Since 1 September, . He’s a familiar face--Théobald was deputy CEO between 2014 and 2019, before leaving to join the finance ministry. As the new number one at LFF, he’s following in the footsteps of his predecessor, Nicolas Mackel, who left his mark on the institution. “Nicolas and I worked closely together to develop LFF. Even during my time at the ministry, I continued to work closely with the organisation,” says the new CEO.
What roadmap have you been given?
Tom Theobald: My mission is to continue to position Luxembourg on the world stage. It involves meeting companies abroad and in Luxembourg to develop the Luxembourg marketplace in various markets, both geographically and thematically. Not only to develop new activities, but also, together with the government and the financial industry, to consolidate Luxembourg’s expertise.
In the coalition agreement, the government clearly indicated that the competitiveness and attractiveness of the financial sector are priorities. We cannot rest on our laurels because competition is everywhere, in Europe and outside the EU. It is crucial that Luxembourg continues to reinvent itself, to identify growth niches and to position itself strategically in these areas.
What growth drivers have you identified?
First of all, we need to move up the value chain, and this concerns all the areas in which Luxembourg has established itself as a centre of expertise, whether in funds, banking--particularly corporate banking and private banking--insurance or capital markets. A clear priority is the alternative funds sector, and even private assets, where the Luxembourg financial centre has already built up a solid reputation.
Luxembourg also has a great card to play in the area of digital assets and the tokenisation of funds, thanks to the critical mass in terms of funds and expertise, but also to our legislative framework. Other promising niches include sustainable finance and corporate banking, which is developing very well: in recent years, we have seen the arrival of several banks, notably from the US and the UK.
What products and activities would you like to promote as a priority?
LFF’s role, unlike perhaps the industry associations, is to develop and promote the whole of Luxembourg’s financial ecosystem. But if new niches develop, we will obviously promote them. We will be focusing, for example, on actively managed exchange-traded funds (ETFs) and European long-term investment funds (Eltifs). Or corporate banking, a sector that is central to the Luxembourg economy, but sometimes little known. The aim is to promote the Luxembourg financial centre as a whole, in all its facets.
Encouraging the development of existing players can have a more substantial impact than attracting new ones.
Which markets are you targeting?
On the one hand, there are the established markets where Luxembourg already has a critical mass of players. Encouraging the development of existing players can have a more substantial impact than attracting newcomers. We are targeting the main European countries, the United States, the United Kingdom and Japan, among others. The finance minister recently visited Switzerland and London, for example.
In the medium and long term, we are also looking at emerging markets such as Indonesia, Brazil and India. Our aim is to attract financial players by showing them the advantages of setting up here to serve Europe. However, our strategy remains selective: we are not venturing into markets without a substantial critical mass of players with internationalisation potential.
What about China?
China is a huge market, and we can’t ignore it. We have had great success with the establishment of several Chinese banks here, and recently one of the largest Chinese insurers opened its first European entity in Luxembourg. Despite changes in the investment climate due to higher interest rates in Europe, the long-term potential remains significant, particularly with a rapidly growing middle class. China therefore remains high on our agenda for future assignments.
Will you be going there soon?
We haven’t yet announced the schedule of missions, but China is and remains clearly on our radar.
What was your first mission abroad as CEO of Luxembourg for Finance?
I went to Milan with the finance minister the week of 16 September. Italy is a key market for us, particularly in the life insurance sector. It’s also our sixth-largest market in terms of fund promoters. The three biggest Italian players are active and expanding in Luxembourg. It is crucial for us to maintain high-level relations in these established markets, always in close collaboration with the ministry.
We want to position the financial centre in the wider efforts to make the EU more competitive.
How would you like your contribution to be measured in four years’ time, when your mandate is renewed?
I don’t think that setting numerical targets is relevant. It’s very difficult to measure precisely the impact of our actions, as the establishment of a company in Luxembourg is the result of a series of interactions and not of an isolated effort by LFF, even though we are often the first point of contact. And once again, our aim is not necessarily simply to increase the number of companies present, but rather to broaden overall economic activity. If a major US bank decides to expand its existing operations here, in terms of jobs or revenue, that’s just as significant--if not often more significant--than the arrival of several small businesses or startups.
What performance indicators (KPIs) could you set yourself?
One indicator is certainly to increase the size of the cake, without focusing on arrivals alone, as indicated. Another indicator is that Luxembourg is recognised as a centre of expertise in various sectors such as funds, banking and capital markets. This is also linked to the quality of our communications. For example, we want to position the financial centre in the wider efforts to make the EU more competitive, notably through the capital markets union and even the union of investment and savings markets. Finally, we obviously keep a close eye on the statistics on our communication campaigns abroad and our events, and adapt our approach as necessary.
Speaking of European competitiveness, what do you think of the ?
The Draghi report, like the Enrico Letta report that preceded it, underlines the importance of the EU’s competitiveness and the need for action. Europe faces a chronic investment gap that cannot be filled by public investment alone: it is crucial to get the financial sector more involved. Proposals such as securitisation make sense because they free up banks’ balance sheets and develop alternative sources of finance, including for innovative businesses.
Have and , as well as the attitude of the banks involved with , affected the reputation of the financial centre in recent times?
These three issues are isolated cases that are not representative of the financial centre as a whole. As CEO of LFF, I don’t feel justified in commenting on their substance. Other than to note that these ‘cases’ do not affect Luxembourg’s reputation abroad, that they could very well have happened in other countries and that swift action was taken in each case by the relevant authorities to quickly curb any negative consequences they might have had. In the specific case of FWU, it is also important to stress that the customer protection system, in particular the , is working.
Have you been about these issues abroad?
No, I haven’t.
We have one major advantage: local managers and country managers are very committed to the ecosystem.
Luxembourg can give the impression of being a financial centre with a wealth of businesses and skills, but one that is largely dependent on decision-making centres located elsewhere. How can we ‘sell’ abroad what might be perceived as a weakness?
Our aim is to position Luxembourg as a centre of expertise in certain specific areas. Major international players have located key activities here. Our role is to convince them to continue their development here. We have a major advantage in Luxembourg: local managers and country managers are very involved in the local ecosystem, often collaborating more openly than they would in other countries where competition between players is more marked.
Is it still an objective to have decision-makers here?
Absolutely. As I mentioned, it is essential for us to move up the value chain. We’ve seen a significant evolution in the financial centre over the last few decades: Luxembourg is no longer just a back office, but a place where you also find middle office activities, risk managers linked to portfolio management... It’s crucial that we continue to develop this level of responsibility and decision-making. Tax reforms, like those for expatriates, are an integral part of our efforts to attract decision-makers to Luxembourg, in the knowledge that their presence naturally leads to an increase in local activities.
Do you also have targets for a presence in the international eco-financial media?
One of the challenges for Luxembourg is its low profile compared with financial centres such as London or Paris, which are world-renowned capitals. Those who are directly involved with the Luxembourg financial sector are well informed, but beyond that, there is still a lot to be done to explain our role and our importance. So yes, it is crucial for me to take an active part in discussions with the international media to raise Luxembourg’s profile. And to be available to them to answer their questions.
This article was originally published in .