The dynamism within the Luxembourgish Management Company (ManCo) market and the drive for process optimization has shaped the ManCo landscape during the past years. The pandemic and the resulting transformation of the way we work has further fueled the need for ManCos to review and benchmark their operations against the market.

While the management of regulatory risk exposure remains paramount for ManCos in the market, the focus of C-level discussions has shifted in the last 12-24 months from pure regulatory compliance topics to the development of lean ManCo processes that are fit for future challenges.

The second edition of the KPMG Large-Scale ManCo Survey takes a closer look at the driving forces and key strategic priorities of the largest Management Companies in Luxembourg to paint a clear picture of how ManCos navigate the challenge to implement lean operating models. 

Welcome to the KPMG Luxembourg’s Large-Scale Management Company Survey 2022

More than 50 percent of assets under management in Luxembourg are held by the 20 largest ManCos in Luxembourg, representing a small fraction of the more than 300 total ManCos (UCITS and/or AIFM) in Luxembourg. These “large-scale ManCos” understandably play an important role in influencing product innovation and the digitalization of the market.

We would like to thank the 20 ManCos that shared the features of their business models, as well as their key strategic priorities, for the years to come.

A message from our asset management risk and regulatory leader

The consolidation of the Asset Management market as well as the pertinent fee pressures force ManCos to continuously refine and adapt their operating model to strike balance between regulatory compliance and operational effectiveness, all while avoiding over-engineering.

Our conversations with the largest Management Companies in Luxembourg crystalized three overarching themes of operating model transformation:

  1. The regulatory scrutiny enforced by the CSSF continues to increase and raises ManCo governance arrangements as well as resources in core substance functions on the ground.
  2. The evolution – and for some ManCos revolution –of the ManCo operating model is multi-factorial, influenced by growth in Alternative Investment strategies, product innovation, integration of ESG principles into day-to-day operations and the review of delegation strategy.
  3. ManCos increasingly embrace the importance of lean processes and operations to preserve their competitive advantage and to unlock economies of scale. As such, the Luxembourgish market is increasingly developing into a Center of Excellence for risk management, compliance and oversight professionals.

— Alan Picone, Asset Management Consulting Leader, KPMG Luxembourg

Alan Picone

Survey participants


18 of the largest 20 ManCos in Luxembourg


Employing more than 1,300 FTEs


20 ManCo participants


More than 3,400 managed sub-funds


More than EUR 2,800 billion of total AuM


Representing 50 % of the Luxembourgish market

In the results of this survey, we’ve outlined the central forces shaping the Luxembourgish asset management market.

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Evolution of substance in Luxembourg, growth across all functions

Growing regulatory scrutiny on governance arrangements and local substance by the CSSF (CSSF Circular 18/698), as well as an increase in business volumes and complexities of ManCo operations, have increased the demand for Asset Management professionals. In this context, our survey reveals that, on average, ManCos have increased the number of full-time-equivalents (FTEs) by 14% compared to last year.

While FTEs in all functions across the ManCo value chain are increasing, there is a particular demand for experienced professionals in core substance functions (risk management, AML/Compliance and delegation oversight). This trend underlies the evolution of Luxembourg into a “hub of excellence” for risk, regulatory and compliance professionals.


+ 14 % Average increase in FTE


+ 19 % Increase in FTE among core substance functions (risk management, compliance, oversight)


+ 9 % Increase in FTE among operations functions (portfolio management, client/product management)


+ 14 % Increase in FTE among support functions (legal, finance, IT, etc.)

Increasing CSSF scrutiny – prepared for your next inspection?

Driven by the increasing pressure of the European Securities and Markets Authority (ESMA), the CSSF has greatly expanded its on-site inspection program in recent years.

75% of all ManCos participating to our survey had at least one CSSF on-site inspection in the last three years, either general inspections or thematic inspections (e.g. on AML, risk management or IT security). Additionally, an increasing number of ad-hoc requests by the CSSF through questionnaires and market studies further highlight the importance of robust regulatory risk mitigation programs. In that sense, the on-site inspection formula should start to be rephrased; it is not a question of if it comes, only when…

Interestingly, our survey revealed a paradox between the increasing regulatory scrutiny and the level of preparedness of ManCos. While regulatory scrutiny is at an all-time high, only every other ManCo feels well prepared for an upcoming regulatory on-site inspection.

ESG - a key cornerstone in ManCo operating models

A remarkable 75% of the ManCos participating in our survey responded that ESG represents a key cornerstone of the enterprise-wide value proposition and is likely to become an integral element to business strategy in the coming years.

Already today, almost half of all funds managed by ManCos in our survey are either classified as Article 8 or Article 9 per the SFDR, and a large majority of ManCos expressed the ambition to significantly increase their percentage of funds that promote environmental and social characteristics over the next months and years to come.


45 % of managed funds are classified as either Article 8 or 9

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ManCo operating model review – frequently considered in C-level discussions

While the management of regulatory risk exposure remains paramount for ManCos in the market, the focus of C-level discussions shifted in the last 12-24 months from pure regulatory compliance topics to developing lean ManCo processes that are fit for future challenges.

The ManCo market is revealing a quest for lean, scalability-driven operating models that allow ManCos to remain competitive amid a noticeable increase in business complexity. In discussion on their strategic priorities, 70% of all ManCos surveyed highlighted that the transformation of the current operating model as their key priority.

While the management of regulatory risk exposure remains paramount for ManCos in the market, our survey revealed that it is no longer the most immediate strategic concern for the large majority of ManCos.

ManCo Strategy Priorities

Technology to scale delegate oversight is here to stay!

The adoption of technology is a major driver in achieving scalability of ManCo operations. Technology is especially valuable for the oversight of delegated services.

Most notably, we recorded a significant increase in the use of technology assistance for the oversight of distributors. Precisely, 18 of 20 ManCos participating in our survey have implemented technology solutions to reduce the manual workload for distributor oversight.

However, while technology for distributor oversight has been adopted systematically across the ManCos, the oversight of other functions (e.g. portfolio management, fund administration) is still primarily performed manually; according to our survey, only 30% of ManCos use tools to oversee delegates for functions beyond distribution.

Delegation – the centerpiece of the Luxembourgish business model

Although a handful of ManCos participating in our survey are considering insourcing ManCo operations to further strengthen the Luxembourgish footprint, delegation remains the centerpiece of the Luxembourgish ManCo business model.

While the majority of ManCos typically delegate operations functions (portfolio management, central admin, transfer agent) to group hubs for scalability, the decision to insource or outsource support functions (legal, corporate secretary, IT, etc.) is often based on the specific local arrangements and role of the ManCo within the group context.

Wondering how these results compare to the first edition of this survey? Read our 2021 Large-Scale ManCo Survey

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