The Association of the Luxembourg Fund Industry (ALFI) found that the number of funds rose by 4.84% to 3,833 last year, while net sales amounted to almost €17bn ($22bn).
Total assets under management fell by €101bn, “mainly as a result of market depreciation”, it added, but remained above €2trn, making Luxembourg approximately four times bigger than the UK with £550bn in assets under management and second only to the US.
The figure also keeps Luxembourg well ahead of European rival Dublin which, recently boasted that its fund assets had surpassed €1trn for the first time.
However, regulatory pressures are likely to prove a challenge in 2012, ALFI said. It highlighted the Volcker Rule, a proposal within the Dodd-Frank Act that will restrict US banks, or banks active in the US, from making certain speculative investments, as particularly worrisome.
While US funds are not caught by the rule, there is no similar exclusion for non-US regulated funds such as Ucits, it warned.
“At the minimum, we believe the definition of the funds affected (“covered funds”) in the final rules should be amended to exclude European regulated funds in the same way as their US counterparts,” read a statement from Marc Saluzzi, the chairman of ALFI.
In addition, the association pointed to concerns over the proposed European Financial Transaction Tax, which it said would “[give] rise to multiple taxation at the level of the fund, its portfolio and its investors”, thereby negatively affecting the distribution of Ucits outside Europe.
