We are excited to release the fifth edition of the Luxembourg Alternative Investments Substance Survey. Whilst our sample covers more than 50 players this year, 32 asset managers took part in both the 2022 and 2023 editions of the survey (the “Selected Sample”). Our publication focuses on how this particular sample evolved over the past 12 months, what conclusions may be drawn and what market trends can be observed. We would like to thank all the participants and are already looking forward to the next edition of the survey!

At a glance

Last year, the Luxembourg alternative investments industry witnessed dual transformations in the sector:

  • Consolidation

    The increase was primarily driven by the number of Luxembourg fund vehicles being used but no longer supported by an increase in the number of new Luxembourg AIFM licenses.

  • Sophistication

    The rise of this trend was largely attributed to the growing weight of AIFM and transaction-support functions performed in Luxembourg.

We note that the 2022 observations above are still very much relevant for 2023, but to a different extent. Similarly, to last year, the industry is still on the edge of a potential disruptive change: ATAD 3 was not released in 2022 due to the lack of consensus amongst EU Member States.

Players are therefore still waiting to see what the final provisions will be and when it will be introduced. If EU Member States opt for a strict position with limited carve-outs, the question arises: Would asset managers have to upgrade their business models in Luxembourg?

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Our respondants in numbers

Participants in both the 2022 and 2023 editions

Participants in the 2023 edition

  • 3251


  • 1953

    Have an in-house Luxembourg AIFM license

  • 2475

    Have Luxembourg AIFs

  • 34004750+


  • 600900+


Growth is still organic, but on a smaller scale

The June 2023 figures published by the CSSF show that the number of Authorized Investment Fund Managers (including AIFMs) decreased by 1.5% in comparison with last year. This confirms the consolidation phase of the market we also observed ourselves last year for our Selected Sample - the rally to obtain an in-house AIFM license in Luxembourg is generally over (although there are still new entrants applying for an AIFM license).

That being said, the density of the Luxembourg platform managed by the Selected Sample grew further, but at a slower rate than in 2022.

Extrapolating from the Selected Sample, we now consider that Luxembourg platforms are generally well-established and their operating models are reaching a level of maturity. This suggests that the above-mentioned marginal growth could be explained by an increase of the AuM managed in Luxembourg, some incremental regulatory needs, or specific substantial improvements.

2022 to 2023 Evolution: SPVs

Average number of Luxembourg SPVs

2022 to 2023 Evolution: FTE

Average size of Luxembourg staff, in FTE

2022 to 2023 Evolution: Office space

Average size of Luxembourg office, in sqm

It is worth noting that hiring intentions are significantly decreasing, with only 47% of the Selected Sample intending to hire in the next six months compared to 72% in 2022. Within the group of asset managers expressing hiring intentions, the average number of open positions decreased compared to the previous year.

2022 to 2023 Evolution: Hiring intentions

Many respondents stated that they are in the process of closing a hiring phase and do not plan to hire more in the following six months.

AIFMs widen the gap with unregulated asset managers

As shown below, players with an in-house AIFM in Luxembourg expressed more confidence regarding the sustainability of their models from a tax perspective compared to non-AIFM players.

Whilst they have more tangible resources, they can also leverage on their regulatory substance (e.g., highly skilled and experienced conducting officers) and processes, a continuation of the 2022 survey.

Luxembourg platforms with dedicated AIFMs

  • 155

    Average number of SPVs

  • 29

    Average number of FTEs

  • 4.3/5

    Substance self-assessment

Luxembourg platforms without dedicated AIFMs

  • 58

    Average number of SPVs

  • 9

    Average number of FTEs

  • 3.8/5

    Substance self-assessment

A focus on directorship from an ATAD 3-readiness perspective

Despite the lack of clarity on the content of ATAD 3, it might be that directorship considerations (location, qualification and skills, associated status and potentially the number of mandates of directors) remain a critical requirement of the final provisions.

We therefore asked the participants what their typical board of directors composition is at various levels within a given generic Luxembourg investment structure.

In general, we observed that asset managers are massively relying on their own in-house directors for their decision-making processes. Additionally, most directors are Luxembourg residents, at least for professional purposes. Considering what is happening in major investment jurisdictions regarding substance requirements, this is good news.

An essential factor to take into account is that 45% of the parties involved with an AIFM are leveraging their conducting officers as directors for the Luxembourg-based entities within the investment structure. In these cases, leveraging would occur at the Master LuxCo level. 43% of asset managers with an AIFM use this board composition practice at this level; however, this practice is only used by 30% of the respondents at the cross-border LuxCo level.

Finally, our Selected Sample typically avoids utilizing directors employed by third parties like asset servicers (we see this with usually with smaller players, which could raise future concerns). The preference of using independent directors is still very much favored by industry participants. The reasons are generally very much business oriented (e.g., need for external experience, independent views, local or specific knowledge, etc.) as we see in the corporate realm. It remains to be seen how this dynamic will be addressed within the context of ATAD 3.


As described above, the Luxembourg consolidation and sophistication trends persist even though they have moderated from previous levels. Luxembourg platforms are maturing and are more equipped to tackle substance considerations compared to the past.

While many industry participants foresaw specific enhanced local substance requirements and proactively implemented appropriate governance, there is still a collective pause in anticipating the final provisions of ATAD 3 before making any additional moves.

We noted that the participants are well aware in this respect, and we are under the impression that most asset managers possess the ability to adapt themselves to the new rules given their current sophistication. This is again subject to the player in question and the final shape of ATAD 3.

Upon the release of the regulations, our recommended course of action for players (if not yet undertaken) will be to immediately identify any existing gaps, determine specific actionable steps or upgrades, and define a plan that takes into account the implementation date of ATAD 3.

Even if players are not careful enough, we still anticipate an increase in investor scrutiny on this topic when the implementation date of the ATAD 3 is established, likely making this a major component in their investor questionnaires.

If you would like to learn more, get in touch.

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Meet the team

Christophe Diricks

Christophe Diricks

Partner, Head of Alternative Investments
KPMG Luxembourg

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Benjamin Toussaint

Benjamin Toussaint

Tax Partner, Alternative Investments
KPMG Luxembourg

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