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Blackstone Group Chooses Luxembourg for EU Base after Brexit

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The Blackstone Group L.P. (BX - Free Report) is reportedly planning to establish a European Union subsidiary in Luxembourg following the Brexit mandate.

Luxembourg is the world’s second largest fund market after the U.S.  Recently, many financial services companies have chosen the nation over larger European financial centers.

Per the Chief Executive of Luxembourg for Finance, four or five asset managers are also planning to set up their operations in the nation, along with five to 10 financial technology companies and three to four insurance companies.

Without having operations in a country regulated by the European Union will make it difficult for many companies to sell their services across the region.

Blackstone currently uses “passporting” rights to sell its services throughout the European Union. The company will hire six people to oversee finance, accounting, risk and compliance in Luxembourg related to the marketing and distribution of funds in Europe, as per the financial times report. Further, Britain’s exit from EU will provide a good opportunity for the company to expand its business in the region.



Shares of Blackrock gained 17.2% over the last six months; outperforming the 11.6% gain for the Zacks categorized Financial - Investment Management industry.

Earlier this month, American International Group, Inc. (AIG - Free Report) , another leader in insurance and financial services sector, announced that it will set up an insurance company in Luxembourg.  

Oaktree Capital Group, LLC , one of the largest distressed-debt groups in the world, started listing funds in Luxembourg before the Brexit referendum.

Currently, Blackstone carries a Zacks Rank #3 (Hold)

A better-ranked stock from the same space is Apollo Global Management, LLC (APO - Free Report) , carrying a Zacks Rank #2 (Buy). The company witnessed an upward earnings estimate revision of 9.8% over the past 60 days. Shares surged roughly 37.7% over a period of one year.

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