ML Capital evolves fund solutions offering
ML Capital, one of Ireland's leading management company groups, has grown to exceed EUR3 billion of AUM over the last 12 months. The growth trajectory over recent years has enabled ML Capital to evolve from being a leading UCITS platform operator to being more of a fund solutions provider to managers and investors alike.
"They come to us, tell us what they need and we give them the best fund structure and solution; whether this is going on to one of our platforms and launching a sub-fund and using us as the third party ManCo to perform all the operational and compliance tasks and helping with distribution, or setting up standalone funds. We have developed a series of solutions and segmented the offering for managers," says Cyril Delamare (pictured), CEO of ML Capital.
ML Capital operates two platforms: MontLake QIAIF and MontLake UCITS. Both avail of the Irish ICAV structure, the latter being UCITS V-compliant.
Delamare says that both platforms grew in 2016. "Both have recorded net inflows and have launched new sub-funds. The ICAV is proving to be a really good format. It has modernised the Irish fund structures available to managers," remarks Delamare.
"Much of our demand for European regulated funds has been investor-driven, something we believe to be a real differentiator. An investor will have discussions with a fund manager and agree to invest with them but only on the basis that they have a properly regulated and appropriately managed fund structure."
This, says Delamare, is pushing the Irish fund model away from self-managed fund structures to management company-led structures where ML Capital will act as the appointed Management Company.
"Oftentimes, an investor will come to us and say,’We want to launch this manager, can you assist with the launch process?’ If the manager has a particular set of service provider requirements and sufficiently large seed capital we will typically set up a standalone fund structure but if the seed capital is on the lower side, we will onboard them onto one of our platforms.
"It's been an interesting evolution going from the self-managed MontLake UCITS and MontLake QIAIF model to one where today we act as a super management company (`MLC Management'). We believe that going forward, management company-led fund structures will be the way to go. We don't believe that the old self-managed fund model will work in the next few years," says Delamare.
Delamare says that in terms of QIAIF launches last year, they were typically in the arbitrage world and in the CTA/macro world.
"That is the result of investors focusing on trying to find hedge funds that can complement their long-only exposure. Investors last year were really focused on managers running less directional strategies. There was also strong demand in the hard asset space. We've also seen private debt funds launch; we launched a multi-strategy private debt fund a few months ago, for example.
"Investors like these strategies as it gives them a way to reduce their exposure to sovereign and government bonds but they are still only a small slither of their overall fixed income exposure," says Delamare.
Both managers and investors expect more from management companies today; they want excellent client service, reporting, distribution, active oversight on the products, etc. That is exactly what ML Capital brings to the table. It is no longer good enough to simply be the fiduciary.
"We are very active with our fund manager and investor clients. We are the link between both parties," concludes Delamare.