In recent years, international players specialising in the valuation of financial assets have expanded their dedicated valuation capabilities in response to the growing demand for alternative investment strategies. A genuine ecosystem in Luxembourg, based on both human expertise and the adoption of new technologies, is taking shape and now offers a wide range of services to financial operators. This evolution reflects a broader shift within the alternative investment industry: valuation is no longer a peripheral or purely technical function, but a critical control point underpinning governance, transparency and investor confidence.
These decisions to deploy valuation activities are largely explained by the growing weight of alternative investment funds (AIFs) domiciled and managed from Luxembourg. Since the entry into force of the AIFMD in 2013, Luxembourg has experienced rapid growth in these asset classes and has become a key European hub for alternative funds. Today, they represent EUR 2.812 trillion out of total assets under management of EUR 7.952 trillion for all funds domiciled in the Grand Duchy. This strong growth of alternative assets has, over time, exposed Luxembourg-based teams to a broad range of structures, strategies and market conditions, contributing to the accumulation of specialised expertise.
Calculating the value of these diverse illiquid portfolios requires advanced technical know-how, as well as heightened vigilance around transparency, documentation and independence. “When I started in the valuation business more than twenty years ago, operations were carried out in a very informal manner,” recalls Christophe Vandendorpe, Strategy & Transaction Leader at EY Luxembourg. “We really began to see stronger requirements following the introduction of the AIFM Directive, and over the past five or six years they have increased significantly.”
As President of the Luxembourg Valuation Professionals Association (LVPA), created in 2022 and a member of the International Valuation Standards Council (IVSC), Vandendorpe confirms the rapid professionalisation of an activity whose importance was long underestimated. “Twenty years ago, Luxembourg did not have a single full-time valuation expert. It was a secondary activity. Today, there are around 200 professionals in the financial centre, and the number of people specialising in this field is increasing very rapidly.” Since 2024, the LVPA has also expanded its certified training programmes, reinforcing the skills base required to support a growing and increasingly diverse market.
“We really began to see stronger requirements following the introduction of the AIFM Directive.”
Independence and credibility
For many years, financial asset valuation was largely the domain of the Big Four and accounting firms. Many asset managers continue to perform valuation activities internally, which remains possible provided that valuation is clearly segregated from portfolio management and risk control. However, evolving market practices and supervisory expectations are driving a growing interest in specialised firms offering external expertise and responding to heightened demands around transparency and robustness.
Headquarted in New York, Kroll (formerly Duff & Phelps), a global independent valuation services firm, has expanded its footprint to Luxembourg. It employs around ten experts and operates as a centre of expertise for the valuation of portfolios composed of private equity, private debt, infrastructure and venture capital assets. Elena Moisei, Managing Director and Head of Kroll Luxembourg and member of the Business Valuation Board of IVSC, attributes the rising demand for independent expertise to increased market volatility and growing structural complexity of investments. “In-house valuation remains possible, but the demand for external valuation, as well as the level of scrutiny, has clearly increased from regulators, investors and auditors.”
From her perspective, Luxembourg’s role goes beyond scale alone. Taking into account the size and diversity of the fund industry and the broad range of key functions, AIFM, administration, audit and depositary banks,“Luxembourg is a natural candidate to become Europe’s ‘portfolio valuation hub.’ This is all the more true since teams based in the country are exposed to a high volume of cross-border transactions and a wide diversity of assets, which fosters unique know-how in Europe.” Luxembourg’s position is further reinforced by its leading role in hosting ELTIFs: 60% of European ELTIFs (147 out of 249 at the end of 2025) are registered in the country. “These semi-liquid funds require more frequent valuation operations and explain the growing weight of this activity,” Moisei emphasises.
“Luxembourg is a natural candidate to become Europe’s ‘portfolio valuation hub’.”
The expansion of alternative and semi-liquid funds is not the sole driver behind the growth of valuation activities in Luxembourg. Regulatory initiatives aimed at strengthening investor protection have also played a central role in shaping practices. The concept of “fair value”, designed to reflect the economic reality of portfolio performance, has become the reference standard, and investors are increasingly attentive to how asset values are determined and monitored.
Originally from Peru, Alejandra Gonzales has spent the past decade in Luxembourg and joined Vistra Fund Management in 2018. Recently appointed as a conducting officer for Valuation and NAV Oversight, she plays a central role in valuation governance within a well-established third-party AIFM, following Vistra’s attainment of SuperManCo status in early 2025. Alejandra notes that demand for robust valuation capabilities has increased significantly in recent years, driven by both regulatory and operational expectations. Key milestones include the CSSF’s Circular 18/698 “That Circular was important in clarifying governance requirements and reinforcing the separation and independence of portfolio management, risk and valuation functions within AIFMs. In parallel, ESMA’s Common Supervisory Actions on valuation, launched in 2022 with findings published in 2023, have increased supervisory scrutiny. Together, these developments have pushed managers to strengthen their valuation models, controls and governance frameworks.”
Beyond compliance, these frameworks have contributed to the operational maturity of valuation activities in Luxembourg, embedding them more firmly into the day-to-day operating models of AIFMs and service providers.
The indispensable technological support
Across the alternative funds industry, the growing scale, complexity and frequency of valuation exercises are driving a broader shift towards more industrialised operating models. Advanced technologies have become essential to ensure consistency, auditability and control across large and diverse portfolios, particularly where valuations must be performed more frequently and under heightened regulatory and investor scrutiny.
According to Alejandra, this evolution requires that “valuation teams combine advanced technical expertise with a strong command of both local regulation and international valuation standards.” She also notes that technology now plays a critical supporting role in managing volumes of data, documentation and modelling assumptions, allowing valuation professionals to focus on judgement and analysis rather than manual processing.
This market-wide trend is also reflected in the approaches adopted by specialised valuation firms. Founded in 1996, Value & Risk is a long-established European independent valuation specialist offering valuation solutions across all asset classes, including complex and illiquid assets. Headquartered in Frankfurt, with an office in Luxembourg, the firm supports institutional investors, AIFMs and custodians across Europe with valuation frameworks.
“Valuation teams combine advanced technical expertise with a strong command of both local regulation and international valuation standards.”
The firm employs more than 30 senior valuation professionals in Frankfurt and Luxembourg and, as part of its governance framework, does not offshore or outsource its valuation activities. “European regulation places high demands on valuation governance, documentation and independence,” explains Charles Dequaire, Managing Director Luxembourg. “Our approach combines experienced valuation specialists with a proprietary, technology-driven infrastructure designed to ensure consistency, scalability and audit readiness,” adds Fabian de Keyn, Head of Valuations. “This allows us to support complex portfolios efficiently while meeting the expectations of European regulators, auditors and investors.”
To support its activities, the firm has developed its own IT platform to scale valuation processes through automation. AI is used in particular to detect anomalies in price movements and to support automated document analysis. “It does not replace human expertise; it enhances it,” the two executives insist, pointing to the importance of combining technological infrastructure with experienced professional judgement. “The profession is entering a new era, one of industrialisation and multidisciplinarity,” they conclude. “The future will belong to players capable of combining deep financial expertise, robust technological infrastructure and impeccable governance.”
As asset classes grow more complex and expectations around transparency increase, valuation practices continue to evolve in response to regulatory standards, investor scrutiny and operational demands. In this context, the experience built up in markets with a high concentration of alternative funds and complex cross border structures, such as Luxembourg, provides a useful reference point for how valuation activities are adapting to the changing requirements of modern fund management.
“The profession is entering a new era, one of industrialisation and multidisciplinarity.”