Funds Europe talks to Euroclear’s Vincent Clause about the firm’s FundsPlace platform, which is positioning to be a transformative infrastructure within fund distribution.
Euroclear launched its FundsPlace platform almost 20 years ago, originally as a trade execution and custody platform. Since then, Euroclear has made a series of investments to develop FundsPlace as an end-to-end platform for distribution, trading, custody and data, covering all fund types, such as mutual funds, ETFs and alternatives/private funds. The platform also connects all industry players, including distributors/investors, asset managers/promoters, and transfer agents.
This was made possible by “transformative investment” from Euroclear, says Vincent Clause, global head of funds strategy and product expansion at Euroclear. Euroclear made a series of acquisitions: MFEX in 2021 to provide distribution capability; Goji in 2023 to support the company’s entry into private market funds; and Iznes in 2023 to drive Euroclear’s digital ambitions.
“We are in an industry where the appetite has gone beyond mutual funds,” says Clause. “Players want exposure to multiple asset classes and fund types. As a global market infrastructure, Euroclear FundsPlace’s objective is to offer solutions across the full spectrum – i.e. mutual funds, ETFs and private funds.”
FundsPlace has also sought to expand its physical presence.
“We have a local presence in 21 locations and can cope with market specificities in France, Nordics and the UK,” says Clause. “We want to provide a solution for the entire funds industry so that they can access all of these markets from a single location with the full value proposition,” says Clause. “The vast majority of funds are in the Dublin/Luxembourg cross-border market, but it is key for our global coverage that we can cover strong domestic markets like the UK, Nordics and France.”
Lowering the total cost of ownership
Another focus for FundsPlace is lowering the cost for end investors through technology. “Everyone in the industry accepts that the total cost of ownership (TCoO) is too high,” says Clause. “The market is too fragmented and the technology is getting old. We truly believe that new technology is the key enabler to address those pain points. We see the transformative power of AI, digital and DLT.”
The acquisition of Goji and the entry into private markets is built on developing a centralised digital process to ease access to, and distribution of, private funds. But it is also about investing in digital data solutions, says Clause.
“For distributors and fund promoters, they can see investors’ preferences to inform their business development while investors can see the performance of their funds. It also fits with the Euroclear group’s overall ambition to be a data-driven, digital financial market infrastructure.”
Another technology angle that could prove relevant is DLT, says Clause. “We need to mutualise processes in the chain and DLT is one of the technologies that can enable this.”
He points out that Euroclear launched a solution called D-FMI, which leverages DLT for securities issuance.
“We want to explore this further in the funds which is why we invested in Iznes,” says Clause.
It remains to be seen just how transformative DLT will be for the funds industry and how quickly DLT will be adopted, but Euroclear needs to play an active role, says Clause.
“To make it work, we need an ecosystem of players, from fund managers to investors, with a neutral party within the fund distribution process acting as the operator of the solution. That is where we see ourselves.”
