The Evolution of ManCos
2009 - UCITS IV
Permits a management company authorised in an EU member state to passport its services to other member states
2012 - CSSF Circular12/546
Formalised the authorisation, organisation and governance structure of Luxembourg management companies
2013 - AIFMD
New regulation for managing alternative investment funds in the EU
2017 - ESMA
Opinions on substance requirements for EU-regulated entities in the context of Brexit
2018 - CSSF Circular 18/698
New rules for Luxembourg management companies
2020 - 3rd party ManCos have become sophisticated ...through the provision of solutions enabled by Next-Gen technology: ONE.
The Evolution of Investment Funds: A Regulatory Obstacle Course
When looking at the regulatory environment for investment funds, it is sometimes difficult to see the forest for the trees. The drive from regulators to implement new rules governing fund management has been relentless. For Luxembourg-based investment funds, two regulatory trends over the last years stand out: on the one hand, the so-called passporting of services such as fund management, oversight, and distribution (refer to the UCITS IV flag above) has brought some welcome harmonisation and flexibility across the EU member states. On the other hand, the complexity of rules and regulations applicable to the industry has increased at a dizzying pace (refer to CSSF Circular 18/698 above). Third party Management Companies are uniquely positioned to take advantage of both.
Economies of scale ensure higher quality
Smaller asset managers in particular find it difficult to deal with the increasingly complex regulations of investment funds. Acquiring the necessary know-how in this area and keeping it up-to-date is time-consuming and costly - and thus ties up resources that would otherwise be available for the core business. This also applies to the necessary provision of substance for fund structures. It therefore often makes more sense to concentrate on your own area of expertise and leave the remaining tasks to a partner whose core competencies is fund governance, regulatory compliance, and distribution support – and you can maximise the benefits of the passporting opportunities.
Access to best market practise
A third party management company not only ensures that all regulatory requirements are met and that fund administration, risk management and compliance functions are performed and overseen, but thanks to its deep knowledge, it also offers best market practices supported by technology, time-to-market for fund launches, as well as an established environment of service providers.
The NextGen third party management company will guide you through the regulatory obstacle course and will complement your core competence with efficient regulatory governance solutions.
We operate around the principle that if our people have a stake in the business, they will do a better job for our clients. We have a committed and stable team, as they see the benefit of long-term value creation through building long-standing relationships. We build value for clients, and their end customer.
You can have the best technology and the most efficient processes in the world, but if you don’t have the people to operate them, your business is worth very little. Thus, our biggest asset is our team of professional and passionate experts.
We operate next generation technology through a combination of in-house, and best in market solutions to deliver an impeccable service and use technology to excel in both service delivery and efficiency.
We delight in valued long-term partnerships with clients, team, industry partners and our stakeholders. We aim to work with clients who share our belief in the importance of building strong partnerships over time.