The Association of the Luxembourg Fund Industry (Alfi) held on 30 September 2025, the first day of its Private Assets Conference. Finance minister Gilles Roth (CSV) addressed the global private assets community with a message of optimism and a call to action, emphasising that now is the time to act on Mario Draghi's report.
Roth highlighted the crucial role of the private assets industry in providing “patient capital for innovation, infrastructure, and resilience, which fosters job creation and long-term growth for Europe.”
This optimistic outlook is set against a backdrop of significant geopolitical and macroeconomic challenges, including war, geopolitical tensions, and cyber threats. On the latter, he said that “the invisible ones are potentially even greater for our financial sector. People fear what they cannot see.” Roth stressed that Europe must invest in security, energy independence, and technological leadership.
The financial sector in key figures
Roth told the audience that Luxembourg’s financial centre is presented as a dominant source of income and a strategic European asset, employing over 73,000 people directly and a similar number indirectly. It stands on four pillars: banking, funds, capital markets and insurance.
The fund industry is the largest pillar of its financial centre, managing €7.34trn in assets. Roth outlined several industry datapoints. Alternative funds have tripled in size since 2018 and now comprise 35% of total assets. Luxembourg dominates the European private capital funds market, domiciling over half of them and holding a 67% share of the European long-term investment funds. “Luxembourg-based funds are sold in more than 80 countries.”
Travelling the world over
“I make international visits in order to build bridges with partners and also financial institutions from all over the world, the US, China and Latin America,” said Roth. He explained their purpose is to “sign new partnerships, develop new double tax treaties, and make sure to meet with your leadership in global firms.”
Ongoing government initiatives
To maintain and strengthen its position, Roth commented that the government has implemented several practical changes to its "toolbox," such as easing housing constraints, improving tax regimes for expats and young talent, lowering corporate income tax, and removing the subscription tax for ETFs.
[Luxembourg advocates] for decentralised supervision with effective coordination and convergence
Roth commented that future initiatives include a tax reform moving toward a uniform tax class, pension adjustments, and an improved stock options regime.
Specific actions for the private assets industry
Roth remarked several initiatives are underway for the industry:
• Modernising the carried interest regime to attract and retain front-office teams and decision-making in Luxembourg. The current draft bill “broadens eligibility, clarifies tax treatment and recognises modern deal-by-deal economics. It creates a permanent, predictable framework aligned with international practice,” said Roth.
• Transposing the AIFMD II directive. “Just yesterday, the government council approved the draft bill, thanks to the intense collaboration between the Ministry of Finance, Alfi and the CSSF, said Roth. He explained that it will introduce stronger governance, enhanced liquidity management tools, and permit alternative investment funds (AIFs) to engage in lending, positioning Luxembourg as a leading hub for alternative financing.
Centralised supervision discussions underway
Roth voiced concerns about proposals for centralised supervision at the EU level by the European Securities and Markets Authority (ESMA). “I do not believe that centralised supervision would help deliver the objectives of the savings and investment union,” he said.
Instead, he argued it would increase complexity without boosting competitiveness. He commented that Luxembourg advocates for “decentralised supervision with effective coordination and convergence,” relying on national expertise and proximity to firms. The finance minister urged the industry to use its voice to oppose centralised supervision, providing data and evidence to the European Commission.
In conclusion, Roth reiterated the government's commitment to competitiveness, certainty, and partnership. “Private assets are not a niche. They are vital for Europe's growth and for Luxembourg's role as a global funder,” he stated.
