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19th July 2024

Understanding the Fund Financing Technical Committee within the LPEA: Its Origins and Key Objectives

The Luxembourg Private Equity and Venture Capital Association (LPEA) has recently launched a technical committee dedicated to fund financing. In an exclusive interview, Yves Wampach, IRM – Lending-Fund Finance at Spuerkeess and newly elected co-chair of the new ‘Fund Financing’ Technical Committee” within the LPEA, shares the origins of this initiative and its ambitious goals.

What is the purpose of the Luxembourg Private Equity and Venture Capital Association (LPEA)?

Founded in 2010 by a leading group of private equity and venture capital players in Luxembourg, the LPEA, whose main role is to actively promote private equity and venture capital in Luxembourg, is the most reliable and relevant representative body of private equity and venture capital practitioners in Luxembourg.

The association currently has over 530 members and aims to represent, promote and protect the interests of the private equity and venture capital industry.

Why and how did the idea of setting up a technical committee come about?

The idea for the committee emerged during a spirited discussion with Claus Mansfeldt, LPEA’s president, about the evolution of the Private Equity market and the role of banks within this ecosystem. It became clear that a technical committee representing the banking perspective within the LPEA would be highly valuable. Following this insight, a dynamic and constructive dialogue with Stéphane Pesch, LPEA’s CEO, led to the establishment of the committee. Currently, the committee comprises eight banks operating in Luxembourg’s financial sector, specialising in investment fund financing.

Who are the committee members?

The committee aims to remain aware of market needs and continuously gather feedback to stay informed, which is why two general partners are also integral members of the committee.

Also, the committee remains open to new members eager to enrich the discussions.

The current committee members are:

  • Spuerkeess: Yves Wampach (co-chair) and Paolo Vinciarelli
  • RBS International: Daniela Klasen-Martin (co-chair)
  • BIL: Lionel Bodson and Edouard Bély
  • Banque de Luxembourg: Pierre Even and Sonia Simoes
  • Intesa San Paolo: Cyril Lepeu and Eugenio Afelici
  • ING: Crystal Junyuan Zhen, Netta Sundar and Owen Murphy
  • HSBC: Andrea Nini and Rachid El Majjouti
  • Barclays: Snorre Tysland
  • Kartesia: Basile Gerber
  • Ilavska Vuillermoz Capital: Quentin Dupraz

What are the committee's missions?

The “Fund Financing” committee aims to enhance the attractiveness of Luxembourg’s financial hub. In its initial phase, it focuses on four strategic pillars:

Awareness

Despite its importance, fund financing remains relatively unknown in Luxembourg. The committee is dedicated to raising awareness about the existence and importance of fund financing both within the local financial ecosystem and beyond. We really need to explain the workings and benefits of the different facility types. While established funds are familiar with various credit solutions, new players require specialised guidance.

Although large General Partners often possess knowledge about the functioning of various facilities, they frequently remain unaware that Luxembourg-based banks offer such specialised products. Therefore, it is of utmost importance to spread this message widely.

Education

The committee is also committed to playing a significant educational role by developing a comprehensive educational program in partnership with both national and international stakeholders. This initiative aims to enhance knowledge and understanding across various sectors.

In addition to this, the committee plans to organise a series of Masterclasses that will delve into different lending facilities. These Masterclasses are designed to provide detailed explanations on how these credit facilities operate and highlight their benefits. By doing so, the committee hopes to empower participants with the knowledge needed to make informed decisions regarding credit options.

Technical Advancements

The dynamic fund industry, coupled with ever-evolving regulatory demands, necessitates continuous adaptation in financing requirements. As part of our responsibility, we diligently discern our customers’ underlying needs and customise financing facilities to align precisely with their current requirements. 

Given the intricate nature of this sector, fostering cooperation and facilitating knowledge exchange becomes imperative. Consequently, the committee endeavours to enhance financing mechanisms across diverse fund structures, recognising that technical adjustments are central in addressing the evolving needs of the market.

Luxembourg Market Insights

In Luxembourg’s fund financing sector, several fundamental questions persist: How many funds currently benefit from a credit facility? Which types of funding are most dominant, and what emerging trends are shaping the industry? These questions remain unanswered but are essential for a comprehensive understanding of the market.

The committee’s firm objective is to illuminate this landscape. By systematically collecting and analysing data, we aim to provide a detailed and accurate picture of the market’s current state. Regular surveys will be conducted to track the market’s evolution over time and to measure the positive impact of our initiatives. This approach will not only help in understanding the present dynamics but also in anticipating future trends and challenges, thereby enabling stakeholders to make informed choices.

In conclusion, the creation of the “Fund Financing” Technical Committee within the LPEA is a big step forward for Luxembourg’s financial sector. By raising awareness, providing education, driving technical innovation, and gathering market insights, the committee will clearly show the value of fund financing, better meet the needs of funds and strengthen Luxembourg’s position as a financial centre. This proactive approach ensures that Luxembourg stays ahead in the global financial scene, creating a strong and dynamic environment for private equity and venture capital.

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