31 May 2021 – Irish Funds, the voice of the funds and asset management industry in Ireland, has announced it has achieved the Carbon Footprint Standard showcasing its commitment to manage its carbon footprint and achieve carbon neutrality.
The process, which will be undertaken annually, includes an assessment of Irish Funds carbon emissions and energy use and provides a roadmap to track and reduce carbon emissions ‘at source’ as much as possible and to compensate for unavoidable emissions – via carbon offsetting.
Irish Funds offset 23 tonnes of carbon dioxide, the total amount emitted by the organisation during the 2020 calendar, by supporting forest conservation projects led by the Gold Standard for the Global Goals. This a globally recognised standard to quantify, certify and maximise the contributions of climate and development initiatives toward climate change mitigation and the United Nation’s Sustainable Development Goals (SDGs).
Pat Lardner, CEO of Irish Funds commented:“As an industry, we have pledged to take action to mitigate climate change risk through sustainable finance. To provide true leadership we must also work to embed sustainability in our own operations and everyday lives. This means measuring our impact and taking action to reduce or offset our carbon footprint. These small actions add up and we are proud to work with INDOS Financial and other innovators across our network to support change towards a more sustainable environment.”
Victoria Gillespie, Head of ESG, INDOS Financial, who advised Irish Funds through the process, added: INDOS Financial established operations in Ireland in 2013 and has valued the support and guidance provided by the Irish Funds team for many years. It was therefore a pleasure to lend our ESG experience to support Irish Funds through the carbon neutral process and help them achieve this important goal. It is clear the investment industry in Ireland is increasingly embracing sustainability and ESG more broadly and we expect more firms will follow Irish Funds’ lead and become carbon neutral organisations.
The carbon neutral achievement was announced at the Irish Funds Annual Conference last week titled: “Accelerated Transformation – disruption and opportunity” which included a panel discussion on ESG – from green shoots to full bloom, highlighting the evolution of ESG as Ireland continues to build on its highly successful funds and investment management sector to become a global center of excellence for sustainable investment funds. The participants for the panel included Dr Tara Shine from Change by Degrees, Sean MacHale from the Bank of Ireland, Joanne McEnteggert from IQ EQ and Anna Driggs from ICI Global.
The net zero carbon milestone also builds on the recently launched industry Green Team Network (GTN) initiative to facilitate knowledge and collaboration on sustainability pledges and goals across fund and asset management companies in Ireland. The GTN team were the successful winners of the Grant Thornton Irish Funds Sustainathon 2020 challenge.
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Notes to Editor
Irish Funds was guided throughout the carbon neutral process by INDOS Financial. its overall carbon footprint for the period 1st January 2020 to 31st December 2020 was independently assessed by Carbon Footprint Ltd. The calculation uses the 2020 emission factors developed by the UK Government Department for Environment, Food and Rural Affairs (DEFRA) and the Department for Business, Environment & Industrial Strategy (BEIS) for reporting emissions.
Homeworking emissions followed methodology published by EcoAct whitepaper. The carbon footprint assessment includes the company’s scope 1 and 2 emissions, as well as flights and home-working emissions from scope 3 which includes – Electricity consumption, Air travel and Homeworking.
The Irish Funds Industry Association (Irish Funds) is the voice of the funds and asset management industry in Ireland. Founded in 1991, Irish Funds represents fund managers, depositaries, administrators, transfer agents, professional advisory firms and other specialist firms involved in the international fund services industry in Ireland.
Irish Funds’ more than 150 members service or manage in excess of 14,000 funds with a net asset value of €5.7 trillion. Irish Funds objective is the voice of the funds & asset management industry in Ireland, ensuring Ireland is the premier location to enable and support global investing through its reputation for trust, capability and innovation.
For further information about Irish Funds, please visit www.irishfunds.ie
About INDOS Financial
Founded in 2012, INDOS Financial has grown organically, developing solutions recognised as industry-leading within the fund oversight and depositary service space. INDOS is based in the UK and Co. Wexford, Ireland. Environmental, Social, Governance (ESG) services for the investment management industry funds have been a core focus for the firm since 2019 and INDOS has supported several managers and industry bodies such as Irish Funds to become Carbon Neutral. INDOS became a carbon neutral organisation in 2019 and in 2020 was recognised as a carbon reduced firm. INDOS also provides a range of independent depositary and AML officer services to investment funds. INDOS recently announced that it has been acquired by JTC plc, the global provider of fund, corporate and private client services. For further information about INDOS Financial and JTC plc, please visit www.indosgroup.com and www.jtcgroup.com.
JTC COMPLETES ACQUISITION OF INDOS FINANCIAL
Following regulatory approval from the FCA, JTC has today completed the acquisition of INDOS Financial, as announced in February 2021.
INDOS Financial builds on JTC’s well-established fund services capabilities and will allow the Group to offer enhanced governance and technical expertise to clients, utilising INDOS Financial’s position as an industry-leading specialist in the provision of independent fund oversight services, including Depositary, Environmental, Social and Governance (ESG), Anti-Money Laundering (AML) and Cayman Islands Private Funds.
The acquisition forms part of JTC’s ongoing strategy of blending organic growth of the core business with disciplined inorganic growth that is governed by clear acquisition criteria and supported by a strong track record of successful integration.
The INDOS Financial brand will be retained and used to demonstrate the integrity and independence of its Depositary services under the Alternative Investment Fund Managers Directive (AIFMD). More than 50 employees, including INDOS Financial founder and CEO Bill Prew and his senior management team, have become part of JTC’s Institutional Client Services (ICS) Division, with INDOS Financial becoming a JTC Group company.
Nigel Le Quesne, CEO of JTC, said:
“We are delighted to officially welcome our new INDOS Financial colleagues to JTC today. INDOS is an important strategic addition to JTC underpinned by a mix of deep expertise, commitment to service excellence and a proven ability to innovate and grow the business. We are looking forward to realising the benefits that this acquisition will bring to our clients in the near future and to providing INDOS clients with an even richer suite of global services and the full backing of the JTC Group.”
INDOS obtains fourth successive year of controls certification
Fourth successive year of Type II SOC1/ ISAE 3402 certification
Leading independent AIFMD depositary, INDOS Financial Limited (“INDOS”), is pleased to announce it has received a Service Organization Control 1 (“SOC 1”) / ISAE 3402 Type II controls assurance report from an independent audit firm for the fourth successive year.
The examination, in respect of the depositary processes and controls within INDOS and its Irish subsidiary INDOS Financial (Ireland) Limited, resulted in the issue of an unqualified opinion and zero exceptions from the independent audit firm, BDO LLP.
The report was prepared in accordance with the standards established by the American Institute of Certified Public Accountants (“AICPA”) in SSAE18 (SOC1) and ISAE3402 issued by the International Auditing and Assurance Standards Board (“IAASB”) of the International Federation of Accountants (“IFAC”).
A Type II report not only includes a controls description, but also detailed testing of an organisation’s controls over a minimum operating period.
The scope of the report covers INDOS’ operations that provide independent depositary services to 145 alternative investment funds (spanning hedge, private equity, real estate, debt, renewables and infrastructure funds), with underlying assets exceeding $35 billion.
Bill Prew, CEO of INDOS, commented “One of the most effective ways a firm can communicate information about the robustness of its control environment is through an independent service auditor’s report. The completion of our fourth annual SOC 1/ ISAE3402 examination demonstrates our strong focus on the effective operation of internal controls and procedures. Given the important oversight role played by the depositary in a fund’s governance structure, we recognise the importance of making this annual investment. We remain one of the few depositaries to provide such a report to clients.”
Varenne Capital Partners Selects INDOS Financial & Clarus Risk Partnership for Liquidity Stress-Testing Solution
Varenne Capital Partners, a leading global alternative investment manager, has chosen to leverage a partnership between its depositary, INDOS Financial, and fintech risk firm Clarus Risk, to provide a highly efficient fintech Liquidity Stress-Testing solution.
Following new ESMA liquidity stress test guidelines which came into force on September 30th 2020, this collaboration enables independent stress-testing and enhanced liquidity risk oversight while utilising connectivity now established between INDOS Financial and Clarus Risk to streamline the risk governance process.
Under the new operating model, Clarus Risk will source fund asset and liability data from INDOS Financial to generate liquidity risk metrics via its RiskMonitor® Liquidity solution which incorporates analysis of investor behaviour as well as asset risk scenarios to provide a comprehensive asset and liability appraisal in a broad and investor friendly format.
David Mellul, Managing Director of Varenne commented, “Strong risk management and corporate governance are key pillars of our responsible investment policy and our chosen independent depositary and risk service providers are now able to reinforce our risk oversight and transparency through their collaboration and the provision of regular liquidity stress testing”.
Bill Prew, CEO of INDOS Financial added “The new ESMA liquidity stress testing guidelines came into effect at a challenging time for the funds industry due to the on-going impact of COVID-19 on operations and financial markets. Through this partnership with Clarus Risk, INDOS is now able to facilitate independent liquidity stress testing for its clients in an efficient way, reducing their operational burden and enabling them to demonstrate compliance with the new requirements”.
Max Hilton, Managing Director of Clarus Risk added “The ESMA guidelines are principal based which brings subjectivity and complexity to the implementation of an appropriate solution. This fits well with our RiskMonitor® platform which is designed to facilitate client and fund specific risk reporting that aligns with the risk tolerance and underlying asset mix of each fund. This partnership with INDOS brings new operational efficiencies to the benefit of our clients”.
About Varenne Capital Partners:
Varenne Capital Partners is a process-driven, global investment manager whose purpose is to deliver superior long-term returns with the minimum necessary risk-taking. Varenne Capital Partners strives to achieve this goal by combining complementary investment frameworks – Long Equity, Short Equity, Merger Arbitrage and Tail Risk Hedging – in a single strategy. Varenne Capital Partners is based in Paris, France, where it was founded by its current management team in 2003. It operated as an advisor to VEGA Finance – private banking unit of the CDC/CE Group – – between 2003 and 2006 before establishing itself as an independent investment manager thereafter.
About INDOS Financial:
Founded in 2012, INDOS Financial has grown organically, developing solutions recognised as industry-leading within the fund oversight and depositary service space. As of December 2020, client assets under oversight had grown past $35 billion. INDOS also provides a range of independent AML and Environmental, Social, Governance (ESG) services for funds. INDOS recently announced that it has been acquired (subject to FCA regulatory approval) by JTC plc, the global provider of fund, corporate and private client services.
About Clarus Risk:
Clarus Risk was formed in 2011 to provide independent, first-class Managed Software as a Service (MSaaS) fintech solutions for the investment fiduciary marketplace. Clarus Risk’s award-winning risk analytics and reporting technology generates fully customisable risk and regulatory risk reporting solutions.
Cayman Islands Asset Segregation Rules – Providing solutions to the Cayman Funds industry
In July 2020, the Cayman Islands Monetary Authority (CIMA) published a Rule on the Segregation of Assets. Regulated Mutual Funds under the Cayman Islands Mutual Funds Law are required to ensure that:
The financial assets and liabilities of the funds are segregated and accounted for separately from the assets of any service provider;
With some permitted exceptions (around rehypothecation of assets), none of a fund’s service providers use assets to finance their own or any other operations;
Policies, controls, and procedures are established to ensure compliance with the segregation Rules, and which ensure a fund holds title to assets and a record of those assets is maintained;
A service provider is appointed with regard to ensuring the safekeeping of the fund assets. Service provider is defined as “an administrator, auditor, custodian, investment advisor, investment manager, operator, prime broker, promoter or registrar”.
Over the past few months, INDOS has observed many fund Boards and managers grappling with the question: How do we demonstrate compliance with the new Rule?
In many situations, a fund will already have appointed a number of service providers, such as the fund administrator, depositary, prime brokers, custodians, auditors and so on, and there are many checks and balances in place which the fund Board can take comfort from as part of the fund’s overall compliance with the Rule.
This is particularly the case where an independent depositary is appointed and performs on-going monitoring and oversight over the fund’s cash flows, the NAV process including asset ownership verification. It is another example of how a fund can leverage one regulatory requirement (for example the AIFMD depositary requirements) to meet another regulatory requirement (the Asset Segregation Rules), thereby taking a smarter and holistic approach to regulatory compliance.
INDOS has created a Segregation of Assets Rule Compliance template which considers the roles performed by existing service providers and enables fund Boards to document how their fund complies with the Rules.
We have produced this as part of our service for a number of INDOS depositary clients and we are pleased to make it available broadly for the benefit of the Cayman funds industry to adapt and use for the specifics of individual funds.
We would be pleased to share the template with interested parties. Please contact [email protected].
More details on the Rule and CIMA Q&A can be found here:
