SEB Enskilda has launched SEB Prime Solutions, a platform for hedge fund managers looking to launch UCITS products. The new service will launch and market the funds, as well as offering prime brokerage and custody services.
Although the AIFM Directive has continued to be delayed, the potential regulation has led many hedge fund managers to look into alternate ways to market funds. The Directive may stop investors buying into funds that are domiciled outside Europe. As a result the UCITS wrapper, an onshore investment vehicle based mainly out of Ireland and Luxembourg, has become increasingly attractive to hedge fund managers looking to market funds across Europe using platforms run by asset managers.
SEB has been working with UCITS funds and hedge funds in Luxembourg since 2004, according to Magnus Ward, head of Prime Brokerage, SEB Enskilda. We got the approval for the platform in the end of August 2010. The reason we are doing it is to offer our clients both a cost efficient and a short time-to-market to launch the funds. Previously we had more bespoke solutions.
SEB Prime Solutions is an umbrella SICAV and Newcits (hedge fund UCITS) platform, offering the necessary legal structure, risk management and administration services for a UCITS fund. It joins similar products by Bank of America Merrill Lynch, Deutsche Bank, Northern Trust and a growing number of smaller providers.
I think there are different ways of launching the funds. We are competing with self managed funds, with the stand alone platform providers and the bank owned platforms. What differentiates us from the others is being a one-stop-shop solution. We can offer the whole package from the same group, and that many of our competitors need to work with other service providers, says Ward.
Two funds will be launched via SEB Prime Solutions and a further five are expected to be added by the end of 2010 with an anticipated size in excess of 100 million.
According to June data from Eurekahedge, Newcits have grown to $100 billion, with just under 1000 funds under management.
Giles TurnerNews Editor