Navigating change: How co-sourcing is reshaping fund administration

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As fund operations grow in complexity, a hybrid model known as co-sourcing is gaining traction—especially in key European fund jurisdictions. Co-sourcing combines the strategic control of in-house teams with the operational efficiency and technology of outsourced providers. It’s a model that is becoming increasingly attractive to private capital firms facing mounting pressure around investor transparency, reporting expectations, and regulatory compliance.

In this article, Greg McKenzie and Alice Heald explore why co-sourcing is on the rise across leading fund jurisdictions, the key benefits for managers, and how different regulatory environments—such as the UK, Channel Islands, and Luxembourg—are helping shape this strategic shift.

Why co-sourcing is redefining fund operating models

Co-sourcing enables fund managers to retain control of critical functions—such as investor relations or oversight of NAV calculations—while leveraging external expertise for areas like data management, reporting, and regulatory compliance. This hybrid model offers a tailored operational structure, balancing autonomy and scalability without the rigidity of full outsourcing.

Importantly, co-sourcing is not a one-size-fits-all solution. It often suits mid to large-sized managers who already have in-house infrastructure—such as portfolio systems, experienced teams, or cross-border operational frameworks—that they want to maintain control over. These firms typically seek targeted support to supplement existing operations without relinquishing strategic oversight.

In contrast, smaller or emerging managers—who may lack built-out internal platforms—often benefit more from a fully outsourced model, at least in their early growth phases. The appeal of co-sourcing lies in its ability to adapt to a manager’s specific needs, making it a strategic choice for firms seeking a bespoke approach to operational excellence.

According to Allvue Systems’ 2024 whitepaper[1], “Co-Sourcing for Growth and Control,” 84% of surveyed private capital firms said they are planning to re-evaluate their fund administration model in the next 12–18 months—driven by a desire for greater efficiency, control, and responsiveness.

Key benefits of co-sourcing

  1. Enhanced control and strategic oversight

Co-sourcing enables fund managers to safeguard critical functions, ensuring that strategic decisions remain aligned with the firm’s broader objectives. Firms can oversee sensitive processes directly while relying on specialised partners to manage niche tasks. This approach also supports data integrity and ownership. By maintaining core systems in-house, managers can preserve a single source of truth, improve reporting accuracy, and reduce duplication. It enhances transparency, ensures consistent data flows across teams, and supports more informed decision-making.

  1. Operational flexibility and efficiency

By outsourcing only specific tasks, fund administrators are afforded greater flexibility in resource allocation. This model enables firms to optimise costs by reducing the need for extensive internal infrastructure and instead tapping into the specialised expertise available externally. It also streamlines internal bandwidth. Teams can remain focused on value-driving activities while delegating time-intensive operational workflows—ensuring the business scales without introducing bottlenecks.

  1. Risk mitigation and data security

Maintaining in-house oversight over strategic areas while outsourcing other elements enables firms to mitigate risks effectively. Co-sourcing reduces the exposure associated with full outsourcing—especially important in areas like data security and regulatory compliance—by keeping sensitive operations internal. This model also enhances regulatory responsiveness. With a clear division of responsibility and direct access to data and process flows, firms can respond to audits, investor queries, or compliance obligations swiftly—an important capability in a jurisdiction like Luxembourg.

  1. Access to expertise

In the rapidly evolving financial sector, expertise in areas such as technology integration, regulatory compliance, and risk management is crucial. Through co-sourcing, fund managers gain access to advanced skills and technologies without having to invest heavily in developing these capabilities internally. As highlighted in the Allvue whitepaper, this model provides a direct route to innovation and operational excellence, ensuring that firms remain competitive even in challenging market conditions[2]. This accelerates adoption of new technologies and best practices. It also allows firms to tap into market knowledge and innovation without losing the strategic context of their internal teams.

  1. Scalability and adaptability

The co-sourcing arrangement is inherently scalable. It allows firms to adjust the scope of services based on changes in market conditions, business strategy, or internal resource availability. This flexibility is particularly valuable for fund managers operating across multiple jurisdictions, where differing regulatory expectations and operational requirements call for a responsive and tailored approach.

Evolving fund centres and the rise of co-sourcing

Leading fund jurisdictions such as Luxembourg, the Channel Islands, and the UK are seeing continued growth in alternative asset strategies—including private equity, real estate, and private debt. This expansion brings increased operational complexity and is prompting managers to reassess how they structure their operational models.

In Luxembourg, for instance, ALFI data[3] shows that as of February 2025, net assets under management across all regulated funds and AIFs stood at EUR 7,337 billion – highlighting the scale and maturity of its alternative fund ecosystem. The Luxembourg Private Equity & Venture Capital Association (LPEA) has also emphasised the role of strategic partnerships in supporting more efficient and scalable fund operations[4].

Similarly, the Channel Islands continue to serve as a preferred domicile for private capital structures, with Jersey and Guernsey both offering substance-led regimes and strong regulatory reputations. Jersey has developed a well-respected and forward-thinking funds sector with an industry net asset value of £452 billion (as at March 2024)[5] and Guernsey’s thriving funds industry net asset value at the end of December 2024 stood at £290.1 billion[6]. Many managers in these jurisdictions are exploring co-sourcing to retain control over local oversight functions while gaining access to specialist support across reporting, compliance, and investor servicing.

In the UK, a deep base of asset managers and institutional investors—particularly in London—has driven demand for hybrid solutions that balance internal infrastructure with external expertise. This trend is especially relevant for firms managing multi-jurisdictional portfolios or operating under FCA regulation, where operational flexibility and robust data governance are critical.

Across these centres, co-sourcing is emerging as a practical and strategic way to scale operations, enhance governance, and adapt to evolving regulatory and investor expectations.

A strategic shift that’s here to stay?

As fund operations become more complex and investor demands continue to rise, co-sourcing is emerging as a key consideration for many fund managers. This hybrid approach offers managers greater flexibility, improved cost efficiency, and enhanced control over risk—while allowing them to retain oversight of core strategic functions.

Rather than being a passing trend, co-sourcing represents a long-term shift in how fund managers build resilient and scalable operational frameworks. By combining internal expertise with targeted external support, firms across jurisdictions are better positioned to meet the operational demands of modern fund structures—adapting to change while maintaining control.

How we help

At Belasko, we understand the operational and regulatory complexities that fund managers face and we’re working with clients to design and implement co-sourcing models that strike the right balance between internal control and external efficiency.

By combining our deep technical expertise with modern infrastructure, we enable clients to retain strategic oversight while benefiting from tailored support that drives scalability, resilience, and transparency.

We help clients navigate evolving regulatory landscapes, streamline operational processes, and integrate technology effectively—ensuring they remain agile and competitive in a rapidly changing environment.

If you’d like to speak to our team about building a co-sourcing solution tailored to your fund structure and jurisdiction, please get in touch with Greg McKenzie at: [email protected] or Alice Heald at: [email protected].

Alice Heald[1] Allvue Co-Sourcing Whitepaper (2024)

[2] Allvue Co-Sourcing Whitepaper (2024)

[3] https://www.alfi.lu/en-gb/pages/industry-statistics/luxembourg

[4] How Co-Sourcing Partnerships are Enhancing Private Capital Funds Operations – LPEA

[5] https://www.jerseyfinance.je/jersey-the-finance-centre/sectors/funds/

[6] https://www.gfsc.gg/industry-sectors/investment/statistics

Breaking Barriers: Women in Finance, Confidence, and Ideal Superpower!

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We spent some time sitting down with Jessica Savery, a Funds and Corporate Officer based in Belasko’s Luxembourg office to discuss some important topics relating to International Women’s Day.

Having started her career with us as an Administrative Officer, she has quickly worked her way up over the past two years. In this interview, she shares her insights on the evolving landscape for women in finance, the importance of self-advocacy, and how everyone—regardless of gender—can play a role in driving positive change.

Do you think experiences have improved for women working in the financial services industry since you started your career?

My career compared to many other women, is much shorter than them. I’ve only been working for two years now officially. However, I’ve been involved in the financial industry for going on 10 years now via various internships and participation courses at university. I think women in the industry, not only in the financial services but in the corporate world in general, have had a massive shift. This is in part due to reasons like social changes and economic changes which have allowed for more flexibility.

One thing I just wanted to like touch upon is the difference between integration and acceptance into the workplace. For decades now, women have been integrated into the workplace where we have laws and mandates saying we need a certain number of women on the board or a certain number of women in the company as a whole, whereas now, over the past five or so years, we’re seeing more of an acceptance. We’re accepting women being in the senior roles. We’re seeing more women in senior leadership. We’re seeing more female managers. We’re seeing more mentorship programmes to support and empower female future leaders.

So for me, I think over the past ten years in the financial services industry, there’s been an acceptance towards women that allows us to not only participate, but show off our strengths and get involved in a much more value-add way across different aspects of the industry.

What advice would you give to women entering the industry today looking to breakthrough and drive?

I would say first and foremost is to be your own voice, because no matter what industry you’re in, people will always try to help but realistically the only person who can really help you the most, is yourself. You have to be your own voice. You have to be your own advocate. If you know you want a certain position or promotion, work towards it and say why you deserve it. If you know that you have good ideas and you want to implement them, be confident, be yourself, speak your truth and do what you can.

On the flip side, we can’t do everything alone, which is why you need to build a trusted support network around yourself. Find a mentor, be a mentor, have colleagues that you can speak to both on a personal and professional level so that nothing gets too overwhelming and you can always have a sounding board.

How can individuals, regardless of gender, play a role in driving change?

For me, that would be many different things and there’s not one clear answer on how to do this. To be a change you don’t actually have to do something, you just have to act differently or think differently as well as to advocate for inclusivity and equality.

That’s the thing about feminism that a lot of people seem to mix up. Feminism isn’t about women wanting to be seen more or heard more. Feminism is about women wanting to be acknowledged and treated equally to men, and that’s one way everyone can be more inclusive of feminism, regardless of their gender. By being inclusive, by speaking out, by encouraging everyone to participate, regardless of their class, their gender, their views, everything.

Another thing I think is important is to stop gender biases, stereotypes, that type of thing. Naturally, I think a lot of us have pre-set conceptions on people that hold us back. For example, if we have two competent people looking to take on more responsibility in a team. One’s a boy. One’s a girl – but the girl is also a parent. Some people may naturally think, “let’s give the additional responsibility to the boy instead of the girl because they (the girl) may have additional commitments”. We need to just assume everyone’s happy to do everything. And if someone isn’t, they should be able to speak up and let us know.

What advice would you give your younger self?

Advice I would give my younger self would be to trust myself more. I would try not to give into impostor syndrome or say I don’t belong or deserve to be here. We all had to get the same qualifications, go through the same recruitment process, be interviewed by the same groups of people that end up in the company you work for. If we’ve gone through all of that and got the job, we deserve to be here, so there’s no reason to doubt yourself. That’s the first thing I would tell my younger self that everything works out for a reason. And if you put in the work, it will show.

Another thing that I would like to tell my younger self is to take more risks. Sometimes it’s not just doing as you’re told. Sometimes it’s analysing the situation. If someone tells you to do something and it’s within your power, do it, but also think what the implications of this, what’s the long-term plan of this? Is there a different way we could do this that could not only help myself but help the business and help the client?

Just stay true to yourself and take more risks.

If you had a superpower, what would it be and how would you help others with it?

If I had a superpower, it would be the ability to instantly understand and communicate in any language.

If there’s something we know for sure in Belasko, it’s that borders don’t really mean much to us, and different jurisdictions don’t mean much to us. We are an international community, who are always talking to different people on all corners of the earth. We have clients everywhere. Our teams are based across Jersey, Guernsey, UK and Luxembourg. We speak a lot of French, German, Luxembourgish and English.

If I could just understand everyone in the language or communication style that they’re most comfortable speaking in, I think it would be so useful not only for myself, but for everyone around us to feel more comfortable and avoid any miscommunications.

For me, that would be my dream superpower.

Top Five Tips for Female Allyship

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In a workplace where women face unique challenges, fostering allyship is crucial. Jasmine Le Maistre, Finance Officer in the UK, highlights five top tips for being an ally, such as listening, challenging bias, and celebrating women’s successes. Through mentorship, education, and open conversations, she encourages everyone to help create a more supportive and inclusive environment for women.

Listening

Making the time and actively listening to your female employees can enable you to learn from their experiences and perspectives. Listening to people and enabling voices to be heard allows not only personal development but a more trusting and supportive environment.

Mentorship

We highly value the importance of mentorship in the workplace at Belasko, along with building multigenerational friendships. Having a support network in place and people to turn to, who may share your experiences, enables a more comfortable workplace.

Challenge bias

Calling out any unconscious or conscious bias you witness, or harmful attitudes and behaviours enables a more supportive work environment for female employees. If you hear anything sexist or biased, you can calmly speak to the person about what they have said or walk away from the situation, if you are concerned speak to a manager. Do not promote the biased behaviour.

Education

It’s good to say to call out behaviour (as above) but what if you are unsure of what this behaviour constitutes? The key is education, research typical bias towards women in the workplace, work on identifying if you can see these items in your workplace, or identify if you have any unconscious bias yourself. Being able to provide allyship requires an understanding of the issues faced.

Celebration

The final and most fun tip, to celebrate achievements! By highlighting female contributions, successes, awards, you build a strong level of trust and respect with your colleagues. Work can be difficult, but supporting your team and celebrating the wins can definitely make it a little less difficult.

By following these simple steps, we can all contribute to a more inclusive and empowering workplace for women. Allyship is not just about acknowledging the challenges women face but actively supporting and uplifting them, creating an environment where everyone can thrive.

Author: Jasmine Le Maistre, Finance Officer, UK

Catch the spirit of International Women’s Day with Belasko!

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Ahead of International Women’s Day this weekend, we asked our employees to share the female role models who inspire them the most. From trailblazing leaders and historical figures to mothers, sisters, daughters and colleagues, their responses reflect the incredible impact that women have on our lives, workplaces, and society.

View the video here

Murielle Nya

Client Service Lead
Based in: Luxembourg

I refer to all women who have shaped our history as they paved the way for future generations and therefore all stand out as an inspiration to make the world a better place.

Jessica Savery

Fund and Corporate Officer
Based in: Luxembourg

The female leader who inspires me most is Emmeline Pankhurst for her fundamental work in the women’s suffragette movement.

Meriem Sala

Legal and Corporate Officer
Based in: Luxembourg

My role model is Christine Lagarde, a pioneering leader who has broken barriers in global finance. As the first woman to head both the European Central Bank and the IMF, she embodies the spirit of ‘who run the world, girls!’, inspiring women to lead and shape the future.

Karolina Czerwonka

Fund and Corporate Officer
Based in: Luxembourg

The female leader who inspires me is Maria Sklodowska Curie as she was the first woman to be awarded a Nobel Prize.

Callum Wilson

Senior Legal & Corporate Officer
Based in: Luxembourg

My own Mum: The embodiment of empathy, compassion, love, dedication and is strong beyond all measure.

Patti Smith: A trailblazing powerhouse who laid foundations for men and women alike to express themselves through art, music and writings.

Philippe Paul

Head of Investor Onboarding
Based in: Luxembourg

While I don’t have a specific name in mind, I would like to recognise the unknown women, those women we don’t talk about. The nameless women who deserve all the praise but never get it – so I’m taking a moment to think about them!

Peter Toft

Risk and Compliance Director
Based in: Luxembourg

I think several things make Serena Williams stand out as a role model. Firstly her work and training ethic and discipline that make her one of the greatest female athletes. But also, maybe even more, she had the mental capacity to come back after many setbacks, not only being injured but also discriminated against.

Greg McKenzie

Country Head of Luxembourg
Based in: Luxembourg

My grandmother, Estelle, is my female role model—quite possibly the hardest-working person I’ve ever known. Despite limited means, she raised five children while balancing countless responsibilities with unwavering resilience, dedication, and grace. Those values have been a guiding influence throughout my life.

Nick McHardy

Head of Fund Operations
Based in: London

Dame Judi Dench has made a massive contribution to the Arts through hard work, humility and her respect for others.

Ed Green

CEO
Based in: UK

The female leader who inspires me is Queen Elizabeth for her unflappable demeanour and for holding her own with fifteen different prime ministers.

Paul Lawrence

Group Managing Director
Based in: Jersey

Female leader who inspires me is Margaret Thatcher. She was more than just the first female UK Prime Minister, she was the longest serving Prime Minister of the 20th Century.  As a result she not only transformed the UK political landscape, she put the UK economy on a different trajectory by leading free market principles and the privatisation a number of state owned entities.  She was also a major contributor to the end of the Cold War.

She was often referred to as the “Iron Lady”, displaying the unwavering determination and resilience that would serve as an example to us all and undoubtedly served as a role model for women paving the way for many to follow her example.

Sandeep Lamba

Head of Fund Operations
Based in: Jersey

God cannot be everywhere and therefore he created my Mother. Mrs Jasbir Bholaram Lamba, my mother, inspires me with her humble take on life – to have patience, keep faith, never give up on your focus in life, maintain harmony, be God loving and always respect family and your elders. No wonder we call our home Mother Earth.

Adrian Franklin

Head of Operations
Based in: Jersey

Woman who inspires me most is Alice Franklin. Alice Franklin is my niece, and is a Graduate of the University of East Anglia. Alice has recently published her debut novel called Life Hacks for a Little Alien which is a heartwarming story about the linguistic awakening of a neurodiverse girl and her experiences in life. It is a very funny and relatable book that is a fantastic and inspirational achievement for Alice.

Liliana McDonnell

Financial Controller
Based in: Jersey

Female leader who inspires me most is Amal Clooney for her fearless advocacy!

Marylin Ajanaku

Operations Project Manager
Based in: UK

Female leader who inspires me most is Bozoma Saint John.

Alice Heald

Head of Marketing
Based in: Jersey

Female leader who inspires me most is Michelle Obama as she is a beacon of inspiration, proving that leadership is about resilience, leading by example and empowering others. A favourite quote of mine she once said is: “Don’t ever underestimate the importance you can have, because history has shown us that courage can be contagious, and hope can take on a life of its own.”

Alex Le Prevost

Associate Director
Based in: Guernsey

My female role models are my mother, wife and two daughters.

My mother for being the ultimate rock to our family through thick and thin, my wife for being a general superstar and fantastic role model to our kids and my two girls, who navigate their young lives with a smile and determination.

Hannah Dunnell

Guernsey Managing Director
Based in: Guernsey

Margaret Thatcher is my female role model, not necessarily for her policy or decisions (or shoulder pads for that matter) but because she paved a way for women being respected and accepted in senior leadership roles and exemplified the impact a female perspective can have in a multitude of situations.

Dom Rice

Manager
Based in: Guernsey

I chose my mum as my female role model because she has always inspired me by her grit and determination to tackle all life’s challenges head on.

Keeleigh Le Tissier

Senior Manager
Based in: Guernsey

I chose Hannah Dunnell (our Guernsey MD) as my role model as since I have been in the finance industry, she has always set a great example of empowering and educating women, and I would never have achieved what I have if it wasn’t for her leading the way.

Anna Robinson

HR Administrator
Based in: UK

My sisters inspire me in so many ways. Esmé’s resilience and strength drive her to do the best in everything she puts her mind to, while Amy’s hard work, supportive nature, and unwavering encouragement uplifts those she loves. Together, they remind people they are capable and worthy of anything they set their mind to, and they inspire me to be the best version of myself every day.

Georgi Krumov

Junior Accountant
Based in: UK

My mum inspires me as she has proven many times that anything is possible and your dreams can come true if you really desire it.

Kwesi Francis

CDD Team Lead
Based in: UK

I chose Dr Gladys West as an inspirational woman because her pioneering work in mathematical modelling was crucial to the development of GPS technology. Her contributions have had a profound impact on modern navigation.

Mariam Sunmonu

CDD Analyst
Based in: UK

My Mum was the true definition of a virtuous woman. She showed me how to be a great mum, supportive and loving spouse, trustworthy friend, kind & hospitable and most importantly she led me to God.

My Older sister inspires me by her act of service, her resilience through life’s challenges as a sole carer of four kids who also manages her business, she discharges her roles effortlessly. She is also very hospitable and has impeccable entrepreneurship skills. She is now my mum and my best friend.

Nassim Ait-Kaci

Junior Accountant
Based in: UK

I chose Katniss Everdeen as she embodies courage, resilience & selflessness. She defies tyranny, protects the vulnerable and sparks a revolution. Willing to die without fear, her love for her family fuels her bravery, proving that even against all odds, one voice is enough to ignite change. She inspires defiance, hope and strength!

Sugees Mahen

Head of Fund Accounting
Based in: UK

My wife is my greatest source inspiration, where she supports me 100% and doesn’t judge me for anything I do.

Join us in celebrating the resilience, strength, and inspiration of these remarkable women as we continue to champion gender equality and empowerment.

Happy International Women’s Day from Belasko!

Sharing the Load: A Win-Win for Work and Home

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Happy International Women’s Day! Let’s talk about something we all deal with—household chores and childcare. We all know that juggling work and home life can be stressful and unpredictable, and likely to end in someone crying. But the good news is: when responsibilities at home are shared more equally, everyone wins—at work and in life!

A fairer split of chores and parenting duties isn’t just good for families; it’s great for businesses too. When both partners pitch in, women can grab those well-earned career opportunities, and men get to experience the joys (and occasional terror) of full-on parenting. Plus, companies benefit from happier, more balanced employees—what’s not to love?

Luxembourg is leading by example with its fantastic parental leave policy. Each parent gets six months of paid leave, and it’s a “use it or lose it” deal—so no sneakily handing it off to your other half while you ‘focus on work.’ This means more dads are stepping up, embracing the baby-led weaning, Bluey marathons, and the art of assembling baby toys with the patience of a saint. Think of it like diversifying your investments—spreading the load reduces risk and increases long-term gains (in this case, a stronger bond with your child and a well-balanced family life).

“I feel fortunate to have had the opportunity to take parental leave for both my daughters, with each leave being tailored differently to meet the needs of my family at that specific time. It allowed me to be present for my girls while helping my wife transition back to work. In today’s world and the quest for equality, fathers stepping up for diaper duty is one small step at helping us achieve this goal – just don’t expect a few months watching Netflix!” – says John Russell, Director in Belasko Luxembourg Office

Much like investment funds, a well-balanced family strategy relies on proper asset allocation. If one person takes on all the work, you’re looking at an overleveraged portfolio doomed to collapse under pressure. But if both partners contribute equally, you get a steady return on investment—whether it’s bedtime stories, first steps, or finally mastering the art of installing a car seat without a meltdown. And let’s face it, investing time in family pays dividends that no hedge fund can match.

At the end of the day, fostering a work culture that supports shared responsibilities at home helps everyone. So, let’s celebrate progress, encourage equality, and make sure that fairness at home translates to fairness at work. After all, teamwork makes the dream work—both in the office and at home.

Author: Karolina Czerwonka, Fund and Corporate Officer based in Luxembourg


Calling All Wonder Women: Empowering the Next Generation to Lead with Strength

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The world is evolving rapidly, presenting both challenges and opportunities. Yet one thing remains certain: the future belongs to those bold enough to shape it.

This week, as we celebrate International Women’s Day, we call upon the Wonder Women of tomorrow – not the fictional heroes we’ve read about in comic books, but the real women who are breaking barriers, inspiring others, and paving the way for future generations.

It’s time for every woman to step into her power, trust her potential, and lead with unwavering strength. True Wonder Women don’t need capes or superhuman abilities. What they require is resilience, determination, and an unwavering belief in themselves. These are the women who rise above adversity, challenge the odds, and relentlessly pursue their goals.

Every woman who challenges societal norms, who refuses to be held back, and who forges her own path is a Wonder Woman. Their journeys remind us that while success is never without struggle, perseverance makes it possible.

When one woman rises, she uplifts others along the way, creating a ripple of strength and inspiration that can change the world. Empowerment is not just a concept; it is the foundation for progress. It is about equipping young women with the tools, opportunities, and confidence to believe in themselves, chase their dreams, and overcome obstacles. This is the legacy we must build—one where every girl knows she is capable of leading, making her mark, and shaping the future.

Now is the time to lead by example. The next generation needs mentors, role models, and advocates who will guide, support, and inspire them to step confidently into leadership roles. When we rise together, we create a stronger, more inclusive world where every woman has the opportunity to thrive.

This is a call to action. The world is waiting for you to step forward. Now is the time to embrace your inner Wonder Woman, to take the lead with confidence, compassion, and purpose. By doing so, you will not only transform your own life but also inspire others to do the same. Together, we can build a future where every girl discovers her own inner strength, reaches her fullest potential, and leads with the power she was always meant to wield.

And don’t forget… who run the world? GIRLS!

Author: Meriem Sala, Legal and Corporate Officer based in Luxembourg

Unlocking Luxembourg: A Strategic Choice for Private Capital Funds

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Luxembourg has cemented its status as a leading hub for fund management, particularly in the realm of private closed-ended funds. With its combination of robust legal and regulatory frameworks, international recognition, and strategic geographical advantages, Luxembourg offers an attractive proposition for fund managers looking to establish their next investment vehicle. Greg McKenzie, our Luxembourg Country Head, shares more on the benefits and opportunities this thriving jurisdiction can offer to ensure success.

The appeal of Luxembourg as a fund destination

Luxembourg, which is home to €5,840.177 billion in net assets under management as at November 2024[1], has been a cornerstone of the global financial sector for over 60 years, gaining international recognition for its stability, innovation, and adherence to high standards. It is also “white-listed” by the Financial Action Task Force (FATF), underscoring its commitment to combating money laundering and financing terrorism.

One of Luxembourg’s most compelling features is its robust legal and regulatory framework, which provides a secure environment for fund operations as well as offers unrestricted marketing opportunities into key regions like the US and the Middle East.

The country boasts an extensive network of double taxation treaties, ensuring tax efficiency and reducing the risk of double taxation on income, gains, and dividends. However, the applicability of these treaties depends on the specific legal form and tax status of the fund. Certain fund vehicles may be considered tax-transparent, meaning the tax treaties may apply at the investor level rather than the fund level. Therefore, careful consideration of the fund structure is essential to fully benefit from these treaties.

Luxembourg-based AIFs benefit from the ability to market into the European Economic Area (EEA) through the passporting mechanism provided under the Alternative Investment Fund Managers Directive (AIFMD). It is important to note that the AIFMD passport is available to AIFs managed by authorised AIFMs. This passport allows marketing to professional investors across the EEA without additional national requirements. However, marketing to retail investors or non-EEA investors may still be subject to national regulations and private placement regimes[2].

The country also offers a strategic location with strong transport links to major financial centers like London and other parts of Europe. Being in the European time zone allows for seamless coordination with global markets, making it easier for fund managers to conduct business across different regions.

Typical Fund Structures

The Special Limited Partnership (SCSp)

When it comes to fund structuring, the SCSp is one of the most commonly used legal forms in Luxembourg. Introduced in 2013, the SCSp is modelled after an ‘Anglo-Saxon’ GP/LP structure, offering flexibility and familiarity for managers accustomed to similar vehicles in other jurisdictions. Governed by the law of 10 August 1915, as amended, on commercial companies, the SCSp allows the general partner to manage the fund’s affairs while limited partners/investors participate without being involved in day-to-day operations[3].

The SCSp structure is particularly well-suited for funds, feeders, and co-investment vehicles and fund promoters play a crucial role in supporting the investment management and oversight activities, ensuring sufficient local management and control, which is vital for compliance with local regulations.

Luxembourg’s regulatory environment requires fund managers to demonstrate adequate local management and control, which may necessitate the appointment of local directors or establishing a physical presence in the country. These substance requirements are crucial for tax residency purposes and to benefit from Luxembourg’s extensive network of double taxation treaties[4]. Ensuring sufficient local substance helps in affirming that the central administration and decision-making processes are effectively conducted within Luxembourg[5].

Regulatory options in Luxembourg

Luxembourg offers two primary regulatory options for private capital funds: the Unregulated AIF and the Reserved Alternative Investment Fund (RAIF). Neither option is subject to direct supervision by the Commission de Surveillance du Secteur Financier (CSSF), Luxembourg’s financial regulator, nor do they require prior approval. This flexibility can be advantageous for managers looking to avoid the delays and costs associated with regulatory approvals. Other unregulated options may also be beneficial for funds not intended for marketing.

While Luxembourg offers unregulated fund structures, like the (SCSp) which are not subject to direct CSSF supervision, these structures must still comply with relevant laws, including the law of 12 July 2013 on alternative investment fund managers (AIFM Law), if they qualify as AIFs. This means that while the fund itself is unregulated, the AIFM managing the fund must be authorised or registered under the AIFM Law, ensuring compliance with certain regulatory standards.

However, fund managers should engage legal counsel early in the planning process to determine the most suitable structure and regulatory solution for their specific needs. Legal advisors typically assist with the drafting of constitutional documents, such as the Limited Partnership Agreement (LPA) and side letters, and provide guidance on marketing and tax considerations. This ensures compliance with local regulations and optimises the fund’s structure from a tax perspective.

Belasko in Luxembourg

Luxembourg stands out as a premier destination for fund managers looking to establish their next private closed-ended fund. With its internationally recognised finance sector, robust legal and regulatory framework, and strategic location, Luxembourg offers a wealth of opportunities for private capital fund managers and investors alike. However, its crucial to work closely with expert third party providers, leveraging their expertise in alternative investments to successfully navigate any challenges and unlock the potential of this dynamic jurisdiction.

Belasko in Luxembourg, incorporated in November 2020, has rapidly established itself as a trusted partner for Alternative Investment Funds (AIFs) in the Luxembourg market.

Our team, comprised of seasoned professionals, has extensive experience in servicing global private capital firms and investment companies. We excel in managing complex AIFs and holding structures, offering comprehensive end-to-end fund administration and corporate services.

With a deep understanding of the Luxembourg regulatory landscape, we provide a personalised, reliable, and proactive service, helping clients navigate the complexities of private capital investments with confidence.

If you’d like to speak to our team about setting up your fund in Luxembourg, please get in touch with Greg McKenzie (Country Head) at: [email protected].

[1] https://www.alfi.lu/en-gb/pages/industry-statistics/luxembourg

[2] https://www.cliffordchance.com/content/dam/cliffordchance/PDFDocuments/the-luxembourg-toolbox-A5-digital.pdf?

[3] https://www.cliffordchance.com/content/dam/cliffordchance/PDFDocuments/the-luxembourg-toolbox-A5-digital.pdf?

[4] cliffordchance.com

[5] https://www.cliffordchance.com/content/dam/cliffordchance/PDFDocuments/the-luxembourg-toolbox-A5-digital.pdf?

Where Business Belongs – Greg McKenzie & British Chamber of Commerce for Luxembourg

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MEMBER PERSPECTIVE – WHERE BUSINESS BELONGS

Our Luxembourg Country Head, Greg McKenzie, shares his insights on the impact of digital transformation in financial services and how trust, transparency, and collaboration are the foundations of long-term success.

What motivated you to join the British Chamber of Commerce Luxembourg?

Belasko joined the British Chamber of Commerce Luxembourg to engage with a dynamic network of professionals, share insights, and collaborate on opportunities that promote business development in Luxembourg and beyond. The Chamber provides a platform for fostering relationships, staying updated on key developments, and participating in discussions on the future of business in Luxembourg. As Belasko continues to grow and strengthen its presence in the region, we see the Chamber as an ideal way to support our strategic objectives and contribute to the local business community.

What is the hottest topic in your business right now?

One of the hottest topics at Belasko right now is digital transformation in financial services. We’re seeing increasing demand for more efficient, transparent, and scalable solutions that leverage technology to enhance client service. A key driver of this change is the rise of AI and automation, as clients look for smarter, automated solutions that streamline processes, enhance decision-making and provide deeper insights. At Belasko, we’re working to innovate and build on these trends, providing our clients with sophisticated tools and solutions that ultimately create more value and drive success.

What is the best piece of business advice you have received?

The best piece of business advice I’ve received is to always focus on building strong relationships, both with clients and within the team. Trust, transparency, and collaboration are the foundations of long-term success. This advice has guided my approach to leadership at Belasko, where fostering a culture of open communication and teamwork ensures that we not only meet our clients’ needs but exceed their expectations.

The Surge of Continuation Funds in Private Equity

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A new era in private equity solutions

In the evolving landscape of private equity, continuation funds—also known as GP-led secondary transactions—are experiencing unprecedented growth. According to recent data, the number of these funds grew by 48%, reaching 73, with Preqin noting 25 additional vehicles already in 2024[1]. This surge reflects a fundamental shift in how general partners (GPs) manage high-potential assets, allowing them to extend their holding period beyond a traditional fund’s lifecycle.

By moving selected assets into a continuation fund, GPs can continue executing strategic initiatives for key assets, providing a flexible solution to market demands and investor preferences alike.

Nick McHardy, our Head of Funds at Belasko, and Sam Kay, a London-based private equity funds partner at the international law firm Dechert, share their views on the growing interest in continuation funds and adoption of these fund structures globally.

Why continuation funds are the preferred choice for modern GPs and LPs

Unlocking extended value creation

A primary driver for the popularity of continuation funds is the extended runway they provide for asset management and growth. Traditional private equity structures, often capped at a 10-year lifespan, can constrain GPs from fully capitalising on the potential of high-performing assets.

Continuation funds empower GPs to continue their strategic initiatives, ultimately enhancing value for investors. In the first half of 2024, GP-led transactions accounted for $31 billion, making up 43% of the total secondary market volume[2]. This reflects a 94% increase compared to the same period in 2023, driven by strong demand for continuation funds and the adoption of GP-led structures by sponsors seeking liquidity for LPs and extended holding periods for valuable assets[3].​

Liquidity with flexibility

Continuation funds introduce a new level of liquidity and flexibility for limited partners (LPs). LPs can choose to cash out or reinvest in the continuation fund, accommodating their unique capital requirements. In Coller Capital’s 40th Global Private Capital Barometer, the demand for continuation funds remains strong, with about half of surveyed LPs planning to access the secondaries market, including continuation fund structures, within the next two years[4].

Sam Kay comments that: “We are now seeing dedicated funds being raised to invest specifically into continuation funds and GP-led secondaries, which indicates the attractiveness of these opportunities for institutional investors.  In general, LPs are also increasingly sophisticated and are able to deal with the complexity of a continuation fund transaction”.

Strengthening GP-LP alignment

Continuation funds also foster a strong alignment of interests between GPs and LPs, ensuring GPs can retain control over key assets and adhere to the original fund objectives. This continuity can reassure both existing and new investors seeking stability and alignment in asset management strategies.  As Sam Kay notes “There are a number of tools for a GP to build alignment with its investor-base.  Over a number of years, we have witnessed the increase in co-investment activity and now we are seeing continuation funds being increasingly used.  With continuation funds, there is a real sense of GPs and LPs working together to create that ‘win-win’ situation”.

Adapting to market dynamics with continuation funds

As private equity markets mature, investors are prioritising flexibility and optimised returns over longer periods. The traditional private equity model’s rigid timelines often don’t cater to the evolving demands of sophisticated investors. Continuation funds, by offering dynamic investment options, present a modern alternative that accommodates changing market conditions and investor requirements.

In Dechert’s 2025 Global Private Equity Outlook[5], 65% of respondent private equity firms noted that the increase in GP-led secondaries dealmaking was being driven by the demand for flexible holding periods for portfolio companies. The increased transaction volume in this sector reflects its growing role in private equity, as GPs and LPs seek solutions that extend value beyond the limitations of conventional fund structures.

Global adoption of continuation funds: trends and insights

Regional hotspots for continuation funds

The adoption of continuation funds has varied across regions and North America remains a dominant player with over 60% of global GP-led secondary market activity originated in the US[6]. This reflects a continued strong appetite for these deals in the region, especially multi-asset continuation fund transactions. With its mature private equity market and sophisticated investor base, the U.S. has been quick to recognise the benefits of continuation funds.

In Europe, countries like the UK and Germany continue to show significant momentum as investors embrace continuation funds for enhanced asset management and liquidity solutions. Meanwhile, in Asia, regions such as China, Japan, and India are beginning to explore these vehicles as private equity activity intensifies, driving a need for flexible investment options.

“The responses in our 2025 Global Private Equity Outlook back up these trends” says Dechert’s Sam Kay.  “It is encouraging for, globally, almost a fifth of private equity firms (17%) are expecting to increase dealmaking through GP-led secondaries over the next two years but there are regional differences: in North America, the figure rises to 22% whereas in EMEA it is 14% and Asia-Pacific it is 10%”.

Comparing continuation funds and secondary funds

Continuation funds: meeting evolving investment needs

Continuation funds mark a transformative shift in the private equity landscape. Their rise addresses a critical need for extended value creation, tailored liquidity options, and alignment with investor interests. As market dynamics continue to evolve, the strategic advantages of continuation funds are anticipated to fuel their growth, offering investors and fund managers flexible solutions to adapt to a complex investment landscape.

How Belasko can support your fund continuation strategy

As a next-generation fund administration partner, Belasko provides a tech-driven approach focused on delivering customised client solutions. Our full scope, tailored fund administration services are designed to drive performance throughout the fund lifecycle – from establishment and capital deployment to realisation and wind up, we’re the experts when it comes to streamlining your operations.

Our experienced team of 120 experts, strategically located across the United Kingdom, Luxembourg, Jersey, and Guernsey, ensures precise, professional service across multiple asset classes. With over $12 billion in assets under administration (AUA), Belasko is well-equipped to offer personalised, innovative support for your continuation fund needs.

Get in touch with Nick McHardy ([email protected]) to discuss further.

About Dechert

Dechert is a global law firm that advises asset managers, financial institutions and corporations on issues critical to managing their business and their capital – from high-stakes litigation to complex transactions and regulatory matters. Its 1,000+ lawyers across 19 offices globally focus on the financial services, private equity, private credit, real estate, life sciences and technology sectors. Dechert’s global Secondaries and Sponsor-led Liquidity Solutions team has been involved in secondaries transactions for over two decades, advising sponsors, buyers and sellers on all types of GP and LP-led transactions and liquidity solutions, ranging from ordinary course sales of LP interests, to the most complex single and multi-asset continuation funds involving significant M&A transactions, NAV facilities, preferred equity funding and structured solutions. Find out more at www.dechert.com.

[1] Preqin, “Continuation Fund Vehicles 2023 Report”

[2] https://www.blackrock.com/institutions/en-us/insights/market-update-h2-2024

[3] https://www.jefferies.com/insights/the-big-picture/mid-year-review-a-record-breaking-1h-of-2024-for-the-secondary-market/

[4] https://www.collercapital.com/40th-barometer-allocations-distributions/

[5] https://www.dechert.com/knowledge/publication/global-private-equity-outlook.html

[6] https://www.secondariesinvestor.com/gps-look-to-multi-asset-continuation-funds-for-dpi-campbell-lutyens/

Six Key Venture Capital Trends to Watch in 2025

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With 2025 activity well under-way, the venture capital landscape is poised for a dynamic resurgence, teeming with opportunities despite lingering economic uncertainties. The global venture capital investment market is projected to reach approximately $764.78 billion by 2029, with it growing from $301.78billion in 2024 to $364.19 billion in 2025[1].

On top of that, VC fundraising activity is also expected to surpass 2024 levels in 2025 with capital to be raised for this year projected at approximately $90 billion, compared with $71 billion in 2024 through mid-November[2].

In 2025, the biggest opportunities for venture capital are in transformative technologies like artificial intelligence (AI), which is dominating investment activity. While healthcare and sustainability are also attracting attention, the expansion of AI applications into these areas is further driving investment growth. Green technologies, spurred by ESG mandates and climate-conscious investors, are gaining momentum as governments prioritise sustainability goals. Meanwhile, healthcare innovation continues to attract substantial funding, with startups focusing on digital health, personalised medicine, and biotech breakthroughs leading the charge.

For VC investors, 2025 presents a year of recalibration and opportunity, where strategic investments in high-growth sectors could yield significant returns. Here we layout the six key trends that highlights how the industry is evolving and where the focus is shifting.

1. AI investment surge

At the end of 2024, venture capital investment in artificial intelligence (AI) reached unprecedented levels. VC activity in generative AI has grown exponentially since the release of OpenAI’s ChatGPT in late 2022. In 2024, this trend reached new heights with global venture capital investment in GenAI reaching around $45 billion in 2024, up from $24 billion in 2023[3]. This momentum is fuelled by the transformative potential of GenAI across various sectors, from healthcare to finance. As AI continues to innovate and find commercial applications, venture capital is increasingly pouring into the sector, marking 2024 as a milestone year in AI investment. Read more on this trend in EY’s article here.

2. The rise of mega-deals and emerging unicorns

The proliferation of unicorns—private startups valued at over $1 billion—continues to be a focal point of venture capital activity. Globally, the number of unicorns surpassed 1,200 by May 2024[4], with some hectocorns valued at over $100 billion, such as ByteDance (the Chinese company behind TikTok)[5]. However, Europe’s unicorn herd experienced limited growth in 2024. According to PitchBook, only 14 startups in Europe reached unicorn status last year, the same as in 2023 and down nearly 70% from the peak in 2022[6].

This stagnation reflects tighter market conditions and cautious investment strategies. Nevertheless, venture capitalists are optimistic about a rebound in dealmaking and valuations in 2025, particularly driven by the thriving AI sector. Many anticipate a renewed surge of European startups crossing the €1 billion valuation threshold this year, with AI companies leading the way.

3. Healthcare innovation continues to thrive

Venture capital is pouring into healthcare innovation, with startups focused on digital health, personalised medicine, and biotech breakthroughs leading the charge. These advancements are not only improving patient care but also reshaping the future of healthcare systems globally. As the sector evolves, the intersection of AI and healthcare is expected to attract further investment, offering huge growth potential for innovative startups in 2025.

4. Momentum in green technologies

Green technologies are gaining increasing momentum, driven by ESG mandates and a wave of climate-conscious investors. With governments prioritising sustainability goals, the demand for clean energy, carbon capture, and sustainable infrastructure solutions is expected to rise sharply. As the market matures, startups in these sectors are attracting substantial venture capital, offering huge potential for growth in 2025.

5. Private wealth fuelling emerging VC firms

Private wealth is becoming an increasingly vital source of capital for emerging venture capital firms. Family offices and high-net-worth individuals are allocating significant portions of their portfolios to private markets, providing a lifeline for up-and-coming VCs. This trend is expected to continue, with private wealth set to deploy approximately $7 trillion to private markets by 2033[7]. These trends underscore the evolving nature of the VC landscape, highlighting areas where innovation and investment are converging to shape the future.

6. Channel Islands offering speed to market for VC funds

The choice of fund domicile is playing an increasingly critical role in VC fund establishment, with the Channel Islands and Luxembourg leading the way. For emerging managers, jurisdictions like Guernsey and Jersey are appealing due to their simplicity, investor familiarity, and speed to market. These jurisdictions offer a lower-cost and less administratively burdensome alternative to some European domiciles while maintaining high regulatory standards.

Guernsey, in particular, remains a premier jurisdiction for European venture capital funds. Twice as many VC funds were raised in Guernsey during 2022-2023 as compared to the next most popular jurisdiction. Its appeal lies in a responsive regulatory environment, a deep talent pool, and an ecosystem that fosters innovation.

A year of renewed optimism

This year venture capital is primed for a year of renewed optimism, with transformative technologies, healthcare innovation, and green technologies leading the way. As AI continues to dominate, sectors like biotech and sustainable solutions are seeing increasing investments, driven by both global demand and evolving market dynamics. With this backdrop, 2025 could very well be the tipping point for a new era of investment-driven transformation.

As a leading fund administrator, Belasko have deep experience supporting VC managers. Our partnership-driven approach, under-pinned by leading technology, offers end-to-end fund administration solutions tailored to support your optimal operating model. Get in touch if you’d like to discuss how Belasko can support your journey: [email protected].

[1] https://www.thebusinessresearchcompany.com/report/venture-capital-investment-global-market-report

[2] https://pitchbook.com/news/articles/vc-outlook-fund-distributions-will-rebound-in-2025

[3] https://www.ey.com/en_ie/newsroom/2024/12/venture-capital-investment-in-generative-ai-almost-doubles-globally-in-2024-as-momentum-accelerates-in-transformative-sector

[4] https://www.cbinsights.com/research-unicorn-companies

[5] https://www.forbes.com/councils/forbesfinancecouncil/2024/11/19/five-critical-venture-capital-trends-to-watch-in-2025/

[6] https://pitchbook.com/news/articles/europes-soonicorns-who-will-reach-a-1b-valuation-in-2025

[7] https://pitchbook.com/news/articles/private-wealth-offers-lifeline-for-emerging-vcs