AIFMD & Private Placement

International Fund Management can act as offshore AIFM to either a UK or Guernsey AIF (a stand alone or feeder vehicle) which can in turn be administered by PraxisIFM's funds services.

IFM will delegate the portfolio management to the advisor, while retaining general oversight and the risk advisory function. The AIFM remains outside of the EEA, taking advantage of the National Private Placement Regime and therefore removes the need to comply with much of the AIFMD requirements. Private placement into the EEA does have some reporting requirements, however these exclude certain AIFMD requirements such as the capital requirements and remuneration restrictions for the investment advisor. Importantly the remuneration disclosures only have to be provided on the AIFM (i.e. IFM).

Other benefits of private placement are reduced cost and time to establish the marketing permission. IFM has considerable experience marketing via the National Private Placement Regimes, having already registered with a number of EU jurisdictions including: UK, Ireland, Luxembourg, Germany, Denmark and Sweden.

Comparing the requirements of utilising private placement/IFM versus the full AIFMD compliant passport are as follows: 

Private Placement Structure

 

Advantages of using IFM as AIFM

  • Guernsey is an attractive jurisdiction for global investors
  • Compliance with all of the regulations/notification obligations in the various EEA countries and associated AIFMD obligations are the responsibility of IFM and not the investment advisor
  • Advisor does not have to disclose remuneration, disclosure is at IFM level
  • Using the IFM/Praxis solution minimises the number of parties involved and creates a more streamlined structure
  • Reduction in overall costs due to economies of scale
  • IFM provides all Management substance, i.e. office, staff, systems
  • IFM has a track record in private placement and therefore can provide vital experience when accessing EU capital, saving time and cost for the advisor
  • IFM fulfils the capital requirement obligations introduced by AIFMD, not the advisor

IFM Private Placement Solution 

With the IFM Private Placement Solution we:

  • Act as an offshore AIFM to an EU or non-EU AIF which can be administered by the Praxis Fund Group
  • Delegate the portfolio management to the advisor, while retaining oversight and the risk advisory function

The AIFM remains outside the EEA, taking advantage of private placement, and with that, reduced reporting obligations and disclosures.

The solution is potentially suitable for non-EEA advisors looking to source professional investor monies, from a number of EEA countries, using the existing private placement regimes within the EEA. 

While private placement into the EEA does impose some reporting requirements, these are relatively straightforward and do not include certain the full extent of AIFMD compliant restrictions and disclosures such as capital requirements and remuneration restrictions. In addition the remuneration disclosures only have to be provided for the AIFM (i.e. IFM) and not the advisor, resulting in significant overall time and cost savings.

Chris Hickling

Managing Director

BACKGROUND

Chris joined PraxisIFM in 2009 as part of the purchase of Investec Administration Services' client book. Having initially joined our Operations team he became Managing Director of IFM later that year.

He had previously worked for Close Fund Services for six years, during which time he reviewed and implemented new operational procedures leading to a more focused and risk-based approach on a broad range of funds. Reviews included the areas of pricing and risk, NAV production and dealing with fund advisors. 

He continues to sit on a number of fund and general partner boards and oversees all management services including adherence to distribution rules and investor reporting.

EXPERTISE

Chris' focus is primarily on developing opportunities in fund management, risk management and AIFMD/UCITS solutions.

QUALIFICATIONS

ACA

Shaun Robert

Director

BACKGROUND

Shaun has extensive front to back experience in fund administration across transfer agency, fund custody, trustee and AIFMD depository lines of business. For more than 25 years he has dealt with most fund structures across a wide range of strategies such as hedge funds, fund of funds, fund of hedge funds, debt, bond and equity funds.

He gained valuable experience with Close Fund Services, Credit Suisse Fund Administration and J.P. Morgan Custody Services. Shaun has also held prescribed positions as recognised by the Guernsey Financial Services Commission for over 10 years, including Directorships and MLRO positions.

As a Director of IFM, Shaun offers advisors and boards with fund and risk management services solutions, including AIFMD and UCITS, providing PPM reporting and registrations for cross border marketing, together with consulting services for managers and boards seeking adherence to AIFMD and UCITS. He also assists with oversight and governance of the day-to-day business.

EXPERTISE

His risk management service solution advice to advisors and boards.

QUALIFICATIONS

Member of the Chartered Institute for Securities and Investments.