#Wealth Management #Luxembourg #Luxembourg City #Afi-Esca #SCPIs

A New Era in Wealth Management: The Arrival of Afi-Esca's Internal Collective Fund

In the evolving landscape of wealth management, Afi-Esca has emerged with an innovative solution—a new Internal Collective Fund (FIC) designed as a credible and high-performing alternative to traditional French SCPIs. This initiative enters the wealth management arena, leveraging the robust framework of Luxembourg life insurance to offer clients a modern financial vehicle.

Founded in 2014 from the merger of AFI Vie and ESCA, Afi-Esca is part of the Burrus family group, a seasoned entity in the insurance and finance sectors in Europe. With over a century of experience, the company enjoys significant recognition, especially among high-net-worth clients seeking personalized wealth management solutions. Afi-Esca provides a dynamic range of savings, pension, and capitalization options tailored for both residents and non-residents of Luxembourg, extending their reach to clients in France and Belgium by adhering to the freedom to provide services.

Addressing the Challenges of Traditional SCPIs

Amidst the challenges faced by traditional SCPIs—declining property values and restricted liquidity—the new FIC from Afi-Esca presents a refreshing approach. Rather than depending upon physical real estate, it operates on a distinct model that emphasizes a diversified array of custom-built structured products. This innovation positions the fund as fully uncorrelated to the traditional real estate market, which is increasingly seen as a burden due to its declining performance.

Operational Mechanics

Afi-Esca's FIC is structured as a fund of funds that operates within a Luxembourg life insurance contract. This setup allows investors to enjoy diversified selections of structured products engineered for reliability. Key aspects of its operation include:

• - Each contribution is directed towards bespoke structured products that target predictable returns with capital protection mechanisms.
• - Investors receive regular income through conditional coupons, usually linked to the performance of selected equity baskets or indices with carefully optimized trigger thresholds.
• - A liquidity mechanism is in place, enabling a 10% reserve for partial or full redemptions without reliance on a volatile secondary market.
• - The robust legal structure provided by Luxembourg life insurance offers international tax neutrality and ease of estate planning.

Core Objectives: Security, Yield, and Liquidity

The FIC boasts a three-pillar investment strategy aimed at:
1. Capital Protection: Advanced mechanisms are implemented to limit potential loss during market downturns, supported by robust protection barriers and multi-thematic diversification.
2. Yield Generation: A target annual yield of 7% is structured to be distributed quarterly, ensuring investors receive returns timely and consistently.
3. Liquidity Access: The embedded 10% liquidity reserve allows clients to access their capital flexibly, which is particularly advantageous within a favorable tax context.

The Advantage of Luxembourg Life Insurance

Afi-Esca's FIC is exclusively available within the Luxembourg life insurance framework, which enhances its appeal. The key benefits include:

• - The Triangle of Security ensures strict asset segregation and optimal investor protection.
• - International tax neutrality caters expertly to cross-border clients and expatriates.
• - The fund supports flexible inheritance planning, aligning with contemporary estate strategies.

Custodied by Intesa Sanpaolo WM, the FIC assumes an emblem of reliability, overseen by a team of experts specializing in structured financial engineering and defensive investment strategies.

Conclusion: A Strategic Shift for Investors

In summary, Afi-Esca’s Internal Collective Fund offers high-net-worth individuals and professional investors a secure, income-generating, and liquid investment avenue. Designed to adapt to the modern realities of the financial market—characterized by volatility, increasing tax pressures, and the demand for consistent income—this FIC represents a significant milestone in contemporary wealth management. As Alexandre Gabovich, Executive Director of Structured Products at Makor Group, states, this innovative fund not only protects capital and delivers tangible returns but also ensures flexibility within an optimized tax framework.

For those interested in exploring this FIC further or inquiring about Makor Group’s offerings and partnerships, Alexandre Gabovich is available for consultation.