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| Welcome to the website www.philanthropie.lu This website, initiated by Banque de Luxembourg, has been designed to provide information on the symposium and charitable giving in Luxembourg. |
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Find the complete set of interviews and testominals in our "Supporting Foundations" brochure. For more information on how we support foundations, please contact us: by telephone (+352) 49 924 1 by e-mail philanthropie@bdl.lu |
Interview with:
Responding to challenges faced by foundations
"Dovetailing our business and social commitment," Henri Reiter
Managing a foundations' assets in times of crisis and recovery
"By evolving towards long-term investment models," Guy Wagner
Investing in the SRI Fund BL-Equities Horizon
"Combining financial return with a social dimension," Joël Reuland
Luxembourg's expertise in social finance
"Devising tailor-made responsible investment vehicles," Corinne Feypel-Molitor
Testimonials:
"Banque de Luxembourg has given us the opportunity to grow together"
Tim Radjy, AlphaMundi
"A real understanding of the issues and challenges"
Sophie Molitor, SOS Children's Villages
Responding to challenges faced by foundations
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"Dovetailing our business and our social commitment"Henri Reiter, Director, Banque de Luxembourg |
Why does Banque de Luxembourg offer dedicated services for foundations?
We have been working with foundations for many years in many fields. We ourselves support a variety of projects through our patronage and sponsorship activities and are also very involved in developing a strong framework for philanthropy in Luxembourg. As a private bank, we work with trust founders from the inception of their projects through to fruition, and they benefit from access to our network of specialised philanthropy experts. We have a good understanding of the foundations world and the challenges they face. Our dedicated service for foundations, and our tailor-made asset management and investment fund expertise are a natural dovetailing of our business and our social commitment.
What is your conception of asset management for foundations?
Asset management is a pillar of the financial centre of Luxembourg – and of our bank. We don’t have a ‘miracle’ solution for foundations. Our philosophy – over and above our expertise in asset management – is to understand the needs of each of our clients so that we can provide long-term solutions. We offer foundations personalised asset management strategies which involves striking a balance between the need to preserve their endowment and the need to generate a better return in order to accomplish their missions. We do this by giving priority to long-term performance consistency over short-term gains that provide little transparency. We can also help foundations plan their schedules of revenue from capital to match their liquidity needs.
Managing a foundations' assets in times of crisis and recovery
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"By evolving towards long-term investment models"Guy Wagner, Chief Economist Banque de Luxembourg |
What is your assessment of the current economic situation?
Over the last thirty years, the global economy has been driven by the American economy, itself fuelled by the consumption of American households. Their consumption continued to grow while their revenues stagnated. They chalked up debt and their savings levels fell... In short, American households started to live beyond their means with the consequences we now know only too well, especially for real estate. To me, this model has now run its course. Given the situation in the United States and the unemployment rate, I don't see how US consumption can continue to drive the global economy.
What does this situation mean for foundations' asset management strategies?
Interest rates might remain low for quite some time. They are linked to inflation and, given unemployment and production overcapacity, we're now in more of a deflationary spiral. Therefore, and almost inevitably, to obtain a steady low-risk income, a foundation will have to accept a fairly low return on investment. Ten-year government bonds are now yielding around 3.30%. If a foundation wants to limit its risks and now jeopardise its endowment, that is the type of return it can expect. Protecting capital and aiming for a return of 5% is not impossible... it's just impossible to promise.
Investing in the SRI Fund BL-Equities Horizon
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"Combining financial return with a social impact"Joël Reuland, BL-Equities Horizon fund manager |
Is Socially Responsible Investment (SRI) a passing fad or a market with a future?
With a market valued at 2,500 billion euros, far from being a passing fad, the trend is proving its reliability as a process in terms of analysis and asset management, and the prejudices about SRI funds performing less well than traditional funds are falling away. The "responsible" aspect is even being increasingly viewed as a long-term value creator. A company that neglects its responsibility towards any of its stakeholders is exposing itself to a backlash. A responsible company will reduce its risks, even acting ahead of legislation, and we can expect this to have a positive impact on its share price in the future.
Why is SRI logical for foundations?
Investing is not a painless process: it means financing a company and supporting its decisions, its development etc. SRI means opting for an approach that backs companies which promote a more balanced world, socially or environmentally. Foundations are inherently concerned to reduce imbalances so it is therefore logical that they would want to invest in responsible companies.
Luxembourg's expertise in social finance
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"Devising tailor-made vehicles"Corinne Feypel-Molitor, Institutional Client Services, Banque de Luxembourg |
How is the perception of social finance changing?
Social finance incorporates a range of investment techniques with a social or environmental outlook. It now includes all asset classes. As social finance has developed, asset managers have been addressing it from an increasingly professional stance. The controls are stricter, and the annual reports are more reliable… This professionalisation is extremely beneficial to the supported projects which are moving away from just appealing for donations and starting to engage in genuine financial discussion. For their part, investors also get away from the idea of being providers of funds and can really engage in the idea of a serious investment in a project with social impact.
How can a foundation benefit from this type of vehicle?
First by investing its assets in a SIF or SICAR dedicated to social projects. Thereafter, a foundation that wants to finance a project could think about creating a fund with other lenders. These vehicles are regulated as investment funds by the Luxembourg control authority. They make it possible to work in the confident knowledge that all aspects of transparency or accountability are managed, and that the financial flows and return on investment are in line with predefined expectations.
Testimonials
"Banque de Luxembourg has given us the opportunity to grow together"
Tim Radjy, Alpha Mundi
AlphaMundi was created at the end of 2007 by ten associates from the world of private and investment banking. Our aim was to encourage responsible investment with a real financial return whose social impact could be accurately measured. We decided to set up an umbrella fund with subfunds that would each correspond to a project and an asset class. Luxembourg had just legislated for the SIF, which met all our requirements. In 2008, we selected Banque de Luxembourg from among other potential partners to work with us in implementing our SIF. We were impressed by the bank's commitment to making Luxembourg the leading financial centre for social investment, as well as its painstaking approach and support in developing this new product. Banque de Luxembourg offered us the opportunity to grow and develop together. It was vital for us that we did not make any mistakes: as a market creator, we have an important responsibility and any error could have a negative impact on the entire sector.
"A real understanding of the issues and challenges"
Sophie Molitor, SOS Children's Villages
We got to know Banque de Luxembourg through its philanthropy initiatives. Its excellent insight into the issues and operating challenges facing foudations and NGOs make it a leader in this field. Everyone we have dealt with has a real understanding of our needs in terms of asset management and our commitment to disadvantaged children all over the world dating back many years.
said: Stagiaire Philanthropie
@ 09:48 AM CET
