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The fund industry – how companies must evolve with the market



Patrick van Denzen, managing director of TMF Luxembourg ,  and Marco Cipolla, founding partner and managing director of Selectra  Crédit: TMF Group

Patrick van Denzen, managing director of TMF Luxembourg , and Marco Cipolla, founding partner and managing director of Selectra Crédit: TMF Group

Continuing increased activity in Luxembourg’s alternative investment fund sector creates opportunities for new partnerships. Offering a full scope of services and keeping up with digital developments is a game changer for fund administrators to earn a slice of the market.

2021 promises to be an interesting year for investment management companies. While the number of opportunities in the alternative investment sectors continues to increase, more regulatory complexity and cost pressures also bring additional operational challenges. For many, finding a good partner who can ease their administrative and operational burden enables more time and energy to be spent growing their businesses and investments. If this provider can offer the full scope of required solutions from numerous locations around the world with one single point of contact, the offering becomes even more interesting.

Fund administrators like TMF Group, a leading global professional services provider, are well placed to offer these solutions. TMF Group’s recent acquisition of Selectra Management Company  has been an important milestone for the group and a strong testament for the company’s desire to grow their fund services offering. “Our acquisition of Selectra was the final piece of the puzzle. It means we can now offer fund clients in Luxembourg a full set of value-added services,” says Patrick van Denzen, managing director of TMF Luxembourg. Marco Cipolla, founding partner and managing director of Selectra, adds: “Becoming part of TMF Group gives our clients access to the services and reach of a firm with a footprint in more than  80 jurisdictions worldwide. Together, we will be best positioned to meet our clients’ needs and enable them to focus on their core investing activities, while being able to rely fully on a first-class partner for their funds.”

While these measures will force companies to enhance transparency and digitalise many processes even more, in the long run it will strengthen Luxembourg’s global standing and attract even more business to the country.

Patrick van Denzen,  managing director,  TMF Luxembourg

The acquisition of Selectra comes at a time when Luxembourg regulators are looking to streamline reporting and compliance requirements. The CSSF’s Circular 18/698, published in 2018, set out specific provisions that will require UCITS management companies and alternative investment fund managers to beef up their governance, central administration and internal controls. Both TMF Group and Selectra’s focus on operational excellence will be immediately up to date with regulation and both partners can now work together to offer an integrated, fully-compliant service.

Patrick van Denzen says that while these measures will force companies to enhance transparency and digitalise many processes even more, in the long run it will strengthen Luxembourg’s global standing and attract even more business to the country. “Luxembourg has always been the place to be for funds, because we keep up with the developments of the industry and anticipate the changes to benefit from them,” he says.

“Process optimisation and digitalisation is also at the top of the agenda for management companies. So, having a digital agenda to automate manual processes and integrate them with other service providers will be key to competing in the future,” says Marco Cipolla.

Patrick van Denzen agrees, adding that investing in digitalisation is no longer a nice-to-have, but essential to survive in the current market. “Clients are only willing to pay for a service that provides added value. They want measurable input and meaningful interaction from our staff. Automating repetitive tasks can free up time to do exactly that,” he says.

Process optimisation and digitalisation is also at the top of the agenda for management companies.

Marco Cipolla,  founding partner & managing director,  Selectra

TMF Group has started introducing the use of automation and artificial intelligence in the client onboarding process. They are expecting this to enhance the decision-making process and provide clients greater access to information and data through online portals and digital tools which are being implemented. These cover areas such as workflow management, GP portal, market-leading compliance technology, automated financial statement production and intelligent depositary software. All this is accompanied by a team of experts focusing on ensuring automation.

But while automation and digitalisation will continue to play an important role in the industry, Patrick van Denzen also emphasises that clients still value the personal relationships and local knowledge. “People appreciate picking up the phone and speaking to a human with expert knowledge, instead of only interacting with chatbots, which can be useful for preliminary information. I don’t think that will change anytime soon. Our client proximity obviously helps in this respect,” he says.

Find out more about TMF Group’s services here .