The launch of an Actively Managed Certificate under the iMaps Capital Markets platform is operated on a two-tier structure: 1) We set up a Segregated Portfolio which opens an account with the broker. You get power of attorney on that brokerage account via an investment management agreement to execute your trading strategy. 2) iMaps ETI AG, the structured products issuer, issues Actively Managed Certificates linked to the Segregated Portfolio. The AMCs in turn get admitted to trading at Stuttgart or Vienna Exchange.
Our iMaps Actively Managed Certificates can be promoted under the Issuance Programme for public offering to retail investors in the following countries: Austria, Germany, Italy, Liechtenstein, Luxembourg, Ireland, and Switzerland (if Swiss regulated distributor) and to professional investors in the European Union, United Kingdom, Norway, and Iceland. Plus, all our AMCs are eligible for private placement by accredited investors in Singapore and Hong Kong.
The Segregated Portfolio gets pledged to an independent trustee, ensuring that the credit risk of of the issuer is insured, so-called collateralization.
Time to market: about 30 business days
Compared to Fund Solutions
The typical fund distribution model looks as follows: Asset Manager -> Custodian -> Transfer Agent -> Clearing House -> Fund Platform -> Distributor -> Investors
Obviously, each intermediary requests a remuneration, which leads to complex and multiple fees layers. Moreover, you need a fund prospectus, distribution rights, and KIID (Key Investor Information Document). To set up all of this from scratch is a major consumer of resources – a multiple of our fees.
Thus, you have two options:
- You have this time and money and launch your own fund or …
- You use a “One-Stop-Shop” which over the course of many years has setup a solid and efficient infrastructure for investment solutions with EUR 1 to 50 million asset under management (AuM).
With an AuM of over EUR 50 million, a fund solution may no longer be unreasonable from a cost perspective. But it still would not be the best solution if you want to keep the Exchange listing with daily liquidity. Because the provision of a market maker would again be very expansive.
On the other hand, our Actively Managed Certificates are secured and come with public distribution rights across Europe. So, no hassle with legal work and dealing with intermediaries, as we have already done all this work for you.
The Advantages in a Nutshell
We are currently the only AMC provider which can offer an “all-inclusive” white label Actively Managed Certificate solution for asset managers. That is, Exchange listing and thus Retail Public Offering in Germany, Italy, Austria, Liechtenstein, Luxembourg, Ireland, and Switzerland (and we are continuously expanding the reach), Public Offering to Professional Investors in EU and UK, issuer risk hedged, no limitations in number of investors, no limitations in number of trades, and the investors can very easily buy & sell their AMC units, for instance, via online brokers such as Interactive Brokers.
Let’s compare this to the next higher level: an equivalent fund solution. There you would be faced with budgeting approximately EUR 75,000 in start-up costs, as well as annual costs averaging EUR 100,000. And these are just the operational costs, no management and performance fees. Let alone the Exchange listing of the fund and the need to provide a market maker. Our prices are a fraction of that.
These two points show quite well where we stand in the market and what advantages (reach, flexible setup, easy handling, and cost advantages) we can provide to you as investment manager and to the AMC investors.
Actively Managed Certificates on the Exchange
Our AMCs have daily liquidity with an auction mechanism: once a day there is one price in form of an auction on the Exchange.
Ideally, orders are entered before 9:30 am CET on business days. Moreover, we recommend that clients enter orders valid GTC or “end-of-month” and not only daily. In this case, if they miss the daily order execution, it will be filled the next business day.
The daily auction can be anytime between 10 am and 1 pm CET depending on the order book. If no price has been fixed at 10 am any incoming order can be executed till 1 pm on the same day.
The Launching Process
As soon as the Asset Manager (AM) has signed and sent us (scanned by e-mail) the Due-Diligence Documents and the Engagement Letter …
- We will send the AM the Investment Management Agreement
- Having the signed Investment Management Agreement, we do all the technical and legal part (Segregated Portfolio, Actively Managed Certificates, ISIN, Exchange listing, the setup with the broker, NAV Calculations & Accounting, Reporting, etc.)
- AM receives the direct trading access to the brokerage account
- Initial funding
- Ready, steady, go