For decades, asset management has hinged on two factors: the quality of products and the ability to distribute them. The former remains essential. The latter is undergoing a major transformation.

Fund distribution in continental Europe is still handled by banks, but asset management firms are keen to develop their own distribution capabilities. Behind this desire to build closer ties with end investors lies a shift in the asset management model, in which data management is becoming increasingly important.

“Investor data is gradually establishing itself as one of the most strategic assets in asset management,” says Christophe Saint-Mard, global fund distribution leader at PwC Luxembourg.

Whereas fund managers used to set themselves apart through the performance of their funds or their capacity for innovation, they now seek to gain a better understanding of their investors’ behaviour in order to refine their business strategies, tailor their offerings and anticipate changes in demand.

Is this the end of intermediaries? Not so fast…

This trend might suggest that asset management firms are seeking to do without traditional distributors. However, industry players largely qualify this interpretation.

For Christelle Reichart, head of product development at Caceis, the industry is not moving towards disintermediation but towards ‘re-intermediation’. Banks remain the main points of access for investors, whilst new players – distribution platforms, technology providers and data-driven transfer agents – are playing an increasingly significant role in the value chain.

PwC agrees with this analysis. “The market is not becoming disintermediated: it is being re-intermediated. That is exactly what we are seeing today,” emphasises Christophe Saint-Mard. Traditional intermediaries are not disappearing; they are being complemented by new specialists capable of integrating data, technology and regulatory constraints in order to simplify an ecosystem that has become much more complex.

In this context, distribution is no longer simply a matter of providing access to a financial product. It has become a process of coordination between investors, platforms, regulations and technological infrastructure.

From distribution to data analytics

This development is fundamentally changing the very concept of customer relations.

“The battle is no longer about controlling the relationship with the investor, but about mastering the data and insights that enable us to understand their behaviour and anticipate their needs,” explains Christelle Reichart. Asset management firms are not necessarily seeking to manage millions of client relationships themselves, but rather to gain better insight into their investors so they can tailor their products and growth strategies accordingly.

Data is thus becoming the new centre of gravity in the retail sector.

Digital platforms, behavioural analytics tools and automation technologies now make it possible to link together information that was previously scattered across banks, retailers and asset management firms. Those who master this intelligence will enjoy a lasting competitive advantage.

ManCo face a new challenge

This restructuring directly calls into question the Luxembourg model.

The Grand Duchy has built its European leadership on fund structuring, management companies (ManCos), custodian banks and expertise in cross-border distribution. But this long-standing foundation must now evolve.

According to Alfi, the core functions of ManCos – governance, supervision and regulatory expertise – remain unchanged. However, their role is gradually expanding with the development of digitalisation, artificial intelligence, data management and increasingly sophisticated services designed to support management companies on an international scale.

The same is true at PwC. The ManCos of the future will continue to fulfil their governance roles, but will also need to strengthen their expertise in data, technology, the oversight of automated processes and the management of operations. They will increasingly be positioned ‘at the intersection of governance, technology and operations’.

Luxembourg’s next challenge

Nevertheless, none of the stakeholders interviewed believes that the Luxembourg model is under threat. All, however, agree that the financial centre must adapt to these changes if it is to maintain its lead.

According to Britta Borneff, Chief Marketing Officer at Alfi, Luxembourg’s competitiveness will depend on its ability to continue to offer a robust regulatory environment whilst accelerating digitalisation, the use of artificial intelligence, tokenisation and distribution technologies.

Christelle Reichart goes a step further, arguing that Luxembourg will need to gradually evolve from a simple transit hub into an ‘intelligent distribution hub’, capable of delivering greater value through data and the associated services.

Christophe Saint-Mard ultimately sums up the issue in a single sentence: the next phase of competition will no longer be defined solely by the ability to structure funds, but by control over the infrastructure that connects products, data and investors.