Substance, Safety, Service and Sustainability: the 4 S which guide the growth of MultiConcept Fund Management S.A.. An interview with its CEO, Ilias Georgopoulos.

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Can you present MultiConcept Fund Management S.A. in brief?

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As a Super ManCo, MultiConcept Fund Management S.A. holds the dual licence for UCITS and AIFM. It is 100% owned by Credit Suisse Group AG, manages €19 billion in assets as of end January 2020 and our activities are supported by a team of over 30 people in total, located mainly in Luxembourg, and also in Ireland, in Poland and of course in Switzerland. We interact with over 100 counterparties and service over 50 asset managers, whose business is equally divided between UCITS and AIFs. Our growth accelerated in 2019 with net new assets being in excess of €6 billion, particularly in the alternative sector in the second half of the year. Our growth strategy to support optimally our clients is based on the 4S approach. Firstly, Substance: we provide the full range of services and products necessary for UCITS and AIFs in Luxembourg and Ireland. Secondly, Safety: we operate under the supervision of the CSSF in the Grand Duchy, the ICB in Ireland and the FINMA in Switzerland. The third focus is Service: our highly qualified employees have an average of more than 12 years’ experience in the fund industry and they are supported by a structure, which is tailored to our clients’ needs. Last but not least, Sustainability involves combining ESG criteria, green finance and diversity. These 4 S therefore act as our pillars to support sustainably the development of our clients and of course the local financial sector.

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“You will soon be able to buy property like stocks.”

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How are your clients’ needs evolving?

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Our client business is evolving in a holistic way with opportunities at the UCITS level and an accelerated growth in the private assets space, which explains the balanced distribution in our activities between mainstream and alternatives. For alternative funds, we are seeing an increasing number of requests in the four main sectors (Private Equity, Real Estate, Debt Funds and Infrastructure), but clients are increasingly focusing on balancing the impact between performance and sustainability. We are focused on three main types of institutional clients – Asset Managers, Pension Funds, and Financial Institutions – and we have observed a tremendous increase in requests for institutional solutions by family offices and UHNWIs. To meet the needs of these particular profiles, we rely on our infrastructure and the excellent knowledge of our clients, which is part of our DNA. An increase in regulations has helped the market to mature and has resulted in an on-going consolidation, leading to the increased outsourcing of the role of fund management companies to focussed and committed specialists like MultiConcept, where the quality of services, the long-term market vision and our unique balance sheet protect institutional clients. We are currently taking full advantage of this consolidation.

 

What are the challenges and opportunities within the market?

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Unsurprisingly, alternative products are the main market opportunity, as the sector is growing rapidly and is now worth billions. Digitisation and digitalisation also represent an opportunity, for two different reasons. Firstly, the ease of access to information by means of digital media offers a wide range of possibilities for reporting, control and operations optimisation such as subscription/redemption activities in a fund. Secondly, digital innovation will inevitably revolutionise our activities; for example, the tokenisation of investments will ensure that players who are used to working with UCITS are in an ideal position to respond to the transformation of these “hard” assets into dematerialised assets, making the activity comparable to stock exchanges. You will soon be able to buy property like stocks. Yet a note of caution must be sounded: Luxembourg’s success has always been based on products, the regulations which accompany them and the talent to understand them and to help them to evolve. The challenge will lie in maintaining this balance to meet the expectations of institutional investors.