Focus on Private Assets

Year after year, Private Assets are winning over a growing investor base. To explore the drivers behind this momentum, two specialists from Banque de Luxembourg share their views: Vincent Willem, Deputy Head of Asset Servicing, and Virginie Loisel, Head of Funds & Institutional Clients Relationship Management.

This article is an extract from Paperjam's Grand Dossier on Private Equity from October 2025

An asset class on the rise

Private Assets cover a wide range of illiquid investments – from Private Equity, which channels capital into unlisted companies at different stages of development, to real estate, microfinance and beyond.

The real economy offers investment opportunities that are more tangible than a ‘traditional’ investment fund, whether through direct investment or indirect structures such as funds-of-funds and private debt. For companies, Private Assets provide simplified access to capital, a key reason for their popularity and the push towards greater democratisation in recent years.

This sector has seen a remarkable surge, fuelled by the appetite of investors seeking higher returns amid low interest rates and uncertainty on traditional listed markets. Rising allocations to innovative sectors such as technology and healthcare, coupled with the emergence of global mega-funds able to mobilise tens of billions of dollars, have further accelerated the trend.

Viewed as an asset class offering both superior returns and attractive diversification, Private Assets are playing a key role in supporting the real economy and creating opportunities for companies and investors alike. Increasingly affordable entry tickets to this type of fund have attracted high-net-worth individuals, although the segment remains largely professional – with around 95% of investors still institutions. A true ‘retailisation’ of Private Assets is yet to come, but performance has been a clear driver of their attractiveness.

Europe in the spotlight

In recent years, Europe has become a focus for institutional and private investors seeking greater diversification and yield, with real estate – both residential and commercial – offering huge opportunities for growth.

We are seeing real momentum among fund initiators who are increasingly turning to Luxembourg as a launchpad, notably for ELTIFs (European Long-Term Investment Funds). Today, over 65% of ELTIFs created in Europe are domiciled in the Grand Duchy, consolidating its position as the leading European hub for such vehicles.

Private debt and the democratisation of access to Private Assets are also progressing, supported by regulation that opens the market to a wider investor base, including private investors. This reinforces Luxembourg’s indomitable role as a global leader in fund distribution. “The country’s political and economic stability, together with government measures to boost our attractiveness, continue to draw and retain investors from across the globe, who are wary of geopolitical and domestic turbulence,” notes Vincent Willem.

Capital is being directed into key long-term themes such as technology, AI and digital innovation, healthcare and biotech, infrastructure (energy, data centres, transport), and the energy transition (decarbonisation, green and blue energy). In addition, shifting dynamics in the US and European tariff policies are expected to strengthen Europe’s role as a safe haven, driving reallocations towards more robust, flexible and ESG-driven strategies. The future of the sector will be marked by the proliferation of multi-strategy vehicles with systematic integration of ESG indicators and the active search for returns in a more volatile macroeconomic environment.

Navigating regulation

Luxembourg’s regulatory landscape has tightened significantly over the past decade, impacting Private Assets as well. While the framework is designed to safeguard the instruments, strengthen distribution and protect investors, overregulation risks undermining the market’s attractiveness and performance. Striking the right balance can be challenging. Between the (often unfairly) highly risky image of Private Assets and their attractiveness, there is a fine line to tread.

Recent moves by the government and the regulator on digital infrastructure and simplified procedures are encouraging signals for the sector.

“Banque de Luxembourg’s multidisciplinary expertise and stable teams have established the bank as a leading player in the Asset Servicing sphere, particularly in Private Assets,” says Vincent Willem.

A sophisticated toolbox

Thanks to high returns and sustained growth, Private Asset funds have long relied on advanced tools to optimise efficiency and timing. By narrowing the gap between investment decisions and capital calls, these tools enhance overall portfolio performance.

Real-time monitoring of commitments, updated performance tracking, and more agile decision-making allow funds to better adapt to market shifts. Against this backdrop, demand has also grown for financing solutions tailored to specific needs. Equity bridge financing in the form of capital call facilities has become a value-added product Banque de Luxembourg offers to support clients.

“It also represents a commitment to flexibility: when an opportunity arises, clients can seize it immediately,” adds Virginie Loisel.

A leading player

“The multidisciplinary expertise and stability of its teams have made Banque de Luxembourg a leading player in Asset Servicing in the Luxembourg financial centre, particularly in Private Assets,” confirms Vincent Willem. Backed by Crédit Mutuel – a non-listed group with a long-term vision – Banque de Luxembourg has been active in private markets for more than 30 years, its experience being of direct benefit to clients and Private Asset funds.

Private markets more broadly represent both a growth driver and a strategic development priority for the bank’s Asset Servicing business.

On the client side, satisfaction levels are consistently high. “A client-centric approach is embedded in the Bank’s DNA,” stresses Virginie Loisel. The Bank’s Relationship Managers’ expertise and experience ensure a deep understanding of initiators’ needs, enabling them to tailored support and solutions aligned with their clients’ objectives.