The virtues of combination
The acquisition of Luxembourg Investment Solution (LIS) by SANNE in February 2018 and the resulting expansion of its services helped the AIFM service provider achieve a record year, says managing director Pierre Weimerskirch.
What factors prompted you to join forces with SANNE?
It was an interesting year for LIS in 2018. Having closed the acquisition deal in February, we were very much looking forward to seeing the first fruits of the combination of the two firms in terms of market perception and new business. We were keen to sell our existing AIFM services together with the fund administration and depositary services contributed by SANNE. That was the rationale behind the transaction, which was well received in the market when we announced it in October 2017. Ultimately 70% of our new clients in 2018 opted for integrated services, helping to make it a record year with the addition of more than 40 fund structures.
“Our portfolio is more balanced between German-speaking and Anglo-Saxon clients, but we are now seeing a growing volume of business from Asia.”
What has changed for LIS following the deal?
Being part of a listed entity helps when clients are conducting due diligence on us: being a privately-held company raised more questions. Listed status provides many clients, especially institutions such as pension funds, with greater trust thanks to the transparency it entails. We also benefit from SANNE’s footprint in 18 locations throughout the world, having previously had offices only in Luxembourg and Ireland. We have now gained a lot of traction in the US and Asia in particular, so we were quick to see the benefits on the business side. Now, in 2019, we are focusing on the operational benefits. SANNE’s Luxembourg team is joining us in our offices near the airport, and the group’s IT systems are being rolled out to LIS. Working on a common platform will be a great help, but I anticipate further synergies and benefits.
How are your clients’ needs evolving?
Our client base itself is evolving! Our portfolio is more balanced between German-speaking and Anglo-Saxon clients, but we are now seeing a growing volume of business from Asia. In terms of their needs, new developments are underway affecting reporting – pension funds and insurance companies are asking for specific reporting in response to regulatory requirements. The other trend is the increased focus on adherence to environmental, social and governance standards, with the latter an increasingly important factor. Investors are asking their fund managers how ESG-compliant their funds are, so the managers are now looking for reporting that demonstrates their fulfilment of ESG criteria. Meanwhile demand continues as before for our core AIFM, depositary and fund administration services. Rather than new needs, clients are looking for high quality and shorter time cycles. It is a clear sign that these areas have reached a high level of maturity.