FARAD: third party asset manager and more

Daniel Capocci, FARAD Group General Manager. (Photo: FARAD Group)

Daniel Capocci, FARAD Group General Manager. (Photo: FARAD Group)

Being a “third party asset manager” for independent portfolio managers is key part of the new strategic direction for FARAD Group. Life insurance and ESG ranking services are the other key business lines, explained Daniel Capocci, FARAD Group General Manager.

This year has seen a strategic refocus for the independent financial services group FARAD. “We decided to become a fully B2B operation, seeking partnership with institutional clients, and avoiding any competition with what our customers are seeking to achieve,” Capocci explained. This was a shake-up for this company which has been serving local and pan-European clients from its Luxembourg headquarters for twenty years, and currently has more than €3bn assets under management.

FARAD Investment Management is the new name for FIA Asset Management, and its strategy has seen a refocus on portfolio management and fund management services for third parties. Equipped with an asset management licence as a CSSF approved financial sector professional (PSF), “we can manage any kind of portfolio for our clients”, says Capocci. “We are ultimately responsible, so before starting to work we perform all necessary compliance checks,” he said.

These licences can be time consuming to acquire, and with regulatory requirements on top this adds a considerable burden. FARAD relieves this strain, with asset managers able to design portfolios for their clients, with FARAD IM providing the full range of services along the fund value chain. In line with this strategy, the firm sold its investment fund management company earlier this year, enabling it to better focus its efforts on becoming a pure “third party asset manager”.

As regards life insurance, this has been at the centre of the group’s offering since it was founded in 2001. As a CAA authorised broker, FARAD International offers these B2B services alongside consultancy to private clients (mainly wealth managers) and institutions cross border. The firm also has regulator-approved operations in both Italy and Switzerland.

Sharing practical experience of sustainable investing concepts is also a central part of this new strategy under the GreenEthica brand. The Sustainable Scoring System is used to rate funds, portfolios, equities and bonds against their compliance with the UN’s 17 sustainable development goals. “This ESG scoring methodology relies on an in-house database and methodology that cuts through the complexity of understanding this increasingly important aspect of investment management,” said Capocci.

“There is a lot of data on the market but too often this can be difficult to digest. Our methodology cuts through this, resulting in a two-page report that gives an accurate, but understandable, representation of the investment’s sustainability characteristics,” he said. This service has been particularly welcomed by smaller businesses which might not have the human and technical resources to develop their own ranking systems. To underline their commitment to sustainability, FARAD has been B-Corporation certified since 2017, a badge of quality for its social and environmental performance.

“This strategic change is in one way a return to our origins in terms of branding and positioning, but as regards our services, these have been broadened and enhanced to take account of the latest industry market and regulatory requirements,” Capocci said. It is a combination of traditional and innovative services designed to appeal to flexible, innovative, and sophisticated clients.

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