In light of the uncertainty over Europe’s alternative investment fund manager (AIFM) directive, fund-services companies are increasingly touting their wares to Asia-based asset managers that market funds to European investors.
One such provider is Bermuda-headquartered Apex Fund Services. Having launched three Ucits and/or Sicav SIF-compliant platforms last year, the fund administrator hopes to sign up as many as five Asian fund managers following its first round of marketing. Indeed, one or two are likely to be on board by the end of 2010, says Anthony D’Silva, managing director of Apex, who splits his time between Hong Kong and Shanghai.
Last week, the company carried out its first roadshow across the region, spending two days in Hong Kong and one in each of Malaysia, Singapore and Thailand. Speaking to some 40 managers, Apex found that Hong Kong firms using long/short, event-driven or macro strategies tend to find the Ucits structure suits them best, says D’Silva. Meanwhile, sharia-compliant Sicav structure are more appealing for Malaysia-based managers, he adds.
Certain Asian managers, such as Singapore's Fullerton Fund Management and Hong Kong-based Galaxy Asset Management, are already using the Ucits structure.
For Asia-based firms, the Apex platforms will allow them to launch Luxembourg funds with lower fees and have the administration work done locally by Apex in Hong Kong, Singapore or China, with Apex Luxembourg reviewing and doing the necessary regulatory filings. Apex is the fund administrator across the three platforms.
D’Silva says he expects the Apex platform to attract small to mid-size managers, which can then break off and set up their own structure once they hit, say, €50 million in assets. There are no lock-up or exit fees imposed, he adds.
“The platform’s management fees are 25 basis points per annum, so based on even a €30 million fund, that would give you enough capital [€75,000] to set up your own structure,” he says. He adds the caveat that one also has to factor in the cost of setting up a Luxembourg management company.
Setting up a stand-alone SIF or Ucits structure in Luxembourg will cost around €50,000, he says, but Apex can get a fund set up for significantly less than that.
The firm launched three platforms in June -- the Global Managers (Ucits Sicavs); LFP Prime, (Sicav SIF (non-Ucits)); and ASEP (Sicav SIF) platforms -- and has partnered with three asset managers based in London and Luxembourg. Casa4Funds is the manager for the Global Managers platform, Luxembourg Fund Partners for LFP Prime, and Amiri Capital for the sharia-compliant Sicav SIF platform.
Apex also launched the first non-bank fund-administration service in China last year.
Having a Ucits structure will open doors whatever happens with the AIFM directive, says d’Silva, because it “ticks a lot of compliance and due-diligence boxes” with regard to institutional investors in the EU. (In the worst-case scenario, the AIFM directive would prevent the marketing of non-EU-domiciled funds, such as Caymans, Bermuda and British Virgin Islands vehicles.)