Luxembourg has played a pivotal role in Waystone’s rapid growth and has been a key factor in the company’s broader European strategy, said Denis Harty, country head for Waystone Continental Europe and CEO of Waystone Management Company (Lux) SA, in an interview with Paperjam. Waystone, which provides a range of solutions for investment firms, asset managers and asset servicing companies, has seen its success in the grand duchy driven by both new client acquisitions and the scaling of existing clients’ assets under management. “Our growth in Luxembourg can be viewed from two dimensions: first, through new business, where a new manager receives services from Waystone for the first time,” he explained. “Second, we’ve seen significant growth driven by the expansion of existing client AUMs, with clients in Luxembourg eager to scale their strategies from this jurisdiction.”

Harty pointed to significant demand, particularly from alternative asset managers, as a driving force behind Waystone’s increased presence in Luxembourg. “Notably, we saw exceptional growth in private equity and private debt strategies in the past few years, where the combination of Luxembourg’s regulatory toolkit and Waystone’s reputation built a high degree of confidence among managers,” he added. “In fact, we are the fastest-growing third-party management company in Luxembourg, as highlighted in the latest PWC management company barometer,” remarked Harty.

Waystone’s European strategy

“Luxembourg is the world’s second-largest funds market, second only to the US,” Harty said, adding, “Luxembourg is experiencing significant growth, and so is our business here.” He credits Waystone’s growth to Luxembourg’s long-standing reputation in undertakings for collective investment in transferable securities (Ucits) management and its rise as a leader in alternative and private asset funds.

A notable milestone for Waystone in Luxembourg has been its with Alger, which added $600m to its AUM. Harty described the collaboration as a “true win-win,” where Waystone consolidated multiple service providers into one relationship. “We enabled Alger to consolidate multiple services providers into a single relationship with Waystone, providing them a comprehensive suite of solutions across Europe,” he said.

By doing so, Waystone strengthened its position as a preferred partner for both boutique managers and blue-chip institutions like Citi and JP Morgan. “This integration highlights Waystone’s strength in simplifying complexities for asset managers,” allowing them to leverage Waystone’s range of services and multi-jurisdictional expertise.

Luxembourg’s Raif market

The rise of reserved alternative investment funds (Raifs) has been a key trend in Luxembourg’s financial landscape. Waystone has positioned itself as a leading player in this space, launching more Raifs in Luxembourg than any other firm in 2023. “Our portfolio in Luxembourg now comprises approximately 60% alternative assets and 40% Ucits,” Harty reveals. “The Raif structure has provided our clients with the flexibility and speed to market that they need.”

Waystone continues to support the full spectrum of fund structures and regulatory frameworks available in Luxembourg, ensuring that clients receive comprehensive solutions tailored to their needs, noted Harty.

Competition from Dublin

As competition in Luxembourg’s financial sector increases, particularly from Dublin, Waystone differentiates itself through its client-centric, tech-enabled approach. Harty said that the firm’s strong presence in both Luxembourg and Ireland allows it to deliver a seamless experience for clients managing funds across both jurisdictions. “We are the largest third-party management company in Ireland, and our approach is entirely client-led,” Harty affirmed. “Whether clients need support in Luxembourg, Ireland, or both, we ensure an integrated, high-quality service delivery.”

Evolving regulatory landscape

In the face of changing regulatory requirements across Europe, including those related to environmental, social, and governance and anti-money laundering, Waystone has invested significantly in technology and talent to remain ahead of the curve. “The evolution of the regulatory environment is at the core of Waystone’s value proposition,” stated Harty. “We specialise in guiding clients through complex regulatory obligations, giving them peace of mind.”

These investments in people and technology have been key to Waystone’s success, enabling the company to efficiently adapt to regulatory changes. “By combining industry-leading expertise with robust technology, we help our clients focus on their core business while we manage the complexities of regulatory compliance.”

Attracting and retaining talent

Addressing the talent shortage in Luxembourg’s financial sector is also on Harty’s mind. He pointed out to the firm’s recent certification as a ‘great place to work’ as evidence of its commitment to employee engagement and satisfaction. “We focus on creating career development pathways for young professionals, offering opportunities for graduates and interns to transition into full-time roles,” explained Harty.

This focus on career growth not only attracts top talent but also fosters long-term retention, which Harty believes is essential to sustaining growth in Luxembourg’s financial sector. “While external challenges, such as housing costs, persist, we are optimistic about the government’s initiatives to address these concerns.”

AI and technology

Technology is central to Waystone’s strategy, aid Harty, and the firm has made significant investments in artificial intelligence and digital solutions. Harty stated, “We’ve already deployed multiple AI-enabled solutions in our live environment, and we continue to expand this integration.” These technological advancements help streamline processes and enhance efficiency, ultimately contributing to an improved client experience.

“By continuously adopting new technologies, we stay ahead of industry trends, offering innovative solutions that meet our clients’ evolving needs,” Harty reasoned.

Outlook

Looking ahead to 2025, Harty outlined several key priorities for Waystone’s Luxembourg operations. “While we are well known for our manco services, our administration offering–including alternative asset administration and corporate services–deserves more recognition,” he noted.

Technological transformation is also a major focus for the firm. “We have many exciting advancements in the pipeline for 2025 that will significantly enhance the client experience,” he said. Additionally, Waystone plans to expand its service offerings in areas such as AML, KYC, and manco support.