MAKING THE MOST OF UCITS IV

Client profile & objectives You are a Management Company running non-regulated (or lightly re- gulated) funds outside EU (offshore funds) which are in no case UCITS compliant.

• The business perspectives to reach investors wanting to increase their potential of return and diversify their risks but who have to respect a given regulated framework (e.g. investment limits); • The global business development perspectives given the success of UCITS across the world, especially if you have a vanilla investment policy. Objectives Convinced that having a UCITS product in your funds range could broa- den your investor base or at least maintain it (and thus enable you to remain present on a highly strategic market), you want to replicate your existing investment strategy in a UCITS compliant vehicle. • They provide security (compliance requirements in terms of invest- ment limits and concentration risks, reporting to regulators, manda- tory depositary, strong risk management processes, etc.) and transpa- rency for all types of investors; • They provide liquidity in terms of ability to redeem shares/units of funds; • They are an internationally recognised brand exported well beyond Europe, in Asia and Latin America; • Their distribution is very well organised. If a proper distribution channel is established, combined with a strong brand and the right investment strategies, the added value of your UCITS range will be better liquidity, risk management, regulatory over- sight, transparency, reporting, better access to retail investors, institu- tional investors and private banks. Indeed, UCITS funds enjoy numerous benefits. They offer all the gua- rantees that investors seek and are easy to sell worldwide:

You cover a wide range of strategies from vanilla to complex alternative investment policies, including hedge funds and funds of hedge funds.

Your investors are mainly “qualified” or institutional investors and you have built your own distribution capabilities dedicated to your products.

You may have limited share capital and wish to keep your costs variable. As such, you are keen to outsource whatever you can and run your bu- siness with tight resources. Your servicing structure is specific to the funds you manage and not com- pliant with UCITS in terms of perimeter and duties. As a fund manager, you handle the due diligence processes and the various supervision and controls inherent to the fund’s activity. You have no experience in UCITS structures but a number of business, regulatory or governance drivers encourage you to enter the UCITS market: • The lessons of the 2008 financial crisis, the increasing unpopularity of offshore funds pointed out by politicians and regulatory authorities and the growing investor demands for transparency, liquidity and protection; • A myriad of tax and regulatory hurdles existing in many European countries, which deter institutional investors from increasing exposure to traditional offshore alternative investment vehicles. Such hurdles are here to stay given the current context and the low level of sympathy for offshore funds in the public opinion;

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