Substance in the spotlight

Welcome to the 2020 edition of the KPMG Luxembourg Substance Survey. During this tumultuous year, substance is still firmly in the spotlight as questions continue to swirl.

In this third edition we break down how substance trends have evolved over the past twelve months. From the increase in the number of entities to the massive recruitment of highly qualified professionals, we examine the reasons why asset managers show a growing confidence in their substance arrangements. We would like to express our gratitude to the 60 asset manager participants, who boast a combined total of €500 billion in assets under management in Luxembourg. Thanks to them, our results paint a clear picture of asset managers of all sizes, from mega fund houses to boutique firms. 

Survey participants



Survey respondents



assets under management in Luxembourg



Luxembourg investment funds



Luxembourg-regulated AIFMS



Luxembourg Entities



full-time equivalents

More entities and staff than ever

Since the last survey, asset managers have increased both team size and number of entities managed. Team size has grown 17% over the past year while the number of entities is up by 6%.  This growth in team size is impressive, but it’s not going to stop there. The majority of firms – 65% - say they plan to continue to hire in the next six months. 



Average increase in FTE



Average increase in Managed Entities

Massive recruitment of highly qualified professionals

As Luxembourg continues to make a name for itself, let’s take a look at just who exactly is making their way to the Grand Duchy. The below chart shows how the composition of asset management teams has evolved since 2019. There is a significant increase in the number of AIFM conducting officers, asset and portfolio managers, and administrative assistants working for our participants.

Evolution in composition of teams in 2020

Percentage increase or decrease by job title

Increase in the number of regulated AIFMs

Between 2019 and 2020 the percentage of asset managers with a regulated Luxembourg AIFM license increased from 32% to 58%. This confirms the trend observed in the 2019 edition wherein participants stated their intention to set-up a Luxembourg-regulated AIFM.

Evolution in number of AIFMs in 2020

Percentage increase

Luxembourg regulated AIFMs are more popular with real estate, infrastructure and multi-asset managers than with pure private equity and debt asset managers. While this was already true in 2019, the gap between these fund types has widened since 2019.

Evolution in number of AIFMs by type in 2020

Percentage increase by AIFM type

Increasing confidence in substance levels

Luxembourg asset managers gained significant confidence in their level of substance. This rise is due to the increase in the number of regulated AIFMs, and the rise in the number of highly qualified professionals working for funds in Luxembourg.

Evolution in confidence levels regarding substance in 2020

Percentage of managers that judge their substance levels as good or more than good

Get more survey insights

Get in touch ›