Exploring Luxembourg’s strategic role in channeling European investment into Southeast Asia
As European investors look to rebalance global portfolios and expand into high-growth markets, Luxembourg continues to strengthen its position as the world’s premier domicile for international investment funds. At the forefront of this ecosystem is the Association of the Luxembourg Fund Industry (ALFI), representing over 1,500 members and serving as a critical bridge between asset managers and global opportunities—including Southeast Asia.
In this exclusive Bridges interview, Serge Weyland, CEO of ALFI and former CEO of Edmond de Rothschild Asset Management, shares how Luxembourg’s fund infrastructure is evolving to support cross-border investment strategies, what makes Southeast Asia attractive, and the essential next steps for aligning European capital with local VC ecosystems.
Bridges: Serge, let’s begin with an overview—how has the Luxembourg fund industry evolved in recent years?
Weyland: Luxembourg has seen significant growth, particularly in alternatives. As of 2023, the country manages €7.3 trillion in assets, including €2.5 trillion in Alternative Investment Funds (AIFs). In fact, the AIF segment has grown at a compound annual growth rate of 20 percent over the past five years—especially in private equity, private debt, and infrastructure.
What’s notable is that 95 percent of the top 100 private asset managers now have a presence in Luxembourg. It has become the global go-to domicile for distributing private asset strategies. For institutional investors, Luxembourg vehicles such as RAIFs (Reserved Alternative Investment Funds) and SCSp (Special Limited Partnerships) are widely used. Meanwhile, Part II funds and ELTIFs (European Long-Term Investment Funds) are increasingly leveraged to distribute private asset strategies to wealth managers and private clients.
How is Luxembourg engaging with Asia, especially Southeast Asia?
There is renewed interest in Asia among European family offices and institutional investors, particularly in response to geopolitical shifts and an overconcentration in United States allocations. Investors are now rethinking whether a 70 to 75 percent US portfolio weight is sustainable, and we’re seeing moves to reduce that to around 50 to 60 percent, reallocating capital toward regions like Asia.
In Southeast Asia, countries such as Vietnam and Thailand are drawing attention due to domestic growth, infrastructure needs, and increasing openness to foreign capital. However, access remains a key challenge.
How are Luxembourg-based investors accessing these opportunities?
ALFI organizes around 50 to 55 events each year—both locally and internationally—with approximately 20 of these as international roadshows, including in Asia. These engagements allow us to connect with local fund associations, private equity networks, and venture capital communities. They are an important foundation for building long-term partnerships.
That said, the process of establishing meaningful, on-the-ground collaboration with local players is still at an early stage. There is significant room for improvement in developing joint ventures and fund-of-funds structures.
Access is often hindered by restrictive currency controls or underdeveloped fund frameworks. Vietnam and Indonesia, for example, are clearly on the radar, but many investors have yet to find viable entry strategies. India, by contrast, is slightly ahead due to its large population and growing base of domestic champions.
We are actively rethinking how we engage with key markets through our Market Strategy Committees, which bring together stakeholders with first-hand knowledge of regions like Southeast Asia.
Serge Weyland, Chief Executive Officer of ALFI
Which Southeast Asian countries hold the most promise—and what are the structural challenges?
Beyond India, we see Vietnam, Thailand, and Indonesia as very promising. Vietnam in particular is increasingly viewed as an alternative to China, given geopolitical shifts.
However, challenges remain—especially regarding currency controls, regulatory transparency, and a lack of outbound investment frameworks. Interestingly, we have seen that when countries open up to outbound investment—Brazil is a good example—it builds confidence among global investors and catalyzes more inbound capital. That signal of openness is key.
Luxembourg can support this process through its global fund toolbox. Our fund structures are distributed in over 80 countries and can be adapted to meet a variety of investor needs. This flexibility is something local Southeast Asian fund managers could tap into if they want to attract long-term European capital.
Final thoughts on bridging Luxembourg and Southeast Asia?
We are actively rethinking how we engage with key markets through our Market Strategy Committees, which bring together stakeholders with first-hand knowledge of regions like Southeast Asia. In parallel, we are working with Luxembourg embassies and the local Luxembourg business community in these markets to deepen our understanding.
The interest is clearly growing—but so is the need for access. Luxembourg, with its depth in fund structuring and cross-border distribution, is well positioned to serve as the platform that bridges European capital with Southeast Asian growth—particularly through strategic partnerships, locally domiciled feeder funds, and closer cooperation with regional VC ecosystems.
