Since 22 July 2014 when the AIFMD became Luxembourg national law, a number of firms had applied to provide “third-party” services. These firms are focusing on capturing the business from the many funds (perhaps up to 1500) that will require Luxembourg substance and domiciliation but up to this point do not have permanent presence in the Grand Duchy.
It had been suggested that funds with less than 2BN Euro in assets would incur less costs opting for this model than opening their own office. However, there are proving to be more factors than just cost in the choice of using a “third party management company” (also known as a “Manco”) or not. Marc Saluzzi, current chairman of ALFI suggested that it was to do with ambition and if a fund was ambitious they would open their own office rather than use a third party. Yet there is evidence that even larger funds who would normally be described as ambitious are not all choosing to increase their presence. These larger funds will be game-changing clients for third party Mancos even if the typical fee system of 6 basis points is negotiated in a southerly direction.
The official list of AIFMs also has some intriguing omissions and the official list only tells part of the story as there are 5 subcategories of AIFMs in relation to the types of assets that may be held within the relevant alternative fund. Therefore in order to discover which Manco can be used for which asset, it is time to pick up the phone and call them!