INDOS Attends AIMA Next Generation Manager Forum 2024
We are delighted to be attending The Alternative Investment Management Association (AIMA) Next Generation Manager Forum in London on 23 May.
Jon Masters, Director – Head of Business Development, will be moderating the ‘Assembling the right board of fund directors’ panel discussion at 13:55.
Also representing INDOS at the event will be Abi Holland, Chief Executive Officer – INDOS Financial, and Mark Drennan, Senior Manager – Fund & Corporate Services.
The half day forum gives delegates the opportunity to hear from top industry leaders, network with like-minded professionals and gain insights into the latest developments in the financial markets. To register your interest for the event please click here.
Alternative Credit Council Global Summit 2023
We are delighted to be sponsoring the Alternative Credit Council (ACC) Global Summit 2023. In association with The Alternative Investment Management Association (AIMA), the event will take place in London on 25 October.
Jon Masters, Head of Business Development at INDOS Financial, will be moderating the following panel discussion: Investor perspectives on the value proposition of private credit. This session will explore the evolution of private credit’s value proposition from the investor perspective, including the value of private credit’s illiquidity and complexity premia, as well as the impact of changes in the macro-economic environment on the demand for private credit amongst asset owners.
Jon Masters will be joined by John Collins, Senior Director – Fund Services (JTC). If you are also attending and would like to find out more about our service offering, please contact our team directly.
The final insight from our roundtable in London looks at US hedge funds and the potential regulations from the Securities and Exchange Commission (SEC).
If implemented, these changes would represent the biggest update to private markets in the US for nearly 10 years, and arguably the most sweeping amendments to the global industry since the Alternative Investment Funds Managers Directive (AIFMD) was brought in by the European Union.
Bill Prew, Director, and Jon Masters, Head of Business Development, from INDOS Financial were joined by special guests including the Alternative Investment Management Association (AIMA) to look at the details and implications of the proposals.
If you would like to discuss the theme of this article, or any in the series, please get in touch with Jon directly.
Fuelled by growing competition for institutional mandates and investor pressure, asset managers running both traditional and alternative strategies are strengthening their corporate and fund governance practices.
In addition, regulators, including those in key offshore jurisdictions, – continue to introduce changes which enhance governance. Once deemed to be a peripheral issue for many asset managers, fund governance is now being taken very seriously.
Major markets ramp up the pressure on governance
Recent announcements by the European Commission suggest there is likely to be a stricter application of some of the Alternative Investment Fund Manager Directive (AIFMD) rules.
While caps on delegation have not materialised (thereby enabling non-EU managers to continue marketing into the EU through ‘Manco’ arrangements), it appears likely that firms leveraging the so-called ‘reverse enquiry’ route could face additional reporting requirements, as European Securities and Markets Authority (ESMA) looks to capture more information about managers who are adopting this ‘non-marketing’ approach.
Accordingly, this will require firms to ensure they have solid governance procedures in place to ensure they are not breaking any of the rules. Some firms – nervous about the implications of falling foul of some of AIFMD’s strict reverse enquiry provisions – might choose instead to build up definitive substance in the EU by appointing a Manco to manage an EU fund and avail themselves of the European marketing passport or by registering under NPPR to market non-EU funds.
The US has also recently proposed new rules designed to increase protection and transparency for investors in private funds. The Securities and Exchange Commission (SEC) is proposing, amongst other things, that private fund advisors provide regular transparency on the fees charged to investors.
The rules also prohibit certain types of charges and introduce restrictions to ensure preferential treatment is not granted to one investor over another. Some of the proposed rules will apply to all private fund advisors, regardless of whether they are SEC registered or not.
If they do come to fruition, these reforms will require alternative asset managers to implement changes to their governance and compliance procedures.
Offshore hubs make good governance a priority
Elsewhere, offshore fund jurisdictions have been introducing new rules which enhance fund governance.
Introduced in 2020, all private funds in the Cayman Islands must now register with the country’s regulator – Cayman Islands Monetary Authority (CIMA). Under the provisions, investment firms must:
appoint two fund directors
implement consistent valuation procedures
appoint a custodian to hold custodial fund assets in a segregated account
verify ownership and title of all other assets
monitor cash flows
CIMA’s rules broadly mirror some of the depositary requirements outlined in the EU’s Alternative Investment Fund Managers Directive (AIFMD) – albeit managers can perform these obligations in-house and do not need to appoint a depositary as they do in the EU.
Nonetheless, some CIMA-registered funds are now thinking about outsourcing some of these requirements to third parties to address potential conflicts of interest issues and enhance their fund governance model.
The application of these rules to private funds will help ensure the Cayman Islands continues to be an attractive domicile for funds, while simultaneously providing reassurance to end investors – many of whom will welcome the added oversight.
It’s all about governance
Once again, corporate governance and good operational process is in the spotlight.
Increasingly regulators and institutional investors are requiring firms to raise their standards focusing on key areas of perceived weakness. Firms that prioritise governance tend to be stronger businesses, and this will ultimately help managers differentiate themselves from their peers.
INDOS Financial and the wider JTC Group have expertise and solutions which enhance the governance of asset managers and their funds, including third party management company services, depositary and private fund oversight and fund/company secretarial services.
INDOS Financial (Ireland) Depositary Limited (INDOS) will provide depositary services to its Irish Investment Limited Partnership (ILP), Adit Global Growth, ILP.
It is the first ILP product to be supported jointly by INDOS and Ballybunion Capital Limited (acting as AIFM) since both companies joined JTC Group in 2021. Dillon Eustace provided legal services for this ILP.
The investment limited partnership, which will be distributed to a number of European countries and the UK, is expected to raise up to $50million.
The ILP regime in Ireland was updated in 2021 to attract increased private capital into the country with managers obtaining several benefits including tax treaties which Ireland has negotiated with various third countries.
Padhraic McLaughlin, CEO of INDOS Financial (Ireland) Depositary Limited said:
“INDOS recently acquired its specialised depositary licence in Ireland building on our leading offering for alternative investment funds. Depositaries form a crucial ongoing monitoring function for fund structures and we are very pleased to act for this ILP and to be working closely with Ballybunion as AIFM for the first time.”
To find out more about ILP developments, INDOS and the broader solutions by JTC Ireland, please contact Padhraic McLaughlin [email protected] or Jon Masters (Head of Business Development) [email protected]
