Funds Europe talks to Maitland’s Kavitha Ramachandran about the firm’s AIFMD services and the post-implementation challenges of the new directive.
Maitland has operated in Luxembourg since 1976 and will shortly be celebrating its 40th anniversary in the European Duchy. The company was primarily a legal, tax and fiduciary firm before client demand led to its adding fund administration to the business model. More recently Maitland has established itself as an AIFM to service clients in the wake of the new Directive for the alternative investment market.
“We have a fund administration arm, a risk management process and governance structure but we also have a legal services arm which is quite unique among fund administrators,” says Kavitha Ramachandran, senior manager, business development and client services at Maitland. “This means we can help our clients to set up their funds as well as manage the ongoing administration.”
The license for the AIFM, which was awarded in May 2014, covers hedge funds, fund of funds, and is currently being extended to include private equity and real estate. Maitland has also set up an AIFMD-compliant Specialised Investment Fund (Sif) platform as an umbrella with multiple sub-funds. “So clients have two choices – they can set up their own fund and appoint us as their AIFM, or else they can use the platform and a sub-fund on a white label basis.”
Maitland has onboarded a number of clients with several more AIFs currently going through the approval process. This is a mix of clients with stand-alone fund entities using the former option and having their sub-fund on the platform.
Now that the Directive has been fully implemented in Luxembourg, the focus has turned to reporting. One of the biggest challenges to result from Annex IV reporting is extracting all the various data required. For example, Maitland has had to work across three different systems (for hedge funds, fund of funds and private equity and real estate respectively) to extract the data and then add risk data and combine it into a report.
Making this process standardised and streamlined was a clear priority, says Ramachandran. “Among the fields that need to be populated, there are sections for static data that we won’t have to repeat. More challenging was the risk reporting, but the data that comes from our own fund administration platform has been fully automated and is now ready for the next reporting cycle.”
In addition to the lessons learned about information gathering and putting data into the system, there is also now greater clarity around some of the fields and a greater experience of working with other regulators in domiciles like Malta and Ireland that should make filing the next series of reports an easier experience for all involved, says Ramachandran.
It will help clients to look beyond the intense work needed to ensure compliance and see the long-term benefits that the new regulation will bring, says Ramachandran.
“We have all come to grips with the regulations now. There were early worries from clients about the cost and the work involved but now they are starting to see the benefit of compliance in terms of marketing, brand and governance.”
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