European Fund Administration('EFA') is an independent fund administration company headquartered in Luxembourg that has partnerships with over 90 custodian banks and services all types of funds. The company currently has over 2,700 funds under administration on behalf of 233 clients and, for the last 12 years, has been considered as the largest third-party fund administrator in Luxembourg*. REP recently caught up with Pascal Leclerc, Head of EFA Private Equity, EFA's dedicated business line servicing private equity and real estate funds.
"EFA has been focusing on alternative fund administration from the beginning of last decade and since five years more particularly on private equity and real estate investment vehicles servicing.
"As to the real estate market and from a pure fund administrator standpoint, we can outline that our clients have been focusing on more opportunistic investment strategies since 2008, compared to, say, in the mid-2000s, when the focus was clearly more on core core plus funds and funds of real estate funds, thanks to favorable market and credit conditions, a continuous growth in asset valuation and regular returns.
"Whereas the real estate core market has always been the preferred investment ground for institutional investors, opportunistic investment strategies are nowadays also considered as attractive by smaller - in size - categories of investors such as corporate investors, family offices and High Net Worth Individuals (HNWI). As a matter of fact, the size of those funds as well as the asset type and the geographical focus tend to narrow but returns remain quite high and allow for such additional risks to be accepted.
"Indeed, due to difficult market conditions in the core markets, diversification in different - alternative - types of real estate investment strategies is the key word in private placements e.g. timber, nursing homes, etc. Coupled with some kind peripheral cyclical strategies e.g. distressed assets/loans buyback, substantial activity remains awaiting recovery in more traditional markets/assets.
Focus on Luxembourg
"Luxembourg is the second-largest worldwide fund center after the US. Luxembourg has experienced a clear and steady growth in its alternative investment structuring activity, for the benefit of an increasingly wider span of investor categories since the mid-2000s, favored by the introduction of specific laws and regulations e.g. SICAR Law, SIF Law, etc. that have contributed to strengthen Luxembourg's positioning as the major hub for the location of investment vehicles investing both in traditional and non-traditional asset types.
"Where offshore jurisdictions used to prevail in terms of selection of domicile for alternative funds but while the fund structuring activity has never stopped evolving in the meantime towards increasingly complex architectures, Luxembourg represents more than ever the most adapted place to set up and administer cross-border multiple-tier investment vehicles, thanks not only to its fast-evolving legal