In 4 weeks from Cayman hedge fund to public distribution in EU

Opalesque.TV BACKSTAGE interviewed Andreas Woelfl about the advantages of ETIs

The iMaps Capital Markets solution is particularly interesting for asset managers and private banks who now have the option to package their investment strategies in retail ETIs and offer them to their clients. Asset managers thus have access to investment vehicles with authorization for public distribution (to the public in the European Union, to qualified investors in Switzerland and accredited investors in Singapore and Hong Kong).

Even Cayman hedge funds or exempt AIFs, for example, can be repackaged as ETI and distributed publicly in the EU. Using the Exchange Traded Instruments (ETI) structure can therefore be a solution for a public offering of strategies that otherwise would not fit other regimes such as UCITS or AIF. The UCITS Eligible Assets Directive has recently also clarified that ETIs can be used to track and include assets that on their own are not UCITS eligible. This means a UCITS fund can diversify into alternative asset classes through ETIs.

The ETIs can be promoted under the Prospectus Directive and are not only much more flexible compared to funds, but also significantly cheaper, starting with a SFr 18,000 p.a. low cost “flat fee” ETI. These fees include all external cost like audit, independent trustee, paying agent, stock exchange and liquidity providers.

All ETI units are dematerialised in the Swiss clearing system with their own ISIN number and listed on the Vienna Stock Exchange, and investors, also EU retail, can now buy such ETIs as easy as a ETF or stock. As the ETI is a public offering, the fund manager will have marketing rights. Technically, the ETI units can be structured either as fund linked note or certificate tracking a brokerage account such as with Interactive Brokers (IB). There is no credit or issuer risk as iMaps has pledged all underlying assets to a trustee.

In this Opalesque.TV BACKSTAGE video, Andreas also highlights: 

  • Faster Setup: Asset managers benefit from the iMaps Capital Markets solutions as it takes less than four weeks to complete the launch of the product
  • Low-Cost Solution: Exchange Traded Products at a Flat Fee which is extremely competitive compared to other offered solutions
  • Flexible Structure: The iMaps Capital Markets platform offers asset managers full flexibility, each ETI can be tailor-made to the client’s needs.

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