Putting technology to the service of alternative fund managers
The grand duchy’s ambition to extend the scope of its fund industry following implementation of the AIFMD has been boosted by the arrival of technology-led alternative fund administrator SS&C.
New vista for alternative funds
Although Luxembourg has long been home to hedge funds and funds of funds, private equity and property funds, in the past alternative investments have been overshadowed by the UCITS fund business that has made the grand duchy the world’s second largest fund domicile. But the Alternative Investment Fund Managers Directive, which imposes greater regulation on managers targeting European investors, increases the attractiveness of EU fund domiciles – like Luxembourg, which adopted the directive just in time for its entry into force on July 22, 2013. The country’s credibility as a service centre for alternative funds was boosted in 2013 by the establishment of a Luxembourg office by SS&C, a specialist administrator of hedge funds and other types of investment structure.
Meeting client and regulatory demand
SS&C Technologies chairman and CEO Bill Stone sees Luxembourg as a key market for existing and future clients that manage hedge funds, funds of hedge funds and private equity structures, and that are increasingly looking for local service in fund domiciles. The Luxembourg office, headed by Nick Curwen, offers fund administration and middle- and back-office services including fund accounting and reporting, share registry and transfer agency, and investor communications. It offers independent portfolio and OTC derivative valuations, risk analytics and aggregated web-based reporting. The broad scope of these services matters because of the AIFMD’s reporting obligations to both investors and regulators. Increasingly alternative fund managers are looking to administrators and other service providers to help them meet the new requirements.
Technology at the service of investment
GlobeOp was established in 2000, at the start of the boom that turned hedge funds from a cottage industry to a global business managing well over $2trn in assets. It was acquired by Windsor, Connecticut-based financial software specialist SS&C in 2012. Drawing on the expertise of its parent, SS&C exploits technology to give it, and its clients, a competitive edge, including cloud-based computing and mobile services – it has just launched voice recognition capabilities allowing clients to obtain information or carry out functions on the move. As such, the company straddles two of Luxembourg’s key economic priorities, consolidating its role as a fund services centre, and attracting the IT-led business of tomorrow.