News - 13.09.2024

Focus On Cross-Border Investments

  • Investment Structuring

To fully support the growth of the real economy in a globalised world, the financial sector must be able to direct investment flows to the areas where they can best contribute to economic development and growth.

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Our recent “Focus On” shed light on the topic of cross-border investment, featuring insights from Luxembourg-based experts and international specialists who offered valuable perspectives on European regulation. Catherine Pogorzelski, Partner at DLA Piper Luxembourg, highlighted the crucial role of cross-border investment but also noted the “great complexity one must navigate given different regulations and tax systems across jurisdictions.”

Jillien Flores, Head of Global Government Affairs at the Managed Fund Association (MFA), indicated that Europe should ease the rules in several sectors, particularly in the regulatory framework for securitisation. “The current framework is complicated and poses a barrier to making it a diversification tool that could attract both EU and non-EU investors.”

From the American perspective, European legislation, while sometimes strict and complex, is also seen as a factor of stability and trust. Frank Van Kuijk, partner and Co-Head of the New York office of Loyens & Loeff, confirmed that American private investment players prefer Europe over offshore jurisdictions “because this set of rules provides confidence to investors, and the available structures, such as Luxembourg’s special limited partnership, are familiar to them.” He also noted that they can benefit from the European passporting system.

Finally, Marcus Peter, Partner at GSK Stockmann, and Robert White, Partner at EY Luxembourg, noted a renewed interest in merger and acquisition (M&A) activity across Europe. “The market is generally on the rise, but not as much as anticipated, with key sectors being technology and energy. I expect a more robust growth in the second half of the year,” Peter commented. Both specialists explained that Luxembourg is often the jurisdiction of choice for investors looking to set up structures in Europe for M&A deals. The reasons for this include political stability, the simplicity of corporate law, and the ease with which funds can move between parties.

View the full replay here.