Expanding support for alternative UCITS hedge fund managers
SuMi TRUST Global Asset Services (GAS) has been supporting UCITS funds from its Dublin operation since 1995 and non-UCITS funds since 1990. With the growth of alternative UCITS in full swing, the firm is already extending its support to alternative managers beyond its existing (long only) UCITS platform.
According to Guy Mettrick (pictured), Head of Regulated Fund Sales Europe at SuMi TRUST GAS, the firm is currently in discussions with a number of partners to launch joint venture alternative UCITS platforms both in Ireland and the UK.
“In Ireland we have a ready made umbrella structure – trustee, management company, administrator, custodian – into which managers could position their own sub-fund. This will bring clear time and cost benefits to managers,” says Mettrick
In the UK , SuMi TRUST GAS already provides the ACD (Authorised Corporate Director) role for UK-domiciled funds – where it acts as the management company of an OEIC – through London based SMT Fund Services (UK) Ltd; a wholly owned subsidiary of the SuMi TRUST Group.
“If you’re a London-based hedge fund manager looking to set up a UK UCITS fund, but don’t want to develop all the fund and regulatory infrastructure, we can help you launch and manage the day-to-day operation of the fund. By appointing us as the host ACD we help with the development of the fund prospectus, appoint the administrator and depositary in the UK, and between us we then submit the fund prospectus to the FCA for approval. We make sure everything is in place for the manager, allowing them to run the fund and focus on delivering returns and raising assets,” continues Mettrick.
The role of the external management company is to ensure the investment manager follows the guidelines as required under UCITS and local regulation and that the investment strategy is doing exactly what it says it should be doing in the prospectus.
Mettrick confirms that SuMi TRUST GAS currently provides this host ACD for an existing client, whose fund has now grown to over GBP700m in assets. With growth in the alternative UCITS space showing no signs of easing up, SuMi TRUST is now ready to “replicate this service and offer it to all external clients managing hedge funds”.
“The UK and Ireland management company models are up and running, the next stage will be to offer the same services from Luxembourg, giving SuMi TRUST coverage in the three major fund domiciles,” confirms Mettrick.
Before thinking about launching an alternative UCITS fund,“A manager has to be clear that their strategy which has worked in the offshore world is, if not perfectly replicable, able to deliver a similar level of performance,” says Mettrick.
There are substantial costs to launching and maintaining a standalone UCITS fund. To that end, the distribution strategy is key to attract enough assets so that ongoing costs do not impact the performance of the fund.
“My advice to managers is to make sure they have good partners in place that have the necessary expertise, systems and commercial terms to support the success of their new fund. In the case of a UK fund, your chosen ACD should be one with a strong capital adequacy to match the growth of the funds under its supervision. Have a clear understanding of the fund’s objectives and speak to SuMi TRUST who can advise you on the best fund structure to meet those objectives,” concludes Mettrick.
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