The Luxembourg asset management market continues to grow, but the key takeaway from the latest survey published by PwC Luxembourg lies less in the increase in volumes than in the evolution of the sector’s business model. According to the study, third-party ManCos now manage 19% of assets under management in the Luxembourg market, a sign of the growing trend towards outsourcing management and regulatory oversight functions.
This trend comes as assets under management by management companies (ManCos) reached €6.313bn at the end of 2025, up 7.8% year-on-year. The survey was conducted among 65 firms representing 87% of the sector’s assets under management and 79% of its workforce.
The rise of third-party ManCos reflects a gradual transformation of the European fund industry. Faced with a proliferation of regulatory obligations, increasing governance requirements and the need for specialist teams in compliance, risk management and valuation, many fund promoters now prefer to use specialist platforms rather than setting up or maintaining their own in-house structures.
This development comes at a time when Luxembourg continues to strengthen its position within the European fund industry. According to PwC, 35% of fund assets domiciled in the European Union are currently registered in the Grand Duchy. The country also remains a preferred jurisdiction for alternative funds and their managers.
Alternative energy: a driving force for transformation
The growth of alternative investments is, in fact, one of the driving forces behind this transformation. Private assets – whether private equity, private debt, infrastructure or real estate – require more specialised expertise and more sophisticated control mechanisms than traditional funds. In 2025, seven new alternative investment fund managers (AIFMs) were thus authorised in Luxembourg.
The barometer also highlights a continuing tightening of requirements regarding substance and governance. Independent directors now account for 29% of the members of ManCo boards. Asset valuation remains a subject of particular scrutiny, especially for complex or less liquid assets. PwC has therefore observed a growing reliance on external specialists to enhance the independence and reliability of valuation processes.
At the same time, asset management firms are stepping up their digital transformation. According to the study, 92% of respondents are already investing in digitalisation projects. The cloud is described as an infrastructure that has become essential, whilst artificial intelligence is gradually finding its place in compliance, risk management and customer relations.
However, this transformation is not without its challenges. Data quality, standardisation, governance and the availability of the necessary skills are among the main obstacles identified by market players.
Four key factors for success
According to Laurent Butticè, head of management company-related activities and audit partner at PwC Luxembourg, the sector is entering a new phase of its development. “The Luxembourg ManCo landscape continues to demonstrate strong resilience and a great capacity to adapt in an increasingly complex environment. ManCos are entering a new phase, where success will depend on their ability to balance innovation, sound governance, sustainable business models and the development of talent,” he emphasises.
Beyond the growth figures, the barometer paints a picture of an industry undergoing radical change. The challenge for Luxembourg-based management companies is no longer simply to attract more assets, but to demonstrate their ability to manage increasingly complex products within an ever-more-demanding regulatory framework. In this context, third-party ManCos appear to be among the main beneficiaries of the sector’s drive towards greater professionalisation.
