From Governance to Scale: Closing Luxembourg’s Valuation Gap

 In Partnership With

 

Kroll, in partnership with The Association of the Luxembourg Fund Industry, surveyed 65 in-house / third-party Management Companies (ManCo) representing approximately EUR 4.1 trillion in AuM (25% of the authorized Luxembourg ManCo population) to benchmark how valuation functions are governed, operated and scaled in 2026. – the survey covers 50% of the AuM in Luxembourg, currently there are about 8.3tr AuM and we covered 4.1tr AuM EUR.

The findings reveal a market at a clear inflection point: governance frameworks are well established, but operating models are not keeping pace with the demands of scale, complexity and regulatory scrutiny.

Critically, Luxembourg is transitioning from a model of valuation oversight to one of valuation ownership, with greater accountability, expertise and decision-making expected locally.

Elena Moisei, Head of Portfolio Valuation in Luxembourg at Kroll:

“Three patterns emerge clearly: Valuation expertise is growing in Luxembourg; governance frameworks are widespread but uneven in depth; and the operating model has not yet caught up with the governance.”

Looking Ahead: From Frameworks to Scalable Models

The next phase of market evolution will be defined by the ability to close the gap between governance and execution.

From Oversight to Independent Challenge

Firms will increasingly embed true independence within valuation governance, including:

• Independent representation on valuation committees
• Greater board-level engagement with models and assumptions
• Back-testing as standard practice

From Manual Workflows to Scalable Operating Models

Operational transformation will centre on:

• Integrated valuation platforms
• Automated controls and audit trails
• Reduced reliance on spreadsheet-based processes

From Fragmented Inputs to Structured Data Ecosystems

Addressing data fragmentation will require:

• Standardization across managers, valuers and administrators
• Improved system integration (APIs, centralized data environments)
• Greater consistency across asset classes

A Critical Test Case: Stressed Markets

The lack of consensus in stressed market conditions highlights a fundamental vulnerability.

Divergence in valuation approaches when judgement is most critical increases regulatory, audit and reputational risk.

Further regulatory or industry guidance is likely. In the interim, firms should proactively define, document and defend their valuation methodologies under uncertainty.

Elena Moisei:

“The tools to scale already exist - the challenge is integration, standardization, and embedding them within robust governance frameworks.”