Four Ucits funds have launched in the UK during 2016 and a broad mix; a corporate bond strategy, a UK equity fund, an ethical equity fund and a global fund of funds. We are also seeing a pick-up in interest in more closed-ended structures such as investment trusts, which can more illiquid securities more freely. One large fund migration to Luxembourg and set-up of 11 funds on our AIFMD platform and the newly introduced Reserved Alternative Investment Fund (Raif) covering private equity real estate and hedge strategies. Which are the top one or two regulations that you are most observing at present from a TPA point of view?
Client money (CASS) continues to be resource-intensive and remains a high priority for external auditors. Solvency II reporting is a regular request from external parties. The new Raif regime continues to attract a lot of interest.
CLIVE BELLOWS, HEAD OF GLOBAL FUND SERVICES EMEA, NORTHERN TRUST About how many fund launches have you supported this year and what type of strategies or asset classes has there been a trend for?
We supported over 290 fund launches in Emea jurisdictions during 2016, with increased popularity in tax-transparent structures as well as continued demand for real estate structures and other alternative asset classes. Ucits fund structures remain popular, particularly with UK, Asian and US managers. Which are the top one or two regulations that you are most observing at present from a TPA point of view?
Though not applicable until next year, MiFID II is by far the most significant, impacting all within the financial industry, with Priips also requiring substantial effort. The difficulty of effectively preparing for both is exacerbated by the fact they apply within three days of each other. How have market trends in the past year shaped the demands of your clients?
Global events are impacting our clients and their investors; however, the tangible operational impact of Brexit and regulatory change in the USA remains to be seen. Most clients have commenced Brexit planning, with many already in the execution phase for key aspects of their programmes. Our clients operate in a competitive market, and our focus remains on a partnership environment where we can help them succeed for their investors through enhanced regulatory support, new technologies and a relentless focus on quality and innovation.
SÉBASTIEN DANLOY, CEO, RBC INVESTOR SERVICES BANK S.A. About how many fund launches have you supported this year and what type of strategies or asset classes has there been a trend for?
In 2016, RBC I&TS supported the launch of nearly 200 funds in Europe, with significant growth in private equity, real asset, insurance, market infrastructure and loan funds. Which are the top one or two regulations that you are most observing at present from a TPA point of view?|RBC I&TS continues to enhance its operating platform and service offering in response to the evolving regulatory environment. Over the past year, RBC I&TS supported the launch of the first Reserved Alternative Investment Fund in Luxembourg, and developed a variety of solutions to support our clients’ compliance with the Packaged Retail Investment and Insurance-based Products (Priips) regulation. We expect the European Money Market Fund Reform and MiFID II to generate increased client interest and dialogue. How have market trends in the past year shaped the demands of your clients?
The intersection of regulatory change and technology is creating demand for ‘big data’ solutions which deliver information to end investors, regulators and fund distributors. In 2016, RBC I&TS adopted a transformational approach to technology, which has enabled us to implement several applications including Fund Sales Intelligence (FSI), which provides access to data across 23 major Ucits distribution countries and proprietary fund sales analysis. RBC I&TS is also evolving its product offering to align with the acceleration of ETF usage across Europe.
MARIE JUHLIN, MANAGING DIRECTOR, SEB FUND SERVICES S.A. About how many fund launches have you supported this year and what type of strategies or asset classes has there been a trend for?
SEB Fund Services has in 2016 successfully supported the launch of five Ucits funds, which seek to generate either capital appreciation by investing primarily in a selection of Ucits, UCIs or ETFs or to generate active returns by investing a minimum of 90% of its total net assets in equities that are listed in the Nordic Region, or to achieve maximum capital appreciation by combining long and short positions on equities that are listed on regulated markets. SEB Fund Services has also launched a Part II Aif, aiming to generate a consistent total return above the return generated by traditional investment vehicles through global investments in long/short equity strategies. The sub-fund will have short and long exposure in the equity market. How have market trends in the past year shaped the demands of your clients? The continued increase of new regulations and supervision, as well as changes in current regulations, is increasing the demand from small to mid-size asset managers to outsource parts of the business.
PHILIP T MASTERSON, SENIOR VICE PRESIDENT, MANAGING DIRECTOR, SEI INVESTMENTS About how many fund launches have you supported this year and what type of strategies or asset classes has there been a trend for?
SEI has supported nearly 40 client launches/conversions during 2016. The primary strategies involved have been related to the private equity/real estate space along with credit and direct lending. Due to interest in these more illiquid and private strategies and vehicles, we have seen a rise in demand for our electronic, workflow-enabled subscription document application, SEI Trade. Which are the top one or two regulations that you are most observing at present from a TPA point of view?
The Fatca and Common Reporting Standards regulations are in high demand from not only full administration clients, but we have also signed several large institutional clients to this service on a standalone basis. Our ongoing focus on transparency and reporting capabilities have allowed us to continue to provide regulatory services both as part of our full service offering or on a standalone basis.
OLIVIER BLANC, GLOBAL HEAD OF FUND SERVICES OPERATION, SOCIETE GENERALE SECURITIES SERVICES About how many fund launches have you supported this year and what type of strategies or asset classes has there been a trend for?
We have predominately launched alternative funds in the private equity and real estate areas, notably in Continental Europe. Socially responsible funds is another area where we have seen an increasing activity. Which are the top one or two regulations that you are most observing at present from a TPA point of view?
PRIIPs/MIFID II are the main topics we discuss with our clients. The regulatory uncertainty is a key concern, and is likely to require significant efforts in the coming months to reach the regulation’s objectives for retail investors. How have market trends in the past year shaped the demands of your clients?
Regulatory and associated reporting requirements stay on top of our clients’ demands. The Transparency challenge has been discussed for a few years, and is now a must-have with new regulations like Solvency II or Priips. In these two areas, some major achievements like the TPT/EPT standard templates have greatly improved the global framework between the asset management industry and institutional investors. By standing at the crossroads between the different players, SGSS strongly supports those initiatives.
PUNIT SATSANGI, MANAGING DIRECTOR AND HEAD OF BUSINESS DEVELOPMENT EMEA, SS&C GLOBEOP About how many fund launches have you supported this year and what type of strategies or asset classes has there been a trend for?
Globally we supported the launch of 4,500 structures, 350 in Europe. Private equity 40%, equity long/short, emerging market, global macro and multi 30%, remaining 30% focused on tailored mandates/specialist structures. Of note was the pick-up in private equity, bank loan, direct lending, insurance-linked securities and real estate structures. SS&C GO are agnostic to fund domicile and structure but looking across our client base, Cayman, Channel IslandS, Ireland and Luxembourg were jurisdictions of choice; launches in Ireland outpaced Luxembourg, with Icav structures preferred and no real take-up in the Luxembourg Raif just yet. Which are the top one or two regulations that you are most observing at present from a TPA point of view?
Learning to live with Fatca, getting ready for AEOI/CRS reporting and increased demand for Pillar III reporting of assets to support Solvency II reporting for insurance-based investors. The new BCBS-IOSCO IM and VM requirements, for non-centrally cleared OTC derivatives introduced to jurisdictions globally were also a focus. Looking ahead, MiFID II reporting, the ability to identify an end investor and the new General Data Protection Regulation (GDPR) legislation that brings restrictions and accountability on EU data flows will impact our clients. How have market trends in the past year shaped the demands of your clients?
We worked with our clients to standardise and automate the post-trade cycle process. Technology is being used to build a more scalable foundation capable of supporting multi-asset businesses managing multi-asset portfolios. There is also a big focus for improved collection, aggregation and normalisation of data that feeds the Ibor as portfolio managers rely on quicker accurate data to support decision-making and trading across global markets. Enhanced data collection, automation and standardisation helped clients adjust to shorter trading cycles and also led to quicker NAV production without any compromise to workflow, controls and governance. We continue to help our clients with technology innovation that facilitates data integration and allows them to deliver enhanced analytics reporting to investors and cost-efficient scale. Given the triggering of Article 50 by the UK government, not surprisingly there is much talk around passporting, jurisdictions platforms and mancos. As an established global provider, owning our proprietary software and technology platform that is capable of supporting complex instruments and legal structures, we are well placed to help clients deal with the challenges and complexities posed by Brexit, new products and regulations. Our clients – like the rest of the market – are waiting to see what happens next, but our platform and teams are ready.
KIM NEWELL CHEBATOR, CHIEF ADMINISTRATION OFFICER, EMEA, STATE STREET BANK AND TRUST COMPANY Which are the top one or two regulations that you are most observing at present from a TPA point of view?
We are observing Ucits V and MiFID II as top-priority regulations from a TPA point of view. Consequently, we have created a European regulatory reform program to address both Ucits V and MiFID II to understand how they affect our business and clients. How have market trends in the past year shaped the demands of your clients?
As the financial industry has grown, the demands on asset managers have intensified. A heightened risk environment, increasing investor expectations and expanding regulation are all putting pressure on managers. At the same time, digital disruption is gathering pace in the investment industry. Established asset managers and asset owners are racing to unlock new opportunities coming from the advancement of digital technologies, while confronting potential competition from a new breed of technology-driven investment firms. At State Street, we believe the industry needs a long-term vision for digital transformation that goes beyond ‘quick wins’ and simply adding the latest technologies to an existing infrastructure. Digital leaders will also bring a humanity to technology-driven transformation. They understand that value will be realised through the interaction of people and technology, to develop the most client-centric and purpose-driven approaches.
BERND VORBECK, CHIEF EXECUTIVE OFFICER, UNIVERSAL-INVESTMENT About how many fund launches have you supported this year and what type of strategies or asset classes has there been a trend for?
In 2016, asset managers and institutional investors launched about 140 new funds on our third-party administration (TPA) platform. Due to this, we’ve gained net inflows of about €25 billion and strengthened our positioning as the biggest independent investment company and TPA in German-speaking Europe. In the Ucits universe, we see that multi-asset funds or balanced funds are still in high demand. In addition, we see increasing supply and demand for investment strategies like credit debt or factor investing. How have market trends in the past year shaped the demands of your clients?
Our own Ucits fund shows significant growth rates in the recent years, also due to asset managers from abroad increasingly choose Universal-Investment as strategic partner and door opener to the EU market. This gained momentum since the Brexit vote. Due to the lasting low-interest period, we see among institutional investors a strong interest in alternative but stable performance sources, such as real assets. We have broadened our vehicle offering so now we can provide all German and Luxembourg vehicles for all asset classes. ©2017 funds europe