Selecting the right AIFM is crucial for investment managers as they will assist with the full lifecycle of a fund. But with a wide range of AIFM services available, it can be difficult to decide which one to choose.
Stephen Hickey, Head of AIFM in Dublin has identified four key pillars you should consider when assessing AIFM providers.
What are the four key pillars you should consider when selecting an AIFM provider?
1. Specialised knowledge of your asset class
Expertise is the real benefit as the regulations around certain asset classes can be quite complicated.
If you are launching a 'vanilla' equity fund, you have a wider choice of providers and have the option of going to any of the larger AIFMs which work with a variety of fund types and investment strategies.
But if you have more specialised investment strategies, such as real estate or private equity, you should consider an AIFM with subject matter expertise and experience in working with those asset classes. They can help you in setting up efficient transaction processes that complies with AIFMD regulations. They often have more nuanced knowledge of the specific regulations in place, and the intricacies that may need to be considered before an alternative investment fund launches.
There is a huge expectation from regulators around how alternative investment funds are managed and valued and certain risk limits, investment restrictions, and asset class niches need to be considered. If an AIFM is working with these strategies and fund types day in and day out, it is more likely to offer a higher level of expertise to potential investment managers.
2. Provision of other services
There is a huge range of services which firms can provide which may include:
- Pre-marketing and marketing
- Annex IV and other regulatory reporting
- Financial statement reporting
- Investment restriction monitoring
- Risk limit monitoring
- Delegate oversight
A one-stop-shop solution for fund initiators means that a single provider can offer multiple services such as AIFM services, fund administration, and depositary services.
Ocorian, for example, has an AIFM, an administrator, and depositary licence, making us a one-stop-shop solution for investment managers and other initiators of alternative investment funds.
This helps to keep all fund related work under one provider, create efficiencies and avoid conflict or miscommunication between third-party service providers.
3. Being a key priority for your AIFM
Third-party Super ManCos may have a vast number of clients, so at times, you may not be their top priority. This industrialised approach may be suitable for large scale clients and projects and more straight forward fund strategies.
Bespoke AIFMs with a more specialised service may offer a more personal touch, prioritise your needs, and provide speedy responses to queries.
You do not want to find that your AIFM hasn't got the appropriate time necessary to service your funds and meet your regulatory needs. This can result in poorer service or even being off-boarded by the AIFM at some point.
4. Treating you as a valued partner
Choose an AIFM that you can build a strong relationship with over the long term.
Look for a client with a strong retention rate of their clients. For example, at Ocorian we have a 100% retention rate of our AIFM clients over the past 15 years.
We highly recommend that before selecting your new AIFM provider that you take the time to go conduct a thorough due diligence exercise, including meeting them in their offices and get to know the team that will be working on your business. Appointing a third-party AIFM should be viewed as a long-term relationship, so ensuring that the AIFM has the required resources, experience and technology to fulfil their requirements will lead to the right outcomes for both.
Charlotte Cruickshank, Head of Solutions and Onboarding at Ocorian Fund Services:
"The success of the long-term partnership really comes down to our clients' faith in our ability to deliver on the promises that we have made. This comes from collaboration with the client, from understanding their requirements, the needs of their portfolio and working within the parameters to deliver what we have promised."
Why are fund promoters selecting Ocorian's AIFM services?
Ocorian is a specialist provider of AIFM services to private capital alternative investment managers.
Our AIFM teams are based in Ireland and Luxembourg and have extensive expertise in managing private equity, real estate, infrastructure, and private debt funds.
By having sector specialists amongst its team, the AIFM can ensure a smooth alignment on investment processes with the fund manager and offer expertise on complex risk and compliance matters. We provide the necessary substance, infrastructure, expertise and legal documentation in place in Luxembourg and Ireland to enable the fast and efficient set-up and launch of a new fund or migration from another provider. This enables you to focus on capital raising, asset management and generating returns.
Why choose Ocorian AIFM solutions?
Responsive and dependable service
Our teams understand the importance of a responsive service and n you can rely on us to deliver an accurate and dependable service.
We work as a seamless extension of your team and tailor our services to your specific needs.
Dedicated on-boarding team
Ocorian have a dedicated solutions and on-boarding team, that take on the heavy lifting and will take the pressure off you to meet the required timeframe.
100% retention rate
We have had a 100% retention rate of our AIFM clients over the past 15 years.
Expertise in alternatives
We have sector specialists on the team, in the areas of private equity, venture capital, real estate, infrastructure and private debt funds.
Our AIFMs in Luxembourg and Dublin are staffed by specialists in AIFMD, compliance, governance and accounting. We are experienced in handling the day-to-day operations of an AIF in compliance with AIFMD and local requirements. Our AIFM teams are supported by 300+ funds specialists globally who offer multi-jurisdictional and time zone support to fund managers in the US, Europe and Asia.
Breadth of service
Ocorian is also authorised to provide fund administration services and real asset depositary services. As a result, we provide a seamless one-stop-shop solution so you can focus on delivering value to your investors.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.