D. Lombard (Lombard International Assurance): “Unregistered assets are a complex asset class that is difficult to understand”

Decision makers. What criteria are relevant when choosing the distribution of life insurance assets in Luxembourg?

Estelle Dolla. In my opinion, this is a combination of three factors: the desired degree of diversification, the requirements for the quality of the underlying assets and the client’s needs in terms of consulting and asset engineering. On this basis, the financial advisor will determine whether life insurance in Luxembourg is an appropriate asset decision.

David Liebman. We could add a fourth point: adequacy. From the point of view of asset allocation through Luxembourg life insurance, it is certainly interesting to emphasize the quality of the underlying assets, but it is still necessary to have a proposal that meets the different needs and profiles of clients. In this sense, in addition to the existing offer, the service is important.

What are the benefits for an individual to choose Luxembourg life insurance to invest in private equity?

ed The huge selection of different types of substrates available provides some flexibility and, finally, the possibility of building a truly diversified distribution. The deferral of taxation offered by Luxembourg’s life insurance gives it an advantage over direct investment, as the increase in capital from disposal can be capitalized within the insurance package with the possibility of reinvestment during the deferral of taxation.

A wide selection of different types of underlying assets makes it possible to build a truly diversified distribution “

DL Luxembourg’s life insurance policy offers the widest investment world in Europe, including non-traditional asset classes such as direct equity. Today, 14% of our assets under management in Europe are invested in these asset classes, and this figure is constantly growing. Thanks to our 1000 partner managers, we provide access to a very wide selection of assets. In this way, the consultant has the opportunity to build with his client a real individual and diversified asset placement based on the various available units of account, such as the Specialized Internal Fund (FID) or the Specialized Insurance Fund (FAS). Private equity is gaining momentum in the distribution of funds, which is facilitated by new intermediaries in the market, such as Private Corner, who themselves add value to these products. The ecosystem is becoming much more orderly and open.

What types of clients do we address?

DL Even if private investment has been widely democratized over the past fifteen years, it remains an asset class reserved for well-informed investors or those with well-established and diversified financial legacies. Luxembourg insurers have also worked hard to democratize this access by facilitating contractual and administrative aspects. At Lombard International Assurance, we do not offer funds in euros, and our Luxembourg contracts are 100% pegged to units. We now see that the market context is increasing the demand of customers to include private capital in their distribution in order to make more profit. The profitability / risk slider has clearly shifted towards greater risk within the distribution. What was only a research asset class ten years ago is now the norm for any diversified asset allocation, along with more traditional asset classes such as stocks or bonds.

How specifically to invest through life insurance in Luxembourg? Who decides? Do I need to meet any specific conditions for access to certain asset classes?

DL Under the Luxembourg life insurance contract, the investment decision-maker may be one or more management companies selected by the client and then authorized by the insurer under discretionary management, always according to the subscriber’s risk profile. This can also be done by an investment adviser or even the subscriber himself as part of a free or advisory management. We have maximum flexibility, and our role is more of a qualifier than a selector, where the role of Private Corner is to find the best opportunities on the market and structure them in a way that facilitates access.

Our goal was to provide easy access to funds, which usually have a ticket of several million euros.

ed Our goal was to provide easy access to funds, which usually have an entrance ticket of several million euros and are therefore not available to most private investors. So we combine the subscriptions of several private investors inside the car ad hoc (food fund), which will invest in the main fund (s). In addition to the experience of due diligence To select the best management teams and streamline the minimum investment ticket, we have developed a digital platform to offer our customers and partners an optimized subscription experience, full transparency in reporting, and simplified access to our offer at any time.

How to manage the demands for funds and liquidity inherent in private capital in the framework of life insurance in Luxembourg?

DL Investing, managing, administering and disposing of unlisted assets requires special experience. We are the only insurance company in Europe with a dedicated team of fourteen people who invest and monitor positions and sell items if necessary. Calls for funds are inherent in private capital and require special experience and monitoring. As an investor on behalf of our clients, we take on this responsibility. To this end, we work, in particular, with custodian banks, where positions are registered, as well as with investment teams, with whom we have long-term relationships.

What trends do you see as a Luxembourg insurer? And as an investment platform?

DL Today we talk a lot about private capital, real assets – as if this is becoming a form of proof. But keep in mind that this remains a complex and sometimes complex asset class to understand. Increasing the number of players and available strategies makes it difficult for investors to choose, implement and monitor their investments independently. This requires the help of professionals who will have the necessary knowledge to perform due diligence and take responsibility gatekeeper.

ed Growing interest in unregistered stocks persists, but there is still a great deal of opacity in some investment proposals. Therefore, we emphasized the transparency, quality and efficiency of the service, as well as long-term support. This allows us to partner in tripartite logic with the insurer and advisor to act as best we can for the benefit of the end customer and distributor.

Interview with Marin Fleury