Private debt AuM in Luxembourg increased by 24.7% in the two months to December 2024, according to a report by KPMG the Association of the Luxembourg Fund Industry (ALFI).
Key findings of the survey include:
- Strong growth in AuM: the Luxembourg private debt market grew by 24.7% in AuM based on data provided by 13 Luxembourg depositary banks.
- European investment focus: while North America remains a key investment region (17%), Europe continues to dominate with European Union (EU) member states accounting for 37% and the rest of Europe for 26%. Other regions include Other Americas[1] (6%), Asia (5%), and Africa (3%
- Diversified sector exposure: investment is broadly spread, with leading allocations to chemicals, IT, telecoms, media and communications (19%), healthcare and life science (17%), energy and environment (16%), infrastructure and transportation (15%), and consumer goods (13%).
- Fund structure trends: the balance between debt-originating funds (50%) and debt-participating funds (48%) has shifted only marginally compared to last year (49.3% and 49.5%, respectively). The share of open-ended funds has declined from 26% to 10%, while closed-ended funds account for 90% of the market.
- Vehicle preferences: RAIFs dominate Luxembourg’s debt fund market (64%), followed by SIFs (29%), Part II funds (5%) and SICARs (2%). Debt fund managers choose the SCSp as preferred legal form (80%).
Julien Bieber, Partner Tax, Alternative Investments, at KPMG in Luxembourg, said: “Investor demand and product innovation are driving clear growth in private debt. Luxembourg’s rise in cross-border fundraising vehicles is turning the country into a go‑to location for origination and servicing. With ESG checks built into our processes and modern technology streamlining transactions, we are strengthening the market’s resilience and broadening access for all participants.”
Serge Weyland, CEO at ALFI, highlighted: “Driven by investor confidence and adaptability, Luxembourg’s private debt market continues to grow and is steadily evolving. Its regulatory flexibility, innovative environment, and skilled workforce cement its role at the core of Europe’s alternative investment landscape.”
