The recent event at Malta House on 11 June 2015, hosted by the Malta Business Network proved to be a great networking opportunity for its attendees. Not to mention the chance to speak up close and personal to Professor Joseph Bannister (pictured), Chairman of the Malta Financial Services Authority (MFSA), the island’s financial regulator.
The event was organised by Derek Adler, ACSI, a director and founder member of International Financial Administration Group (‘ifina’) – a firm that provides turnkey fund services to managers via its Primary European Fund SICAV.
Reflecting on the event, Adler comments: “I am so pleased that I seized the initiative to organise this event, as it was a great opportunity to bring the regulator to a core group of Investment Managers. Not just any regulator but the Chairman of the MFSA and a colleague, the Director in charge of supervision. It enabled managers to assess the opportunities that are available in Malta in a very informal atmosphere. It also allowed managers to talk directly not only to the regulator but also to a custodian bank as well as the chance to speak amongst themselves after the speeches.”
“From our point of view we have spoken about Malta with a few different advisers,” says Gilly Uppal, Partner, CedarKnight Investment Management, a London-based hedge fund that aims to capture price arbitrage and which runs strategies akin to those at proprietary structuring desks.
To hear people’s views on why Malta is a jurisdiction that managers should consider versus another jurisdiction, be it for setting up a fund or looking for a licensed position, proved beneficial says Uppal, adding:
“Having been to events before, whether it’s to listen to presentations on Luxembourg or Ireland, they are often huge events; very dynamic, highly populated, big presentations. The Malta House event was smaller (and more intimate) and as such we found it helpful. It’s not very often you get direct access to the chairman of a regulatory body, to whom you can ask questions.”
The event, ostensibly, was aimed at start-ups and managers with less than EUR200 million in AUM to gain real, practical insights into establishing Maltese regulated funds.
Arlyn Arquello is the Business Development Manager at Finex LLP, a management company that specialises in trading multi-asset futures and options portfolios. They actually chose Malta to domicile their UCITS IV Navigator Fund when it launched in 2013.
That said, Arguello said that it was a welcome opportunity to network with people who were thinking of selecting Malta and share her insights.
“We’ve done business in Malta and set up a fund there, it was good to have conversations with other fund managers and share our experiences first hand. We were asked about service providers and what the overall environment was like in Malta compared to Luxembourg or Ireland,” says Arguello. “Also, from the documents we were sent by the MFSA and Sparkasse Bank after the event, we now have a list of custodian banks that could be useful to us moving forward. There are a couple of names on the list that we weren’t previously aware of.”
Malta has focused its efforts in recent years on really appealing to the start-up manager space; a wise tactic given the costs of setting up UCITS funds in larger European jurisdictions, or proceeding down the AIFMD path. By maintaining its PIF regime, Malta is able to cater for managers small, and established, with a competitive cost structure.
But as Arguello points, there is always room for improvement, and in that sense Malta is no different.
“I think Malta is heading in the right direction but it still needs to attract more alternative fund managers and strategies on the UCITS front,” notes Arguello.
According to Uppal, if CedarKnight did decide to establish a fund entity or a separately regulated business in Malta it would need to assess and consider “buy-in” from its key investors and banking counterparties.
“These are the two most important relationships for us. It’s all an education process and in my view Malta needs to be higher up on the lobbying front in the market. You can attend a Luxembourg or Ireland event every few weeks,” comments Uppal.
“For us it was good to just understand what it is that Malta is trying to achieve and what the island’s ambitions are as a fund and/or manager domicile. Where the larger European jurisdictions might price out smaller managers, Malta fills that gap and that fits our philosophy; we’re not seeking to be the biggest manager, we’re a niche manager trying to pick up opportunities that banks are vacating or bigger managers aren’t pursuing.
“So for CedarKnight it was a great opportunity to ask some face-to-face questions rather than just listen to a forum,” reflects Uppal.
Currently, Finex LLP is focused on raising assets for its existing UCITS fund, which has a capacity of EUR500 million according to Arguello.
“After that we have plans to launch a discretionary fund, if things go well with this fund, there’s no reason why we shouldn’t choose Malta again. Since Malta is a small place, key people are easier to find with the potential of dialogue so that’s positive. We’ve reached out to the MFSA before but this was the first opportunity we had to talk to them in a more relaxed environment,” comments Arguello.
Any managers wishing to find out more about establishing a hedge fund in Malta can contact Derek Adler by visiting the following address: [email protected] or visit http://www.ifina.com.
