Christian Mader and Ingo Gozemba, members of the management board at Hauck Aufhäuser Lampe’s asset servicing business segment, walk us through modern investment fund administration.
The multifaceted ecosystem within Hauck Aufhäuser Lampe’s asset servicing division spans three dimensions: financial assets, real assets and digital assets. Within these realms, the firm provides a diverse array of services tailored to investment management. With a primary focus on serving independent asset managers, financial service providers, institutional investors, asset managers, and investment companies, the firm primarily operates within Germany, Luxembourg, Switzerland, Austria and Ireland.
“As central administrators for alternative investment funds, our core service revolves around non-financial assets, encompassing everything beyond traditional stock exchange investments. This includes a broad spectrum of alternative investment funds,” share Christian Mader and Ingo Gozemba, members of the company’s management board.
All-in-one solution: The way forward
While the majority of their offerings originate from Luxembourg, the company introduced its German services last year. “This strategic move empowers us to serve German products directly from their home country, marking a departure from our previous operations headquartered in Luxembourg,” the experts reveal.
The company specialises in providing services to both regulated and unregulated entities, covering the entire lifecycle of funds and various financial products. This encompasses critical functions for investment funds and corporate entities, ranging from initial incorporation to NAV calculation, accounting, capital costs and related aspects. In a rapidly evolving asset management industry, the “one-stop-shop” feature positions Hauck Aufhäuser Lampe’s asset servicing division ahead of its competitors.
According to Mader and Gozemba, “Our company assists in establishing and liquidating entities using our resources and depository agents. We also collaborate with external authorised fund managers (AFMs).” Simply put, clients now seek faster NAV calculations and shorter valuation processes, necessitating a more efficient service provider.
Challenges and scopes in asset servicing
The primary challenge for clients, as highlighted by the duo, lies in the everchanging regulatory landscape across European markets. In this backdrop, they emphasise the need for increased synergies, automation, streamlined processes, and enhanced client interaction to meet investors’ demands effectively.
Institutional investors seek advanced reporting capabilities, but regulatory hurdles such as KYC requirements and Anti-Money Laundering (AML) considerations pose significant challenges, especially with new fund structures like European long-term investment funds (Eltifs) 2.0 on the horizon.
Another emerging demand area is detailed reporting, encompassing not only regulatory requirements but also additional reports for supervisory authorities. New regulatory requirements drive the need for additional data points in systems, prompting a focus on data management.
Hauck Aufhäuser Lampe achieved a significant milestone this year by introducing a fully digital, end-to-end investor onboarding KYC process in collaboration with a Luxembourg-based partner. To simplify the AML and KYC onboarding and review process for investors and meet regulatory requirements, the company provides a portal for entering data and uploading documents, moving beyond traditional questionnaires.
The firm also looks to venture into robotic AI to develop advanced data management and analytics systems. A project is underway to create a platform pass, enabling clients to access additional information from existing data.
Fund of funds encompassing underlying assets and structures, is a critical topic. The challenge lies in consolidating data received in various formats, as there is no globally standardised format for reporting. Asset managers can choose to work with service providers or explore smart solutions to extract data from different sources.
Emphasising their focus on asset servicing and central administration services, the experts stress their role as a “one-stop-shop” for fund solutions, offering AIFM, central admin and custodian services, among others.
Transformative trends
While the financial asset industry leans towards automation, the alternative side involving tailor-made solutions relies more on manual processes, the experts cite. “The key challenge is to create leaner, cost- efficient central administration services.” Managers increasingly seek access to NAV data whenever they desire, driving the need for efficient data access. To meet these customer requirements, Hauck Aufhäuser Investment Portal was also introduced this year for real asset products with the aim of transforming manually retrieved reports into an interactive presentation and analysis of relevant data.
In conclusion, Gozemba and Mader believe that “being close to clients” is at the core of catering to their needs. While custom solutions have their merits, the company also aims to offer a consistent service to all clients, facilitating a seamless experience in the ever-evolving landscape of fund administration.
