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Investment in UK technology companies by private equity firms has reached its highest level since 2012, totalling GBP1.93 billion in 2015, according to international investment bank Altium.
The latest figures represent a 124 per cent rise on 2014, where deal values reached GBP865 million. The data, provided by Experian Corpfin, showed that average deal size value stood at GBP50.9 million in 2015 – up 189 per cent from the GBP17.6 million average in 2014.
The largest transaction in the last 12 months was the GBP499 million buyout of insurance technology firm Innovation Group by American private equity firm Carlyle.
Pacific Fund Systems is a global leader in supporting investment fund accounting and administration through its integrated share registry/fund accounting platform, PFS-PAXUS. With fund administrators under increasing pressure from AIFMs to provide a broader suite of regulatory reporting services – most notably Annex IV reporting under AIFMD – demand has grown for integrated systems that can house fund data on a single platform. This is precisely what PFS-PAXUS offers, avoiding the need for reliance on multiple systems by utilising a single database infrastructure to deliver greater workflow efficiencies, reduced risk, and more timely valuations.
Two years ago, to keep pace
Lawson Conner operates a specialist fund manager platform providing FCA license coverage as well as compliance and regulatory oversight on behalf of alternative fund managers. Over the last few years, the firm has seen a dramatic shift to ManCo structures as new managers, and, more importantly, institutional investors, appreciate the virtues of using an outsourced AIFM solution. By working with an established AIFM platform, emerging managers can focus on producing returns and managing their trading strategy.
"Recently, the sentiment for launching new fund structures has been strong and there is clear interest among managers in using an AIFM structure with
One of the biggest decisions for fund managers under AIFMD is whether or not to appoint an external AIFM. But as management companies, many of whom have experience supporting traditional managers under the UCITS framework, continue to espouse the virtues of outsourcing the ManCo function, alternative fund managers in different geographies are beginning to understand the benefits of going down this path.
"In the US, especially, fund managers are getting to grips with the concept that someone else can take over and run the governance function and do all the necessary risk management without necessarily giving up too much control,"
Under Article 21 of the AIFMD, any AIFM running an EU-based AIF is required to appoint a single full scope depositary to carry out four core duties: cash monitoring, safekeeping and verification of assets and general oversight of the AIF. For EU managers with experience of running UCITS funds alongside their offshore Cayman fund(s), this arrangement is a familiar one, but for AIFMs marketing non-EU AIFs into Europe, the concept of appointing a depositary is unfamiliar.
This is made slightly easier in the sense that the AIFM of a non-EU AIF can, under article 36 of the Directive, avail of
Heritage Depositary Company (UK) Limited (Heritage Depositary) operates what the FCA refers to as a `PE Alternative Investment Fund (AIF) depositary'. Whilst it is able to provide full depositary services to most AIF structures, Heritage's depositary services are focused on, but not limited to private equity, real estate, infrastructure, venture capital and esoteric alternative funds investing in both developed and emerging markets.
"The AIF's we oversee invest in what are classed as non-financial assets. We do however have the capability to hold such `Financial Assets' through our recognised and authorised global custodian," explains Gerry Warwick, Director of Heritage Depositary.
One of the primary reasons for investment managers choosing to use regulatory hosted services such as those provided by Mirabella, part of the Cordium group, is because of the time it takes regulators to approve manager applications; sometimes up to nine months in the UK.
For start-up managers entering the market for the first time, or existing managers outside of Europe who are looking for an AIFMD solution, the Mirabella platform, either alone or in tandem with the Cordium Total AIFM Solution (CTAS) provides a clear, cost-effective pathway.
Where CTAS differs from the usual outsourced AIFM solution is
For EU and non-EU managers, the ability to choose between AIFMD or UCITS regimes to bring a regulated fund product to market with minimal fuss is a compelling one. With its unique business model, ML Capital has proven to the marketplace that there are many ways to scale the walls of so-called "Fortress Europe".
ML Capital operates two Dublin-domiciled platforms that between them are capable of supporting a wide range of alternative investment strategies, from the most liquid end of the scale to the most illiquid end. The MontLake UCITS Platform was established in October 2010, while the MontLake QIAIF
Regulatory reporting remains a pertinent issue for a lot of fund managers under AIFMD. One of the attractions of going with a fully outsourced AIFM, which can also provide sub-fund capabilities for those dipping their toe into Europe, is that the reporting and operational compliance function is taken care of.
But for those managers who wish to continue to privately place their offshore funds into Europe, the regulatory reporting requirement under Annex IV is a key operational task; and one that they increasingly rely on their fund administrator to help with.
ConceptONE, LLC, which specialises in regulatory reporting and
Two of the most important considerations for any hedge fund manager under AIFMD are deciding on who to appoint as an external AIFM (or "Management Company") and also who to appoint as a depositary; the latter of which is discussed later in this report.
As registered AIFMs, European hedge fund managers are required to separate out their portfolio management and risk management functions. That is fine for established managers with well-developed front to back teams.
But for smaller managers, who only just qualify as AIFMs by exceeding the EUR100m, they may not have sufficient capital and may not be
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