ABBL

An interview with Fernand Grulms, CEO of Luxembourg for Finance

In January, LFF will organise an official mission to the Middle East in company of the Minister of Finance. Which countries will you visit and why these in particular?

Fernand Grulms: We will visit Qatar and, in the United Arab Emirates, Dubai. The answer as to why these places is quite straightforward. We are trying to apply a certain rotation principle when it comes to the jurisdictions that we visit. As we didn’t go to Qatar and Dubai during our mission to the Middle East this year, we are visiting these places in 2012.

This is isn’t your first visit to the region. Why did you choose the Middle East as a strategic place to promote the Luxembourg financial centre?

Fernand Grulms: We have indeed visited the region on a number of occasions. In terms of Luxembourg’s overall strategy, we make sure that we are present in the Middle East at least once a year. Currently, we are actually there twice a year. Besides our yearly trade mission, we are also one of the main sponsors of the World Islamic Banking Conference, which traditionally takes place in Bahrain. The Luxembourg finance community accompanies us to this conference, which is one of the biggest finance events in the region.

The Middle East is the closest region to us outside of Europe. Importantly, it is a region with strong growth. Visiting the Middle East is particularly important for us, since Luxembourg is still comparatively little known in the region. Whereas the United States and the UK, for historical reasons, have had a well-established presence for the past 50 years, Luxembourg only began to make itself known in the region in 2005. We thus still have a great deal of work ahead of us in order to make a name for ourselves.

I am pleased that Luxembourg recently inaugurated its embassy in Abu Dhabi, which will be responsible for the entire region. The embassy will be an important support in our promotion efforts in the region and will allow Luxembourg to further improve its political contacts.

Are there any services or products that are particularly appealing to clients and professionals from this region?

Fernand Grulms: The service and product offering that we promote in the region is very broad. Our target audience consists of the large expat population in the Middle East, on the one hand, and the local population, on the other. We promote Wealth management services and services to institutional clients, for example. For the latter, investment funds, structures such as the Soparfi, or Securitisation are of particular interest. Finally, we are also trying to position ourselves in terms of Islamic finance and gauge how we can cooperate in this area.

Qatar recently decided to buy two important banks of the Luxembourg financial centre. The Emirate already has a big stake in Cargolux. Why do you think Qatar is interested in investing in Luxembourg?

Fernand Grulms: The royal families and the governments of Qatar and Luxembourg have traditionally had excellent relations. This has certainly had a considerable influence on Qatar’s decision to invest in Luxembourg. Qatar is a wealthy state and it is investing in a number of jurisdictions around the globe. It clearly saw in Luxembourg a good investment opportunity. Luxembourg, as a trusted and stable jurisdiction, represents a useful diversification in their overall asset allocation strategy.

In your opinion, how does Qatar hope to benefit from having such a strong presence on the Luxembourg financial centre? And, conversely, what are the benefits for Luxembourg to have Qatar as a major investor?

Fernand Grulms: Qatar presumably has two motives. The first is, of course, to have a financial investment in Luxembourg in order to generate revenues. The second is to leverage this investment by doing business in Europe.

Qatar is very well networked, in particular in the Gulf region, the MENA (editor’s note: Middle East and North Africa), but also in Asia. Companies like Cargolux, Dexia-BIL or KBL can benefit considerably from Qatar’s connections to do business in these regions. I believe that having Qatar as an investor in Luxembourg is beneficial for both parties.

Interview published in Luxembourg Banking Quarterly 04/2011