FARAD has a solid history in Luxembourg of providing the management of funds, insurance policies, and private accounts. Previously, the management company was meeting prospects and coordinating projects. However, when the ManCo was sold, the company realised they had an opportunity and a need in the market.
“We realised that if we meet clients who want to launch a fund, we could help them, really to work as a project coordinator, to advise them as to what is the best solution, and find for them the best third-party providers: a complete package.”
The idea made sense. FARAD I.M. is already well-known in the market, and they have a wide network of counterparties with whom they work, which is ideal when a client has a project to launch. FARAD I.M. got in touch with different parties such as management companies, custodian banks, lawyers, and fund administrators, and they began to develop the idea to make it a project.
“We presented ourselves and asked which services they offer and if they were interested in having us present them as a provider to our customers. We discussed the conditions, such as minimum assets one needs to work with them and fees, and we started to build a database.”
Now, when a prospect comes with a project, FARAD I.M. has real value to add to the process and can suggest and advise on a range of providers and structures. If a prospect is interested, they move on to the next step, which is to plan the project and launch it. At the end, when the project goes live, FARAD usually plays the role of investment manager, but the full-service investment manager can also be provided on a stand-alone basis.
Another part of FARAD I.M.’s reshaping is to offer expanded support to insurance companies. Since 2015, regulators have allowed a new type of insurance product, the Fonds d’Assurance Spécialisé (FAS). In this, a policy holder does not need to pay an investment manager just to have an initial allocation and make some switches during the life of a policy. Clients can place orders for themselves, yet some of them, often high-net-worth individuals (HNWI), do not wish to do this. Similarly, many insurance companies also do not have the resources internally to place orders on behalf of the client, or they consider it too expensive.
That is where FARAD I.M. steps in. FARAD I.M. provides this service because they have the license and are already well-positioned. They sign agreements to place orders on behalf of clients. In these cases, there is a three-party agreement between the client, the insurance company and FARAD I.M., which has direct contact with the client, and, of course, they perform compliance and KYC checks, as legally required.
“The added value is that we have all the instruments in place because we are already investment managers. We have the experience, the connections, and the automatisation to place orders on behalf of clients in a fast and compliant manner limiting risks, and we do the follow-up and we can then provide clients with their updated portfolios evaluation.”
Both the full-service investment management and the B2B third-party asset management are boosted by another interesting offer from FARAD I.M. new to the market that answers to an increasing need coming from regulatory pressure: its GreenEthica Sustainable Scoring System and reporting which offers a highly detailed sustainability report about how a portfolio is allocated in respect to the UN’s 17 Sustainable Development Goals (SDGs).
Daniel Capocci, CEO of FARAD I.M., added: “We are pleased to have adapted our services offering to current market needs and, on one side, to be able to accompany our client more broadly in their projects thanks to the Full Service Investment Manager offering, and, on another side, to bring a new solution regarding sustainability in asset management thanks to our GreenEthica Sustainable Scoring System and its original reporting.”
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