The challenges of achieving a one platform offering from multiple offices in multiple jurisdictions are complex, but the task has never been more important given the increasing complexity of fund structuring. The need to run cross-border structures in tandem with each other is becoming the norm, rather than the exception.
The growth of cross-border structures started with the increasing use of third country SPV's as investment vehicles to avoid issues such as 'dry income'. The operational problems of disconnecting the management of these SPV's from the rest of the fund platform quickly became apparent and specialists like the Aztec Group have very effectively addressed the issue. Cross-border structuring, however, is becoming increasingly common at a fund level too following the implementation of the AIFMD last year. This is because the fragmentation of the European market requires parallel and feeder structures working in tandem with the main fund.
Achieving a one platform offering is relatively easy where a business operates off a single platform in a single jurisdiction. Common processes, systems and support, close communication, shared understanding and one legal and regulatory framework generally overcome any structural weaknesses in the platform itself. Obviously, none of this is true in a cross-border context where a different approach is required.
Implementing a one platform approach in a cross-border context has little to do with co-branding offices in different jurisdictions if all these offices, whether or not white-labelled, operate independently of one another to varying standards. Similarly, implementing a one platform approach should not be equated with standardisation; because, the subtleties of market variations can be profound. Too often we have seen groups crippled by the limitations of a remote head office that is not focussed on local issues or people. A one platform offering cannot be achieved either through the use of common centres of excellence in low cost jurisdictions. The problems of a functionalised approach are difficult enough to manage in a single jurisdiction, and is only suitable for automated funds with symmetric processes. Funds requiring asymmetric services have to be supported on a client-centric basis by teams with broad expertise and awareness.
Aztec Group was an early pioneer of a one platform offering on a cross-border basis which was achieved through establishing a common product understanding. This means that offshore funds must be understood onshore and onshore investment companies must be understood offshore. Mutual understanding was supplemented by common processes adapted to meet the specific requirements of each jurisdiction. We were fortunate, because, this process coincided with the development of our ISAE 3402 type II accredited controls and the rapid evolution of dedicated IT applications that provided a clear framework for our teams to operate in.
The other factor that should not be overlooked is people. Recruiting and retaining the right staff in an increasingly complex environment is vital, and we continue to invest considerably in our staff with initiatives such as the Aztec Academy. The Aztec Academy, brings together people across our business and creates those horizontal links that glues the Group together operationally on a day-to-day basis.
Having invested so heavily in a one platform offering, maintaining and growing it is a key strategic priority for the Aztec Group. In this, we are discovering that increasing complexity is useful, because, this forces us to pool expertise and resource across offices. In this regard, 2014 is going to be an especially busy year and we are committed to achieving unparalleled platform integrity for the benefit of our clients.
If you would like to discuss outsourcing to the Aztec Group or are considering migrating a fund or SPV, please contact James Duffield, our Head of Business Development on +44 20 3818 0250.
Aztec Group Guernsey
Aztec Financial Services (Guernsey) Limited
PO Box 656, East Wing, Trafalgar Court
Les Banques, St Peter Port, Guernsey, GY1 3PP
Telephone: +44 1481 749700
Facsimile: +44 1481 749749
Video Conference: +44 1481 725947
Aztec Group Jersey
Aztec Financial Services (Jersey) Limited
Aztec Group House, PO Box 730
11-15 Seaton Place, St Helier, Jersey, JE4 0QH
Telephone: +44 1534 833000
Facsimile: +44 1534 833033
Video Conference: +44 1534 832002
Aztec Group UK - London
Aztec Financial Services (UK) Limited
2 Throgmorton Avenue
Telephone: +44 20 3818 0250
Aztec Group Luxembourg
Aztec Financial Services (Luxembourg) S.A.
7, rue Lou Hemmer, L-1748, Luxembourg – Findel
Grand-Duché de Luxembourg
Telephone:+352 246 160 6000
Facsimile: +352 246 160 6016
Aztec Group The Netherlands
Aztec Financial Services (Netherlands) BV
Spaces Zuidas, Barbara Strozzilaan 201
1083 HN Amsterdam, The Netherlands
Telephone: +31 20 794 4820
Facsimile: +31 20 794 4821
Aztec Group UK - Southampton
Aztec Financial Services (UK) Limited
Forum 3, Solent Business Park
Parkway South, Whiteley, Fareham, PO15 7FH
Telephone: +44 238 202 2300
Facsimile: +44 238 202 2309