Join your peers at the Germany Forum for an unmissable two days of content and networking in the region.
