Eduard von Kymmel (VP Fund Solutions): north bound
Eduard von Kymmel, CEO of VP Fund Solutions, says strengthening the Super ManCo’s presence in the Scandinavian markets remains a priority. Interview.
What is VP Fund Solutions' strategy for Scandinavian countries?
In 2018, we successfully entered in the Nordic market by onboarding our new clients, Carnegie Investment Bank Stockholm and Copenhagen. We also welcomed another independent asset manager with a Danish background. Since then we have continued to concentrate on this region where investors have a strong appetite for investment funds. Our main focus is on independent asset managers running traditional as well as alternative investment strategies such as private equity, real estate and infrastructure investments in the Nordic region as well as abroad. Needless to say, our enhanced infrastructure license as AIFM and our experience in infrastructure investments in Scandinavia helps us to understand the requirements of our prospects. As for traditional (or UCITS) funds, we have been approached by family offices and asset managers currently operating local funds who are looking for a solution with more sophisticated international distribution capacities such as Luxembourg-domiciled funds. Other managers who already have Luxembourg-domiciled funds in place are looking for options to delegate management company services to improve efficiency or simply for a new client-focused service provider concentrating on the Nordic market.
“In the Nordics, it is critical to be able to adapt to the local requirements. We do.”
How do you adapt to your client’s needs in that region?
Before you can on-board clients from a new region, it is necessary to understand and identify the specific market requirements and practices. In addition, you need to know what your competitors are currently offering, the gaps, what your differentiators are and the value propositions you offer to your clients. Such market research can be done internally, with the support of external advisors. Having understood the needs, you have to listen to your new clients as well as prioritizing and finding solutions in order to adapt the services and processes you offer in a specific market. VP Fund Solutions has therefore hired new colleagues working for our management company, who have a depth of experience in the Scandinavian markets. Most of them have already worked for a management company promoted by a Swedish bank. Furthermore, we have adapted our NAV process and invested in our systems in order to meet local asset management requirements. Now, as the facilities are in place, the attention to the client’s needs is the core competitive advantage we can offer.
What market developments do you foresee in the next five years?
I see two main developments in the management company services area in the next five years: first, an ongoing consolidation of market participants. You need to focus, be efficient and have the critical size in order to survive. You can still see many Luxembourg-based management companies with assets under management below one or two billion euros. In my opinion, with such low asset value and thus revenue base it makes it extremely challenging to comply with all regulatory and compliance requirements on the one hand while, at the same time, remaining competitive. Secondly, automation and digitalization. Automation will help our industry to have more stable and scalable processes. In the context of digitisation, I would like to use VP Fund Solutions’ innovations. Our “ManCoTech” approach helps management companies and fund sponsors to become more efficient and to comply with the investment fund stakeholders demands. A strong technology strategy can be a very significant competitive advantage for future successful management companies and asset service providers. Investors, managers and board members usually want to receive reports, portfolio and performance information and more. They want to have frequent and interactive access through accessing dynamic electronic tools like dashboards that are tailored to their specific needs. The challenge of such developments will be to find the right balance between being IT-focused while remaining flexible in order to adapt to specific client needs. Furthermore, the distribution of funds will be a challenging topic for both management companies and distributors, due to regulatory oversight and cost.