The Real Estate Market in Luxembourg: Good or Bad news?

Abstract

Over the last decades, the Fund industry has increased its volume and business interested considerably and the sector has seen many countries grow and expand by offering to the investor a multiplicity of services related to the Fund Administration. Since the introduction of the regulations which tried to impose a series of law to moderate and maintain secure the sector, Luxembourg has been the first European country which adopted the European Fund's Directive (arcasset): it issued a detailed Regulation which specified every particulars in order to set up an a Fund company in Luxembourg. The sudden growth phenomena started since the implementation of the European Directive governing UCITS in 1998 and nowadays the country being a member of the European Union, has seen a constant growth in terms of the related funds' services: legal, fiscal, administrational and consultative. This trend, is attracting more companies every day and according to last EFAMA's report, currently, at the end of the last year (2016) the Net asset of fund industry located in Luxembourg was equal to 3,701,076 (Billion of Euro) which represents the 27.56% of the total assets managed by investment fund in the European Union. Enlarging the view, the small Grand-Duché in the heart of the Europe contributes globally with 9.10%. This dissertation, aims to consider the strategic active performance measures proposed for the asset management industry and it will try to evaluate their effectiveness for constructing an investment strategy on the Luxembourgs' REITs. In order to do so, we will use the models and techniques developed within the Capital Asset Price Model (sharpe1964capital) and the relatives implementation of if. The first part of this work, will introduces the concept of the REITs located in Luxembourg and, will be exposed the legal framework allowed combining with a deep understanding which will permit to emphasise the context for the following analysis.The second part of the work, will present the basic notions and studies related to Asset Management evaluation, introducing the model and the theory which will support the dissertation. The third chapter will explain the data have been collected and the methodologies used to analyse them. The fourth chapter displays the results of our core analysis and the conclusion that we can draw from them.