{"id":8693,"date":"2022-08-22T11:38:00","date_gmt":"2022-08-22T11:38:00","guid":{"rendered":"https:\/\/iqeq.com\/?p=8693"},"modified":"2023-09-19T10:49:23","modified_gmt":"2023-09-19T10:49:23","slug":"regulated-funds-weighing-benefits-hosted-vs-standalone-platforms","status":"publish","type":"post","link":"https:\/\/iqeq.com\/insights\/regulated-funds-weighing-benefits-hosted-vs-standalone-platforms\/","title":{"rendered":"Regulated funds: Weighing up the benefits of hosted vs. standalone platforms"},"content":{"rendered":"
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By Annette Stack, Director<\/em><\/p>\n

Investment managers (IMs) seeking to access new markets and investor flows in Europe by establishing a regulated fund have many options to consider. Primary among these is whether they should launch the fund on a third-party hosted platform or establish a proprietary, standalone platform. In this article, we outline the key points to consider when making that decision.<\/strong><\/p>\n

The EU regulatory framework governing the funds industry is constantly evolving in its efforts to improve investor protection, increase transparency and harmonise the regulatory compliance requirements for cross-border funds operating under the UCITS and AIFMD directives. Against this backdrop, third-party hosted platforms \u2013 available to support both UCITS and alternative investment funds (AIFs) \u2013 have become increasingly popular in recent years.<\/p>\n

At a basic level, a third-party hosted platform is an umbrella fund structure operated by a Management Company (ManCo). The platform comprises multiple sub-funds (or compartments), each with segregated liabilities and operating its own investment strategy.<\/p>\n

Hosted platform practicalities<\/h2>\n

An IM considering a platform approach will likely want to ensure there is no diminution in its relationship with its underlying investors or to the value of its brand. Setting up the structure so that the IM is a directly appointed delegate maintains the IM\u2019s direct link to the investment strategy of its sub-fund and upholds brand identity in terms of the sub-fund\u2019s naming convention, marketing strategy and investment story. Underlying investors identify directly with the IM, with the platform simply providing the supporting operational and regulatory infrastructure. In short, this is a turnkey solution that sees the IM \u2018plug into\u2019 an established framework with clear speed-to-market advantages.<\/p>\n

Key benefits of a hosted platform<\/h2>\n