In the world of fund administrators and super ManCos, one firm stands out as having a tremendous 2019, Crestbridge. Earlier this year the firm opened up an office in London and just last week expanded its jurisdictional presence by being granted a fund administration licence in Luxembourg. Fundeye spoke to two senior figures earlier.
Fundeye: What impact has the introduction and revision of the RAIF had on the ability to launch AIFs in the Grand Duchy?
Crestbridge: The introduction of the RAIF has been a clear catalyst to attract even more AIFs to Luxembourg. The RAIF has considerably improved time to market when launching a Fund in Luxembourg, as compared to previous products such as the SIF or the SICAR. Through the appointment of an AIFM it opens the way to distribution in Europe and manages institutional investors’ expectations with regard to regulatory protection.
Fundeye: Dublin is normally considered Luxembourg's biggest rival as a funds hub. Has the increasing number of AIFs being launched in the jurisdiction a signal that it is winning market share from the Irish capital?
Crestbridge: Clients we expect to be supporting for fund administration are not the liquid segment of alternatives, to which Dublin competes with Luxembourg, but generally closed-ended Private Equity & Real Estate structures which is what we are most known for. Luxembourg is one of the leading domiciles in this marketplace and we would also expect Dublin to be an attractive marketplace once legislative changes are made to accommodate these structures with an Irish LP.
Fundeye: Given there are already quite a few fund administrators in Luxembourg, what value add would cause clients to choose Crestbridge over Maitland (for instance)?
Crestbridge: We are an independent firm in a market crowded with institutional and consolidation market players who are distracted with integration, offshoring and general short termism. We reinvest 33% of our profits as opposed to cutting costs and we provide dedicated teams to clients who act as quasi-employees of fund managers, and we believe that this focus sets us apart.
Fundeye: The phrase "rent a manager" is used to describe the ManCo business sometimes. Is this a fair summation?
Crestbridge: I believe the role has evolved to another level. I would describe it more as a partnership between Managers. Whilst a third party Management Company would focus on the risk management and compliance functions, the Portfolio Manager or Advisor would concentrate on managing the portfolio and focus on performance. Both work hand-in-hand to ensure that the fund structure is managed in line with the regulatory requirements and to satisfy the investors with competitive performance.
Crestbridge currently has around EUR 120 billion assets under administration and recent client wins include being selected to provide AIFM and EuVECA manager services to the new €100m Hiro Capital fund. Crestbridge is unique among ManCos at being able to offer EuVECA management services having been awarded the license in 2015.
