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FUND DISTRIBUTION

FUND DISTRIBUTION. Challenges and success factors. Distribution environment. INCREASED REGULATION UCITS V, AIFMD, MiFID II, RDR, Basel III, Solvency II, Dodd Frank, Fatca SEGREGATION BETWEEN PURE DISTRIBUTION AND PURE ADVICE Advice investors investing via platform or intermediary.

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FUND DISTRIBUTION

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  1. FUND DISTRIBUTION Challenges and success factors

  2. Distribution environment INCREASED REGULATION UCITS V, AIFMD, MiFID II, RDR, Basel III, Solvency II, Dodd Frank, Fatca SEGREGATION BETWEEN PURE DISTRIBUTION AND PURE ADVICE Advice investors investing via platform or intermediary. Distributors go from product resellers to manufacturers to keep their charging structures RECIPROCITY BETWEEN EUROPE AND EMERGING MARKETS “Reciprocity Agreements” enabling the distribution of European funds in selected emerging markets PENSION SAVINGS RISKS NOT FULLY TRANSFERRED TO THE INDIVIDUAL Asset Managers partnering with insurers to meet return requirements on pension products REGULATORY LEVEL PLAYING FIELD COMPETING VS SUBSTITUTE PRODUCTS PRIPs (Packaged Retail Investment Products) not enough. Better time to market, fit to investor needs INFORMATION AND TRANSPARENCY Publicly available information, social media, connectivity, investors challenge their advisers

  3. Distribution Models Low POS Regulation High Low Captive Investors High

  4. Planning Weak UCITS / AIF brand Strong Local Emerging market competition Local + EU

  5. Pre-distribution factors SELF MANAGED VS REGULATED MANAGER Expertise / Background Board of directors / Investment Committee (record, knowledge/skills, BoD complementarity, fees) FUND TYPE UCITS / AIF (ICIS?) Corporate form of Mutual Fund Domicile SERVICE PROVIDERS Custody Fund Administrator / Registrar Auditor Independent valuators Other experts

  6. Distribution factors INITIAL FACTORS Seed capital (cash, kind, commitments) / Fund key terms MARKETING STRATEGY Target investors / target markets Documentation (Teasers, fact sheet, detailed presentations, etc.) Roll out / roadshows CRM DISTRIBUTON CHANNELS Institutional, HNWI, Retail, Intermediaries, Pension Funds, Other Funds, Private Equity Institutions, Fund Trading Platforms, Insurance companies, Stock Exchanges GEOGRAPHICAL DISTRIBUTION Restrictions: EU, Asia, MENA, CIS, US COST OF DISTRIBUTION Impact on the fund (amortization, charged to the fund vs the manager)

  7. Distribution channels (Top 10 distribution countries)

  8. Conclusions IMPLICATIONS FOR ASSET MANAGERS: • Establish marketable products (fund type, domicile, service providers) • Implement a distribution strategy (target investors, channels, marketing, cost) • Invest in close relationships with distributors, investors and emerging market players • Listen to and capture client feedback to deliver successful products and services • Provide more information, educational materials and training to both investors and advisers • Draw on relationships with distributors, advisers and investors to develop new products and move towards solution-based products. Team up with other financial solution providers. • Deliver the value-for-money (the maximum client benefit in the most cost-effective manner) and the safety of a highly regulated vehicle

  9. Thank you Contact details igaiganis@forticap.eu igaiganis@cifacyprus.org tel. 99220190

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