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Hunting for alternative fund expertise

5 February 2019

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Alternative investment managers are trusting Luxembourg’s servicing and distribution hub like never before.

Growth in Luxembourg is being driven by the global trend to base alternative funds in well-regulated onshore jurisdictions. In addition, UK-based funds are seeking to guarantee access to investors in the EU post-Brexit. Luxembourg is reacting to these developments to maintain its place as the leading jurisdiction for connecting investors with investments.

Luxembourg’s government has eased this process by creating well-designed regulatory structures. The limited partnership regime meets the expectations of fund managers used to common-law legal systems, and the reserved alternative investment fund (RAIF) streamlines regulatory approval.

It’s working well, with an estimated EUR700bn of alternative assets under management now based in the Grand Duchy. However, such is the demand that sturdy plans need to be in place to manage this growth, especially with the latest regulatory innovation in Luxembourg, Circular 18/698, where greater attention is being paid to substance requirements and oversight.

Fully integrated service offering

“Intertrust has a policy of recruiting ahead of demand to enable us to offer the high quality services our clients expect,” explained Maelle Lenaers, Head of Legal AIFM at Intertrust Luxembourg. This has helped Intertrust’s third party alternative investment fund manager (AIFM) and fund services offering win substantial, quick interest from clients. After little more than a year in full operation the AIFM is now serving a diverse range of alternative investment funds. And this comes on top of Intertrust’s long-standing alternative fund Central Administration and Depositary services.

“An ambitious, entrepreneurial approach underpins our alternative fund servicing offering,” commented  Simon Donne, Head of Risk Management AIFM at Intertrust Luxembourg. This translates into one-stop-shop services for a wide range of investment strategies (private equity, real estate, private debt, infrastructure, fund of funds, hedge funds and more) provided by a strong fund services team, with substantial experience of the fast growing Luxembourg alternative fund industry. “We see a ‘holy trinity’: know your investors, know your distributors and know your investments,” Maelle Lenaers added.

“Our clients want to focus on their core business of managing investments, and our third party services allow them to do this while we take care of the technical, administrative and regulatory aspects,” said Simon Donne. This is particularly relevant for relatively small fund managers with less than EUR2bn assets under management. They generally don’t have the size or appetite to run these sometimes complex services in-house, but want to enjoy the advantages of having an authorised AIFM managing their fund. “We have a good spread of names; everything from big blue-chips though to firms running their first fund” he added.

Growth capacity

As well as the direct fund services they offer, the team has the backing of Intertrust’s expertise in corporate services. Thus if a fund’s strategy requires special purpose vehicles or office space, for example, they have this on-hand. The group also has a Dublin AIFM, enabling all client alternative fund strategies to be managed seamlessly within Intertrust. They offer an independent, open-architecture approach, so the client can work with the lawyers, accountants, and consultants of their choice.

“Providing high quality services at competitive costs for a broad range of alternative strategies is the focus. Flexibility is also essential to us. Clients can opt for the whole package or different stand-alone services as needed”, Maelle Lenaers commented. As for the future, they are quietly confident about further steady growth this year.

Find out more about Intertrust’s AIFM teams in both Luxembourg and Ireland here and contact the team on [email protected] to discuss in more detail.

Published on Luxembourg Times on 28 January 2019.

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