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Renewed optimism for a New Year

21 December 2020

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After the most challenging of years, my hope for 2021, especially now that COVID-19 vaccines are being rolled out, is that we can return to a more normal way of working and living. But that doesn’t mean that lessons learnt during the pandemic should be forgotten or thrown away.

Every company’s greatest asset is its people. We must ensure we maintain a working environment that’s both challenging and rewarding, but remember it’s equally important to look after people’s physical and mental wellbeing. Attracting talent is always a top priority for Intertrust Group; it’s vital we hire a workforce for the future that’s agile, adaptive and innovative, and that will drive long-term success for our clients.

The pandemic has accelerated both the digitalisation of business models and remote working, with companies of all sizes realising they can maintain, or even boost, productivity without leaning on physical offices. Home working has offered much greater flexibility to employees and I hope this remains the case. However, we need to also ensure we’re communicating well across teams and so we continue to invest in the right skills and software to underpin our role as a tech-enabled service provider for corporates and funds; your transformational partner.

Breaking down Luxembourg’s bullish outlook

Whilst there’s still a certain level of uncertainty, there’s plenty of reasons to be optimistic. The data suggests that Luxembourg’s economy recovered gradually in Q3 2020, after GDP had contracted for the first time in nearly eight years in the second quarter.

The government presented the draft budget for 2021 in October 2020, showing increased investment of 4.3% of GDP (EUR 2.7bn). It’s fair to say the government has responded well to the downside shocks, and its asymmetric approach to interest rates and taxation should allow long-term recovery and value creation.

Many expected a somewhat discouraging 2020 for the existing corporate and private wealth structures we service, but the year’s pipeline actually demonstrated increased inflows of new opportunities and a sense of stability. The increased interest in these structures at the close of 2020 is a good omen for the coming year, a perception shared by my business development colleagues who’ve underlined the quality of our client portfolio in this sector, which we’re excited to explore as we seek to strengthen our client-centric approach.

It’s evident the fund industry will remain an interesting growth market as positive investor sentiment returns. Across all sectors, there’s a diversified number of actors, each one looking for opportunities – whether it be in distressed debt, real estate, or private equity – that simply weren’t there prior to the pandemic.

Luxembourg continues to be a primary hub, providing a base for the world’s top 19 private equity players. Most private equity firms are looking at what changes COVID-19 has prompted. One of the more obvious results of the pandemic is a boost for online businesses as consumer behaviour changes rapidly, and you can bet that private equity funds will be putting record dry powder to use as they snap up tech-led businesses with bright prospects.

Many ambitious private equity firms have concluded that companies which specialise in facilitating the transformation towards a digitalised service economy will do well. Mirroring this, Intertrust Group is busy working with clients to digitise and automate processes, increasing efficiency in the exchange of information, as well as the availability and transparency of that information.

Meanwhile, the challenges the global real estate industry is facing are multi-faceted. The headwinds created by external factors such as COVID-19, a potential ‘No Deal’ Brexit, and global trade wars necessitate a nimble, timely reaction. Industry trends like investors requesting a stronger focus on ESG criteria, the use of ‘proptech’ to manage assets, and the adoption of AI will continue to drive efficiency and innovation in the industry.

We’re on hand to provide end-to-end real estate solutions, with the ability to set up and manage entities at the global SPV level, through to full fund administration and investor services, such as onboarding and KYC/AML. Heading into an exciting new year, we’re well placed to help clients unleash their potential.

Our clients have always inspired me and I’m often in awe of what they achieve, even in the face of a global pandemic. I’d like to sign off by thanking them for their ongoing trust and support during the most difficult of years.