Advisers will be able to create their own funds in a matter of weeks with the launch of a new Luxembourg-based platform by KMG SICAV SIF.
The platform can support all asset classes including funds, private equity, derivatives and real estate and there are no leverage restrictions.
It has been designed to give advisers greater control over client’s assets in one place; allowing them to move large sums of money quicker. It will also give them European and international distribution capabilities.
Funds can be established in a few weeks, rather than the six months to a year it would usually take if an adviser was working by himself, and can be branded with the company name.
The funds will come under SIF laws (established in February 2007) which are aimed at well-informed investors so the level of protection is not as high as would be required for retail funds.
An adviser would need to provide KMG SICAV SIF with the requirements of the fund he wants and all other services will be provided including back office support, administration and even distribution if KMG feels the concept is a unique one. Transfers within the fund are designed to be cost effective and advisers can choose their own brokers.
For advisers unsure about their ability to make the investment decisions, KMG is licensed to be their manager or they can contract out.
Advisers can use the platform for client assets invested through wrappers such as SIPPS or held on wrap platforms. They also may choose to establish sub funds within the main structure which would allow them to tailor portfolios to fit the needs of different client groups.
The platform was founded by Kevin Mudd, who has over 25 years offshore experience in managing client assets, building companies and advising clients. He says around 30pc of UK advisers would look at establishing their own funds.
“They want to control the process and be a manager and distributor. In these difficult times, their own fund would allow them to respond quickly and get all their clients’ assets out of high risk areas for example. The platform simplifies the administration process and gives added value to clients.”
The platform has already attracted interest from UK and international IFAs, businessmen and fund managers eager to move to alternative arrangements.
Charges are a set up fee of euros35,000 and then 1pc per annum running fee. Advisers would be free to set their own charges for clients invested in the fund including a performance fee option.
The platform is targeted at advisers, wealth managers, fund managers, family offices, high net worth individuals and entrepreneurs and is available now.
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From 6 April 2019