Fund Solutions

The FundShare Fund Management fund solution is used by the following professional financial services providers:

Read more about our Funds

Download the presentation for more information. The various components of the fund solution are described in detail below.

 

Sector Developments

Since the financial crisis, many complex laws and regulations have been introduced to bring the sector to a higher level and restore confidence. The responsibility of risk, compliance, KYC and AML costs a lot of time and money and is distracting from the core activities of an asset manager. At the same time, the end investor is increasingly focusing on costs, making scale and serving ’smaller’ customers (<€ 100,000) in an efficient organization is a much heard wish. This creates friction for which FundShare Fund Management has a solution with its umbrella funds. This allows you to spend more time on the core activity of asset management and executing the investment vision.

 

FundShare Umbrella Funds

FundShare Fund Management manages two umbrella funds. One under the UCITS regime and one under the AIFMD regime. Both are set up as a so-called ‘closed fund for joint account’ (besloten fonds voor gemene rekening). For a number of Sub-Funds, we have the option to distribute them in 17 European countries (passports). This is possible in the following countries: Belgium, Germany, France, Spain, Portugal, Italy, Greece, Austria, Switzerland, Poland, Denmark, Norway, Sweden, Finland, United Kingdom, Ireland and the Czech Republic. With a Sub-Fund in our umbrella funds, you can serve all your customers with one clear portfolio with low costs and an efficient structure. The automated (free) access to DeGiro is a small step for the end customer. External funds (Binck, Insinger Gillessen, etc.) have access to FundShare funds on the DeGiro platform for a small fee via Fundsettle. The portfolio management (execution of investment policy) is outsourced to the asset manager.

 

Sub-Fund possibilities

The investment policy is written down in consultation with the portfolio manager. The restrictions are primarily determined by the law (Wft, Bgfo), regulations (UCITS / UCITS and AIFMD) and the basic prospectus of the umbrella fund. The other restrictions are described together with the objective and techniques in a supplement of the prospectus per Sub-Fund. This makes different types of funds possible, including:

Investment Funds

  • Stocks
  • Bonds
  • Mix
  • Fund of Funds

Feeder Funds

  • Hedge Funds
  • Private Equity
  • Pension Funds
  • Existing AIF/UCITS investment funds
 

For who?

Because of all these options, FundShare Fund Management solutions are an option for many financial parties:

  • Asset managers
  • Investment Funds
  • Hedge Funds
  • Private Equity
  • Pension Funds

The only requirement for starting a Sub-Fund, with portfolio management outsourced, is an Asset Management license (Wft 2:96). If you have an idea for a Sub-Fund but do not have a license, then there is a possibility via the FundShare Fund Management portfolio managers or via an existing relationship.

 

Portfolio Management

The KYC and AML are performed continuously by DeGiro. The risk and compliance responsibilities are for the fund manager, FundShare Fund Management. This gives the asset manager full focus to the fund portfolio. Through the online environment of DeGiro, the portfolio manager has access to many instruments at exchanges around the world. In addition to the listed products, the DeGiro professional desk provides access to the OTC market through their network. For unlisted investment funds, DeGiro has access via an Allfunds connection.

 

Structure

The KYC and AML are performed continuously by DeGiro. The risk and compliance responsibilities are for the fund manager, FundShare Fund Management. This gives the asset manager full focus to the fund portfolio. Through the online environment of DeGiro, the portfolio manager has access to many instruments at exchanges around the world. In addition to the listed products, the DeGiro professional desk provides access to the OTC market through their network. For unlisted investment funds, DeGiro has access via an Allfunds connection.

  • FFM is the fund manager (determining investment policy, risk and compliance) of the umbrella;
  • FFM is the director of the ‘Stichting Legal Owner FundShare umbrella’;
  • FFM delegates Portfolio Management (execution investment policy) (PM) to an OpCo (Operating Company / Asset Manager);
  • FSA (FundShare Administrator): (daily) NAV, subscriptions and redemptions and participant administration;
  • Kas Trust is the depositary of the funds;
  • DeGiro: broker (incl. risk), custodian and distribution; and
  • DeGiro: transfer agent and onboarding clients (AML/KYC).
 

Safety

The increased laws and regulations are there to restore confidence in the financial sector. Safety is one of the most important parts of this. The umbrella funds fall under the UCITS or AIFMD regulations. In addition, FFM has a license from the AFM (Dutch financial regulator) and is DNB (Dutch central bank) regulated. This makes the structure complex, but this is for mandatory checks and asset segregation. The risk control, compliance and assurance are carried out at 7 levels:

  • Portfolio Manager (OpCo or FFM);
  • FundShare Fund Management risk control by the Operation & Control department;
  • DeGiro risk department on the account level of the Sub-Fund;
  • Kas Trust as depositary of the funds;
  • Mazars is the external accountant of the funds;
  • Audit is done by an external specialized company, Charco & Dique; and
  • AFM, the Dutch financial regulator.

To limit the risks in advance, we have included a number of restrictions in our base prospectus.

  • No leverage;
  • Only exchange listed products;
  • Only covered derivatives;
  • Securities lending with at least 104% collateral;
  • Minimum diversification restrictions;
  • Low turnover per Sub-Fund; and
  • Annual delegation due diligences and reviews.

With these measures, the Sub-Funds are excluded from the risks of other Sub-Funds in the same umbrella fund. Another important point of our funds is that the objective is clear and transparent and that a Sub-Fund's portfolio must be in line with its objective. The end customer can trust that his investment is in line with the information and documentation provided, so that miscommunication is prevented.

 

Costs and Revenues

The structure of the fund generates costs at various parties. Transparency and efficiency lead to the lowest possible cost structure. The following costs for the Sub-Fund are on an annual basis and are settled on a monthly basis:

  • Broker (DeGiro): minimal 5 bps of the AUM* as transaction costs. Plus additional transaction costs above 5 bps. This is including custody;
  • Administrator (FSA): 7,5 bps by less than 25 mln AUM*, above 1 bps;
  • Administrator (FSA): minimal 2.500 EUR, maximum 12.500 EUR. This depends on the complexity of the portfolio;
  • Depositary (Kas Trust): 1bps of the AUM*, plus 2.250 EUR fixed and plus 21% VAT;
  • Audit (Mazars) and Audit support (FSA): 3bps by less than 25 mln AUM*, above 1 bps. Plus 2.500 EUR fixed plus 21% VAT;
  • FFM: 15% of the management fee with a minimum of 15.000 EUR per year;
  • Portfolio manager: maximum 85% of the management fee;
  • Startup costs: around 10.000 EUR distributed over 5 jaar;
  • No entry and exit fees; and
  • No minimum order value.
    *AUM = Assets Under Management

The operational costs (Administration, Audit, Depositary) are a maximum of 0.5% of the AUM per Sub-Fund. If the costs are higher, this is at the expense of the management fee, so that the participant will never pay more. In addition to the management fee, a performance fee is also possible.

 

Cost Examples

With this cost structure we have a very competitive proposition. This leads to low total cost of ownership (TCO) at Sub-Fund level for the participant and relatively high returns for the portfolio manager.

Below are a few cost examples of standard decorated Sub-Funds. To calculate the costs that suit your situation, you can use this Excel sheet.

 

USD and EUR bond Sub-Fund with 0.6% management fee

 

EU stock Sub-Fund with 1% management fee

 

Worldwide mix Sub-Fund with 1.5% management fee

 

Start a Sub-Fund

Is a Sub-Fund something for you? Starting a Sub-Fund is very easy. The process is briefly explained below

  • Discuss type of Sub-Fund

Before the details of the Sub-Fund are discussed, a choice must first be made for the type of fund. If this fits within one of the umbrella funds, the next step can be taken.

  • Due diligence

Due diligence is the most important part for FundShare Fund Management (FFM). An important part of the fund is outsourced to an external party. Extensive due diligence ensures comfort for both parties and reduces the reputation risk for the existing Sub-Funds.

  • Delegation contract

FFM uses a standard delegation contract, no distinction is made between parties. This clearly sets out the agreements regarding delegation.

  • Proposal objective and technique OpCo

The objective of the Sub-Fund and the technique of achieving this objective are discussed between the asset manager and the fund manager. An example portfolio of the asset manager can be part of this.

  • Translation to prospectus supplement by FFM

The fund manager, FFM, translates the point described above into an investment policy and objective. with the corresponding restrictions in a supplement for the prospectus.

  • FFM: setup Sub-Fund account at DeGiro, FSA and depositary

FFM ensures that an account with DeGiro is opened on behalf of the Sub-Fund. The new Sub-Fund is registered with the FSA administrator. And the custodian is asked for approval for the Sub-Fund.

  • Prospectus change to the financial regulator, AFM

The final step is to add the supplement to the prospectus and submit this change to the financial regulator, AFM.

The total time of this process is approximately 3 months.

Contact

For more information you can contact us.

FundShare Fund Management B.V.
Rembrandt Tower 9th
Amstelplein 1

+31 (0) 20 2613 080
contact@fundshare.nl