Paperjam: First things first, let’s take a look at the current state of PE fundraising. 2023 and 2024 were tough years. How does 2025 look so far?
Hind El Gaidi: According to McKinsey, private equity fundraising had a decline of around 15% in 2024, which was the third year of decline in a row. 2025 shows some encouraging signs of recovery. So it’s a glimpse of some hope and positive signals. We’re not back to 2021 levels--we had a blip there--but overall, the market dynamics are shifting positively.
I think you see a dichotomy now in the market, with certain players who continue to fundraise, and others who struggle quite a lot. Having said that, the large players who are still able to fundraise, it probably takes them more efforts to do that. We do see more creativity or openness to different solutions, like GP-led secondaries or continuation vehicles that provide flexibility and keep the momentum.
Luxembourg is working on transforming itself from a “middle office” platform to a “front office” hub for the private equity industry. What are some of the steps that the grand duchy has taken?
The question of going from “middle office” to “front office” is a bit of a double whammy for Luxembourg. A few years ago, we said we don’t want to be the back office of the world; it is, in fact, not a bad thing. It’s not black and white. I think there are some competencies that Luxembourg has--and that they do very well--and it would be a shame not to do that anymore, like audits or fund administration or structuring of funds.
What is interesting for us as an industry, is that part of the value chain is secured. Now we can say: how can we go a little bit higher in that value chain? That requires having the ecosystem, it requires upskilling and obviously it requires some investment from the government to make this happen.
It’s not just “this” or just “that,” but rather a continuum.
It’s not like we were producing thermal cars, and now we’re going to go 100% electric. It’s more like we were making only engines, and now we’re going to make the engine and the tyres and the car around it. It’s more integration in that value chain, doing things that used to be done elsewhere. It’s not just “this” or just “that,” but rather a continuum.
When it comes to steps that the grand duchy has taken, tax incentivisation has also been a big part of the Luxembourg strategy. This includes a number of things, like the impat tax regime [as of 1 January 2025, they can benefit from a 50% tax exemption on the first €400,000 of their gross annual compensation for a period of eight years, editor’s note], reviewing income tax or profit-sharing. These are very tangible, and can be a good way of getting your foot in the door. And once you open that door, you’d hope that people come and find that the quality of life is good, that their kids are in a safe environment, etc.
We hear a lot of talk around boosting the attractiveness and competitiveness of Luxembourg’s financial centre and drawing international investors and talent to the grand duchy. If you could implement a single measure to increase the country’s attractiveness--no matter how radical--what would that be?
A world-class sovereign wealth fund that has a programme to invest in alternatives or private markets. That could be the culmination for us as a country to--on the one hand--display all our capabilities, to showcase all our competencies. It would be the best way to say: we are good in structuring, we are good in fund administration, we are good in audits, we are good with NAV calculations. And on the other hand, it would also allow us to put our money where our mouth is. At the moment, we are not very exposed to it [investments in private markets]. It would also allow us to fund companies in Luxembourg or in the surrounding region. It would be a boost to the economy--and a boost with a required return.
You were elected president of the Luxembourg Private Equity and Venture Capital Association (LPEA) in early July. What are your main goals for the association?
It’s a three pillar approach. We’ve been in a huge growth phase for the last 15 years, and now we’ve gotten to a level where we’re quite large. So the first pillar is tightening the governance within the LPEA, to make clear the distinction between clubs and technical committees, to provide more value to members, to use governance bodies like the exco or the board in a more optimised way, and to have them participate in large strategic projects or in important decisions. It’s not a huge change; it’s more fine-tuning.
The second pillar is working with our stakeholders and improving the competitiveness of the LPEA towards local and international stakeholders, to let the LPEA own its voice as a representative of the private markets towards the CSSF, the tax authorities, but also Invest Europe, the European Commission, or other regulators and industry bodies, especially in the UK and the US.
And then the third pillar is to meet that promise of going higher in the value chain, by bringing the context, by creating the ecosystem, by cross-fertilising across different bodies and acting as a catalyst for new initiatives, like the AI Hub or the mutualisation project with the Luxembourg House of Financial Technology.
What is the LPEA doing for young professionals?
Many of our members--like Big Four or professional services firms--have this huge contingent of young professionals that we may not be engaging with as much. We do have, for instance, a very active committee called “Young Professionals” that’s under the legal umbrella. They have new event formats and are very dynamic; they try to connect with different professionals. A little bit like the “next gen” committee. But it remains quite specific to legal.
As much as we like Luxembourg specificity, we are embedded in global markets. We should also look with a holistic view.
What we’re thinking about is to also engage through social media with this part of our membership. Something that speaks to them, something where they feel they can recognise themselves, something that’s not just reading a journal or a magazine.
These are the types of avenues we’re thinking about, and potentially other committees or mentorship networks to create that next generation, the LPEA pipeline who will be the next co-chairs and board members and exco members.
The LPEA Insights conference will take place 23 October at Luxexpo The Box. Can you give us a sneak peek of the event?
You’ll see it in the agenda that we have 100% diversified the topics, as well as the people who will come. So we have LPs, allocators who will come and speak to that part; we have investment people who will speak about the reality of making deals. You’ll hear it from the horse’s mouth, as the saying goes, not from someone remote in the value chain. This is the specificity that we want to have. We want to bring the people at the conference much closer to where things are happening.
People will also come from countries other than Luxembourg, and they’ll speak about trends in other countries. It’s truly a European view. As much as we like Luxembourg specificity, we are embedded in global markets. We should also look with a holistic view. It’s the same Rubik’s cube, but you turn it in different directions and you end up with different colours. That’s the reality of our market. And it’s how you become more connected.
