Asset managers have different options for bringing an investment idea to the market. Which option is the right one depends on various factors such as the planned investment strategy and the assets initially available. Most of the time, an Actively Managed Certificate (AMC) is the best solution.
Asset managers do not have to set any limits to their investment strategies
If crypto assets shall be part of the portfolio, a UCITS fund is not an option. The same applies if the focus is to invest in derivative instruments or if the focus on a specific topic does not allow for broad risk diversification as the UCITS directive excludes various asset classes and provides for a strict level of diversification. For asset managers who strive for maximum diversity when selecting asset classes, this “product shell” is unlikely to be the first choice – especially since the launch of such products takes a comparatively long time and is only worthwhile for volumes of around 25 million euros due to the high costs.
Asset managers with alternative investment funds (AIFs) have much more freedom in their investment strategy. However, these also have disadvantages: On the one hand, they are quite expensive in terms of circulation and running costs, and on the other hand, they can only be marketed to professional investors and thus exclude marketing to retail investors – even mass affluent and High Net Wealth Individuals classified as retail investors.
Actively Managed Certificates – go public cheaply and quickly
Asset managers who value high flexibility and have limited seed capital therefore consider issuing the investment strategy as Actively Managed Certificates (AMCs) in the form of a listed security. This is a type of modern certificate that can be implemented efficiently with assets under management starting as low as just one million euros.
Actively Managed Certificates can be created particularly quickly and conveniently with the help of white label providers. They have the know-how and infrastructure to bring the strategy to the market quickly and cost-effectively. Licensed asset managers can therefore rely on the expertise of issuers such as iMaps Capital Markets. In collaboration with iMaps, an investment strategy can usually be listed as a collaterallised Actively Managed Certificate on the Stuttgart Stock Exchange – Europe’s largest exchange for Actively Managed Certificates – within four weeks.
This is how Actively Managed Certificates work
The spectrum ranges from Actively Managed Certificates on portfolios with classic securities, such as stocks, bonds and funds, to derivatives and crypto tokens as underlying components. An asset manager can put together the strategy from an investment universe comprising several million financial instruments and take both long and short positions or invest with leverage. Long/short equity, global macro and event-driven strategies can also be represented in Actively Managed Certificates. In addition, unlike UCITS funds, there are no diversification regulations. These second-generation certificates are particularly suitable for thematic investments, as broad diversification is often undesirable or not possible without diluting the focus on the theme.
By choosing Interactive Brokers as the execution venue for international stocks, iMaps offers the cheapest transaction costs for reallocations within the underlying asset. The securities are therefore generally purchased on the main stock exchanges at the lowest available spreads and costs.
If you want to build up and manage assets for your clients, you need flexible and cost-efficient investment instruments, especially as an independent asset manager, in order to be able to survive in the current market environment. The raise of Actively Managed Certificates has only just begun.
If you have any questions about setting up your own Actively Managed Certificate, please do not hesitate to contact us.