An AIFM that speaks your language

 

Article published in Luxembourg Fund Services, 2017 Special Report (november)

Read the article online

 

Fuchs Asset Management SA is a familyowned group located in three jurisdictions: Luxembourg, Belgium and Switzerland.

It has roughly 160 people and operates five different business lines: wealth management for UHNW individuals, family office services, brokerage of life insurance products, trading execution & support via its dealing desk and third party management company services.

With regards to the third party ManCo, Fuchs Asset Management sits plum in the mid-market and looks to partner with entrepreneurial fund managers eager to grow their business.

As CEO Timothe Fuchs explains, at present there is a barbell effect happening within the market. At one end of the scale, some large financial organisations are choosing to acquire ManCos to secure a foothold in Luxembourg. “Usually what you see is those providers want to offer the whole set of services – a one-stopshop – to their clients: fund administration, depositary services, prime brokerage, and AIFM services.

“At the other end of the spectrum you have very small AIFMs with just a few people trying to develop their business.

“Where we come in is to support the mid-market. We have five independent companies having specific knowledge in asset management. That is our core focus. In this environment, we want to offer clients specific expertise and a tailor-made service,” explains Fuchs.

Previously, everybody was competing in the same space. But as AIFMD further beds in, a degree of market structure is evolving.
Those wishing to have a specialised AIFM  that is more closely aligned to their business needs know where to look.

“We are typically concentrating on those mid-sized managers with an entrepreneurial mindset who are looking for a partner in a similar way to what we see with family offices. We are the conductor of the orchestra in terms of supporting our clients under AIFMD as the appointed AIFM,” says Fuchs, who thinks further re-structuring in the asset management industry will continue as a result of regulation. You need to have the knowhow to survive and grow, says Fuchs, confirming that “our group is well positioned, we are recruiting new talents to expand our knowledge.”

Most of Fuchs Asset Management’s clients are fund managers already running specific strategies with specific investors that are looking to launch regulated (SIFs) or light touch-regulated products such as the RAIF or SLP. They want to benefit from the passport but they do not want the burden of running their own management company.

“They might be big enough (in terms of AUM) but once they have their own ManCo they will probably concentrate 80 per cent of their time managing people, managing the regulation and compliance, managing delegates, etc. Whereas they should only need to focus on two things: portfolio management and servicing investors.

“We share a common mentality and we take care of the day-to-day running of the management company activities on behalf of clients who appoint us as the third party AIFM,” says Fuchs.

He believes the one-stop-shop model is good for a certain type of client who only wants to work with a single service provider to handle everything. But there is a real conflict of interest in doing this.

“In my opinion, Asset Management is a specific industry with a specific knowledge, that is not linked to administration, accounting or safekeeping,” concludes Fuchs.