Mindful Wealth, an Asset Management company with around US$600 million under management, has successfully completed the VCC Pilot Programme with the Monetary Authority of Singapore (MAS) and re-domiciled one of its funds, Avenida CLO Equity Fund, from the Bahamas to Singapore. MAS has recently introduced a new Variable Capital Companies (VCC) framework to provide a new corporate structure for investment funds which seeks to facilitate the co-location of fund managers’ substantive fund management and domiciliation activities in Singapore. VCC is constituted under the Variable Capital Companies Act. After MAS launched the VCC framework, it has been running a pilot programme for selected Permissible Fund Managers who wished to register a new investment fund as VCC or re-domicile a foreign corporate entity as a VCC.
“It is a great honour for Mindful Wealth to be part of the VCC Pilot Programme. It gives us first-hand information on the new fund structure and the authorities we have been dealing with are very helpful and professional. We see this as an opportunity to grow our business and look forward to exploring different options with fund managers and clients.”, said Marco Frangi, CEO at Mindful Wealth.
“With this new legal framework in place, investment managers will have greater operational flexibility in the constitution of funds in Singapore. We have been working closely with the regulators since the beginning and we are among the few pioneering experts in this structure. With our Fund Platform, we can help relocate and re-domicile funds from other offshore jurisdictions to a fully regulated and high standard jurisdiction like Singapore, therefore opening up new opportunities to new and existing funds.”, he added.
“The VCC marks a significant chapter in the development of Singapore as a full-service international fund management and domiciliation hub. The VCC framework provides fund managers with a greater choice of investment fund vehicles in Singapore that caters to the needs of global investment funds and investors. Fund managers will also be able to extract cost savings from centralising their fund management and domiciliation activities in Singapore and structuring their funds more efficiently. The VCC framework also creates new opportunities for Singapore-based fund service providers such as legal and tax advisors, accountants, fund administrators and fund custodians, as we expect more fund managers to use the VCC to structure their investment funds,” says Benny Chey, Assistant Managing Director (Development and International) at MAS in a recent announcement by MAS.
Mindful Wealth’s flagship fund Avenida CLO Equity Fund was launched in March 2016 and is managed by Massimo Paschetto Alberto De Micheli and Stefano Paschetto. It has around USD80 million under management and is one of the few funds globally that focuses on the equity tranche of CLOs. It is available for investment with a low entry value, making the fund greatly accessible. The Avenida CLO Equity Fund has seen rapid growth in its AUM as well as great performance since its inception. As of the end of December 2019, the fund has returned 32,37 per cent since inception.
”There is a bright future for the Avenida CLO Equity Fund, as CLOs are a relatively unknown sub-asset class, meaning the market is ripe for the discovery of a niche solution to a difficult global low rate environment. With over 20 years of experience in the CLO business, possessing a unique knowledge of the CLO market and having established relationships and direct access to CLO managers, professionals and structuring banks, we have selected over 75 different primary transactions before setting up the Avenida CLO Equity Fund, generating an average mid-teen absolute return for the investors through consistent investment and risk management processes,” says Massimo Paschetto, Senior Investment Manager at Mindful Wealth & Fund Manager at Avenida CLO Fund.
“Singapore is well-known for its transparency in governance, strict laws and regulations, economic stability and high level of business ethics. For Avenida CLO Equity Fund to be in Singapore, it signals a good reputation to investors and we are sure this helps to grow our AUM. The VCC model introduces a level of operational efficiency that can improve the efforts of fund managers to maximise investment opportunities. We are delighted that Avenida is part of the new model,” says Alberto De Micheli, Principal Representative and Senior Financial Advisor at Mindful Wealth.
