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DMS Governance – Best Offshore Regulatory Advisory Firm

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“We’ve been busy in our core operations providing professional independent governance services to the alternative investment funds community. This has involved providing holistic solutions to our clients across multiple different business lines,” comments Daniel Forbes pictured), Executive Director and head of DMS in New York.

Historically DMS solely provided professional independent directorship services, registered office services and board support services. These were, and remain, its three core services. However, post-financial crisis, DMS looked at the market and considered where its clients would most need its help in 10 years’ time. That has led DMS to really expand its suite of governance, risk and compliance services. 

“For example, the fastest growing business we have is DMS Bank & Trust (DMS Bank). This is a specialist bank based in the Cayman Islands that focuses exclusively on providing banking, custody, trade ex and cash management solutions to hedge funds, fund of funds and private equity funds,” says Forbes. 

Typically, smaller fund managers struggle to get banking relationships and if they do it tends to take a long time to open accounts, which can impact the manager’s speed to market. Post-crisis, many larger financial institutions chose not to serve the smaller end of the market. That is where DMS Bank made a real difference. 

“We have banking relationships in place with BNY Mellon in New York and State Street Global on the custody side. We are an aggregator and allow clients to get access to a range of cash management products, FX products and so on. It’s a very attractive solution for emerging managers. They are getting access to global financial institutions that they otherwise wouldn’t get,” explains Forbes.

The firm’s largest office is in the Cayman Islands, with approximately 130 people, while in New York there is now a team of 10 people. “There is a strong relationship management component to what we do here. We have senior directors sitting here in New York. Most board appointments we are receiving these days from the US will include an onshore component. Traditionally, the model was to appoint a director to the offshore feeder fund. Now, the market has realised the value in mirroring that directorship appointment to the onshore fund as well. This gives the manager equivalent professional independent governance on both their offshore and offshore structures. 

“Our New York-based directors are seasoned industry professionals. They have a hands-on relationship with clients, who appreciate this consultant-based approach,” outlines Forbes. 

The growth trajectory at DMS has extended to Europe where it has offices in Ireland, London and Luxembourg. The catalyst behind this expansion was the introduction of the AIFM Directive.  

“We are recognised as the most substantial outsourced AIFM in Europe. We have some very large independent asset managers and global institutions that rely on us for outsourced management company services,” says Forbes. 

With so many compliance obligations facing managers today, having a trusted partner who can support them effectively, in whichever market they operate, is imperative.

In Ireland, specifically, DMS is in a highly unique position in that it has three regulatory licenses – UCITS, AIFMD and MiFID – to provide regulatory hosting solutions. 

“This is very beneficial to non-EU managers who have managed account business in Europe,” says Forbes. “From January 2018, onwards, non-EU groups who have managed account relationships in Europe will be required to have a MiFID authorised entity sitting in the middle of those relationships; something similar to AIFMD where non-EU managers need to have an authorised AIFM in place.” 

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