Pharus Management explores the potential of AIFM Directive

Swiss manager Pharus Management is planning to offer risk management services for Ucits-compliant Sicavs in the wake of the July 2013 deadline for implementing AIFMD.

In July this year, the company launched Pharus Management Luxembourg SA, a Luxembourg-based company set up to work on new provisions introduced by the Alternative Investment Fund Managers Directive (AIFMD).

The new company also incorporated Pharus Sicav, which manages 18 funds with hedge, long/short equity and market neutral strategies with assets of about €210m, which is registered for sale in Italy.

The aim of the new firm is to offer risk management services for Ucits-compliant Sicavs, specialised investment funds and alternative funds, which under the new regulation will be required to implement new control mechanisms by July 2013, or to outsource them to an external management company.

In this framework, Pharus Management Luxembourg will act as manager, sponsor, risk manager and global distributor.

Sicavs in demand

Luca Zampana (pictured), head of Institutional sales at Pharus Management, tells InvestmentEurope that after signing up with two Sicavs, Pharus is ready to extend its services to six other clients.

The launch of the new firm comes as financial markets regulators are implementing stricter risk-control mechanisms.

“After the financial crisis, the authorities are now requiring existing self-managed Sicavs and new starting Sicavs to have an independent management company as the entity responsible for the activities and for the control of the different players involved,” he says. “Self-managed Sicavs have asset management services and administration under the same entity, which creates possible conflict of interests.”

In this new legislative scenario, funds managing more than €100m leveraged or €500m unleveraged, will needs to establish daily routines for risk, compliance and portfolio monitoring, often outsourced to an external management company.

Pharus will offer a full solution to both Ucits and Ucis funds, implementing its technology and specialised human resources in risk, compliance, marketing and business development.

This includes the origination of Sicav, management company for Ucits and Ucis, risk management for committed and var approach, compliance, pre-and post-check and middle-office services for insurance products and for institutional and private customers.

“We are already working with two Sicavs and we have received at least other six requests, of which two over €500m of assets,” Zampana adds, hinting at the possible business growth over the next months.

Pharus’ fees vary depending on the complexity of the products, and they are calculated on the assets and on growth prospects for the business.

This aims to attract new clients also thanks to an ‘all in costs’ fee structure. “The formula means that we do not charge new costs after the first implementation. We can offer a competitive fee because we heavily rely on technology,” he adds.

The directive

The final text of the Alternative Investment Fund Managers Directive was published in July 2011. Its aim is to create a comprehensive and effective regulatory and supervisory framework for alternative investment fund managers within the EU.

Since the date of publication of the first draft in April 2009, the scope and content of the directive has been the subject of much controversy and debate. EU Member States have to implement the directive in local Member State law by 22 July 2013.

Its scope is broad, capturing the management of alternative investment funds or AIF, (most vehicles that would be regarded as funds, as well as vehicles that one might not think of as a ‘fund’ at all).

Managers of AIF, otherwise known as ‘AIFM’, who are established in the EU will require authorisation.

Source: Linklaters

 

 

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