Quentin Rutsaert, says the establishment of Rutsaert Legal in 2010 was prompted by the ill-wind of the global financial crash two years earlier. The firm seized opportunities from the renewed emphasis on financial regulation, in particular applied to alternative investment funds.
Can you tell the story of your firm in a few words?
After the financial market confusion caused by the crash of 2008, it took a couple of years for the new environment to crystallize. We saw the reshuffling of the cards triggered by the crisis including the disappearance of some market segments. But it was not clear until 2010 where the new opportunities would arise. During our first three years, we worked in concert with an international law firm as their Luxembourg correspondent. By the time they set up their own Luxembourg office in 2013 the trend was clear to us: a legacy of the 2008 crash was a virtual re-shaping of the non-UCITS investment funds market, among others through the enactment of the AIFM Directive financial market regulation rule book. Asset managers and investors needed a pilot to provide them through the new regulatory environment and we had the skills on offer.
How did your clients’ needs evolve over the last decade?
Our expectation that regulation would come to the fore was vindicated: regulatory issues have become an ever-increasing proportion of the process of establishing funds. Previously tax issues were seen as the critical area to be addressed. Clients now understand that while the proposed structure of a fund must be validated from a tax perspective, a Luxembourg fund will be taxed at similar levels as those of other fund jurisdictions. People creating funds are no longer attracted to Luxembourg solely because of its competitive tax regime or, indeed, by its interconnection with other offshore jurisdictions. Instead, they look for a well-functioning ecosystem for fund set-up, fund administration and fund distribution.
Where do you see the PE/RE industry going in the coming years?
Clients choose to locate their asset management and advisory teams in Luxembourg because of the advantages it offers for establishing and managing funds. Brexit has accelerated the number of PE teams moving here, in order to both to comply with rules and to benefit from our ecosystem. As a result, the PE/RE industry has had an excellent year in 2019 and we are optimistic about 2020. The PE/RE industry in Luxembourg should benefit from AIFM 2 and the new EU Anti-Tax Avoidance Directive 2, (ATAD 2”).