Funds Europe talks to senior figures in Europe’s predominantly private equity-based specialist third-party administration industry. Plus, facts & figures for the firms that took part in our survey.
ALTER DOMUS
ROBERT BRIMEYER – CHIEF EXECUTIVE OFFICER
What will be the major regulatory or legislative developments of 2018/19 that will impact the domicile you work in and what effect will those changes have on your business?
As with most companies, one of our current challenges is the GDPR legislation, which became effective on May 25, 2018, bringing considerable changes to data protection laws across the European Union. We continue to support our clients with emerging regulatory changes such as SEC reporting, transparent fee reporting, and complying with the ever-increasing reporting requirements and deadlines all over the world.
What impact do you anticipate Brexit will have on your business?
Generally the trend we are seeing is asset managers relocating to either Luxembourg, Ireland or other financial centres such as Paris and Frankfurt. Alter Domus is located in all major jurisdictions across the globe so overall, we see a minimum impact on our business and only one of real opportunity as we are the leading fund and corporate services firm in Luxembourg.
What figure, statistic or industry development have you found particularly interesting over the past year and why?
The alternative investments industry has been evolving rapidly over the last couple of years and the asset servicing industry is set to grow at 7% CAGR between 2016 and 2020 and then 5% between 2020 and 2025 in line with the asset management industry growth. Alter Domus has been outgrowing the market… and given that the market is still showing a nice growth trend over the next years, we are very bullish about our future growth.
Alter Domus
5, rue Guillaume Kroll
Luxembourg
L-1882
Tel:+352 4818 281
Email: [email protected]
Web: www.alterdomus.com
Country of origin: Luxembourg
When founded: 2003
Number of employees: 1,800
Total assets under administration: €189 billion
Total assets under administration in Europe: €94 billion
Senior executives: Laurent Vanderweyen (Luxembourg),CEO; Robert Brimeyer (Luxembourg), COO ; George Rologis (Luxembourg), regional executive Emea and group head corporate development – strategy & M&A
Prevalent legal structures: SIF; RAIF; SCSP; SCA
Main external regulatory reporting provider: N/A
APEX FUND SERVICES
JOHN BOHAN – REGIONAL MANAGING DIRECTOR
What will be the major regulatory or legislative developments of 2018/19 that will impact the domicile you work in and what effect will those changes have on your business?
GDPR will be the single biggest impact in our business for 2018/19.
What impact do you anticipate Brexit will have on your business?
We are hedged and agnostic jurisdictionally given we have presence in each of the EU states. What is lost or gained in one jurisdiction will have inverse impacts in another so we are well hedged as a group.
What figure, statistic or industry development have you found particularly interesting over the past year and why?
Over 30% of all funds launching in Europe are launching through European ManCos. The growth in this sector has continued to impress and the capabilities of these SuperMancos is shaping the industry and accelerating greater distribution models.
Apex Fund Services
20 Reid Street
Hamilton
HM11
Bermuda
Tel+1 441 292 2739
Email: [email protected] Web: www.apexfundservices.com
Country of origin: Bermuda
When founded: 2003
Number of employees: 1,200
Total assets under administration: €70 billion
Total assets under administration in Europe: €22 billion
Prevalent legal structures: Luxembourg SIF; Irish Ucits ICAV; Irish QIAIF ICAV; Luxembourg RAIF
Main external regulatory reporting provider: N/A
Senior executives: John Bohan (Dublin), regional managing director, Europe; Paulianne Nwoko, (Selima), managing director, Malta; Gareth Williams (Luxembourg), managing director, Luxembourg
CUSTOM HOUSE GLOBAL FUND SERVICES
Custom House Global Fund Services Limited
Smart City Malta, Level 4, Ricasoli,
Kalkara
SCM1001
Malta
Tel+ 356-22582100
Web: www.customhousegroup.com
Country of origin: Ireland
When founded: 1990
Number of employees: 200
Total assets under administration: €24 billion
Total assets under administration in Europe: €2.5 billion
Senior executives: Mark Hedderman (Ireland), CEO; Helen Breen (Ireland), CFO; David Barry (Malta), COO
prevalent legal structures: multi-strategy; private equity; fund of funds; equity, long/short
Main external regulatory reporting provider: MFSA
MAITLAND
KAVITHA RAMACHANDRAN – SENIOR MANAGER BUSINESS DEVELOPMENT & CLIENT MANAGEMENT
What will be the major regulatory or legislative developments of 2018/19 that will impact the domicile you work in and what effect will those changes have on your business?
GDPR, SFTR.
What impact do you anticipate Brexit will have on your business?
We expect this to be positive for the business as we provide a UK domestic solution as well as a continental European one.
What figure, statistic or industry development have you found particularly interesting over the past year and why?
The number of RAIFs established.
Maitland
58, rue Charles Martel
Luxembourg
L-2134
Luxembourg
Email: Sarah.ussher
@maitlandgroup.co.za
Web: www.maitlandgroup.com
Country of origin: Luxembourg
When founded: 1976
Number of employees: 1,100
Total assets under administration: €239 billion
Total assets under administration in Europe: €25 billion
Senior executives: Steve Georgala (London), CEO; David Kubilus (London), head of business development, client management and marketing; Kavitha Ramachandran (Luxembourg), senior manager business development and client management
Prevalent legal structures: Luxembourg SIF; RAIF; SCSP; SCA
Main external regulatory reporting provider: KNIEP
SANNE
SEAN MURRAY – MANAGING DIRECTOR, ALTERNATIVE ASSETS, EMEA
What will be the major regulatory or legislative developments of 2018/19 that will impact the domicile you work in and what effect will those changes have on your business?
The Common Reporting Standard (CRS) was developed by the Organisation for Economic Co-operation and Development (OECD) and allows for the automatic exchange of tax and financial information on a global level. Two groups of countries have now implemented the CRS through the signing of Multilateral Competent Authority Agreements and inclusion in statute. Enforcement of CRS varies by jurisdiction. The penalties for non-compliance vary from fines to imprisonment, from six months up to three years.
Sanne has the necessary expertise to undertake CRS obligations for Financial Institutions in all participating jurisdictions, having already filed successfully with those authorities that elected to adopt the standard early, including United Kingdom, Cayman Islands, Jersey, Guernsey and Luxembourg and Ireland.
What impact do you anticipate Brexit will have on your business?
As a global leader in financial services, Sanne is well placed to manage the impact of Brexit and other major issues facing the industry. As a listed business, we are a global service provider, which shelters us from certain uncertainties faced in particular countries. Regardless of current global economic uncertainties, we see many exciting opportunities ahead.
What figure, statistic or industry development have you found particularly interesting over the past year and why?
One trend we are certainly seeing is around growth in funds in the ETF space. We are interested to see why there is a global move towards more passive investment management, rather than active management. We have noted that managers are placing significant emphasis in this area, as they seek to capture additional investor flows. We have seen this through flows into ETFs as well as smart beta strategies.
The returns of actively managed funds have been less than stellar over the past 18 months, and the move to passively managed funds has in large been driven by cost optimisation, which has led to the downward pressure on management fees. We have noted a downward pressure on the median of management and performance fees that are charged.
SANNE
13 Castle Street
St Helier
JE4 5UT
Jersey
Tel: +44 (0)1534 702159
E-mail: [email protected]
Web: www.sannegroup.com
Country of origin: Jersey
When founded: 1988
Number of employees: 1, 200
Total assets under administration: €240 billion
Total assets under administration in Europe: €140 billion
Senior executives: Martin Schnaier (London), chief commercial officer; Zena Couppey (Jersey), managing director – client services; Sean Murray (Luxembourg); managing director, alternative assets – Emea
Prevalent legal structures: Luxembourg; Dublin; Jersey; Mauritius
Main external regulatory reporting provider: n/d
SGG (SA)
JUSTIN PARTINGTON – GROUP FUND SOLUTIONS LEADER
What impact do you anticipate Brexit will have on your business?
SGG has operations in a number of European jurisdictions such as Luxembourg, Amsterdam and France, which are becoming good domicile options for a number of funds, asset management companies and banks relocating from the U.K., as well as for several major insurers from the United States.
If you take Luxembourg, for example, there are a number of big names which have chosen this jurisdiction as their new EU hub, including the insurance giant American International Group Inc., private equity firm Blackstone and the asset managers M&G Investments.
Luxembourg, Amsterdam and Paris are all seeking to leverage upon its expertise and its strong position in the financial industry to secure access to the European market for those firms.
When it comes to future prospects, the shape of the future trading relationship between the UK and the EU remains to be seen, and whether there will be any degree of access to the internal market, or what other arrangements will be in place. This is why it is difficult at this stage to foresee mass and rapid relocations from London to the continent – whether to Luxembourg, Amsterdam or elsewhere – since the negotiations are complex and still have some way to go.
In terms of what we have seen in Luxembourg over the last 15 months, I would not say that it is a mass exodus from London to this or that location, but rather a targeted relocation of certain activities.
Taken together, I would say that these developments suggest that there will be continued interest in using Luxembourg as a platform, both from UK fund managers and wider market players, as Brexit becomes a reality.
What figure, statistic or industry development have you found particularly interesting over the past year and why?
We have witnessed an appetite for impact investment from asset managers. Sustainable investment is not just a trend but a way of doing business, The European Commission is now considering whether asset managers and institutional investors can be further encouraged to ensure sustainability when taking decisions. For instance, a public consultation was launched at the start of the year, which invites the industry and wider stakeholders to offer their views on how ESG factors could be incorporated into decision-making. This shows that this will take on even more importance in the future.
Institutional clients are also pushing for AIFM services and are either increasingly in-scope of AIFMD or are opting in as a marketing tool due to the global growth of AIFMD as a brand.
This is leading to an increased number of management companies and depositary services alongside traditional fund administration. We have seen a steady growth in Luxembourg, the Channel Islands and the Cayman Islands among institutional clients. The Channel Islands and Cayman, which are experienced in operating as non-EU jurisdictions, are helping managers distribute in the EU via the National Private Placement Regime (NPPR).
Regulated funds are not in strong demand. Investors want a regulated manager and a reputable jurisdiction, though are more relaxed about regulating at the fund level, which is helpful as it increases the risk-based approach and reduces some administrative burden and cost.
SGG (SA)
412F, route d’Esch
Luxembourg
L-2086
Luxembourg
Tel: +352 46 61 11 1
E-mail: [email protected]
Web: www.sgggroup.com
Country of origin: Luxembourg
When founded: 1953
Number of employees: +825 (following completion of acquisition of First Names, the number of people will be 1,700)
Total assets under administration: €203 billion
Total assets under administration in Europe: €45 billion
Senior executives: Serge Krancenblum (Luxembourg), CEO; Christiaan van Houtven (Luxembourg), COO; Justin Partington (Luxembourg), group fund solutions leader
SS&C GLOBEOP
PUNIT SATSANGI – MANAGING DIRECTOR AND HEAD OF BUSINESS DEVELOPMENT EMEA
What will be the major regulatory or legislative developments of 2018/19 that will impact the domicile you work in and what effect will those changes have on your business?
AIFMD and MiFID II are in operation and no major overhauls are expected, though there will be ongoing requirements for more data – Esma/SFTR reporting from 2019. Since 2010 we have invested in regulatory reporting solutions for Annex IV, Emir reporting and other reports such as Form PF/CPO-PQR. We are well positioned to help our clients meet new requirements. GDPR will bring a big change in how we communicate with investors and connected parties. There will be less email and a move to secure messaging via our portal as this offers transparency with controlled access to data.
What impact do you anticipate Brexit will have on your business?
There are a range of possible outcomes and we stand ready to support our clients. If the delegation model changes and there is a need to migrate to regulated platforms or convert funds to new jurisdictions, we already have the infrastructure, knowledge and experience to help our clients plan and implement asset, jurisdiction and reporting changes.
What figure, statistic or industry development have you found particularly interesting over the past year and why?
An increased focus on active investment management and a move away from passive lower-cost strategies. The current investment environment seems to play to the strengths of the hedge funds – should mean more flows into alternatives and new fund launches.
SS&C GlobeOp
St Martin’s Le Grand
London
EC1A 4AS
United Kingdom
Tel: +44 (0) 20-3310-3000
E-mail: [email protected]
Web: www.sscglobeop.com and
www.ssctech.com
Country of origin: US
When founded: 1986
Number of employees: 8,300+ (excluding DST aquisition)
Total assets under administration: €1,285 billion
Total assets under administration in Europe: n/d
Senior executives: Rahul Kanwar (New York), executive vice-president of SS&C Technologies Holdings, Inc. and head of SS&C GlobeOp; Ian Holden (London), managing director and head of SS&C GlobeOp Emea; Punit Satsangi (London), managing director and head of SS&C GlobeOp business development Emea
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