A Peek into Private Funds
Asiaciti Trust is an independent, family-owned firm which has for nearly 40 years been providing administration, trustee and family office services from its head office in Singapore and eight other offices worldwide. We got the chance to converse with David Inglesfield, Regional Director at Asiaciti Trust for Client Solutions in Europe, to learn more about their firm, and to get his unique insight into the ever-evolving world of private funds.
Can you give us an overview of your company in layman’s terms?
In simple terms, Asiaciti Trust provides legal security and assurance for family wealth protection and succession, and cross-border investment. We are one of the most recognised professionally respected names in the international fiduciary services industry, as Asiaciti Trust has roots dating from the nineteenth century, and was established in its current form in 1978.
Asiaciti Trust is headquartered in Singapore, but has operations across the globe, including the Cook Islands, Dubai, Hong Kong, London, Nevis, New Zealand, Panama and Samoa. Additionally, we also offer services in the British Virgin Islands, Bahamas, Cayman Islands, Seychelles and elsewhere.
Could you go into more detail about the areas your company specialises in?
Asiaciti Trust has three main areas of specialisation.
Firstly, we are an independent trustee, and in this capacity our main role is to protect family wealth and ensure that it is passed to the next generation and that it is used in accordance with defined wishes or objectives.
Secondly, Asiaciti Trust is a private fund administrator, serving both private families and corporates both in relation to private wealth and investment activities, often cross-border. Lastly, we are a corporate services provider, providing administration services for companies in many jurisdictions worldwide, to facilitate international investment.
What sort of clients do you typically serve?
Generally speaking, Asiaciti Trust serves both private and corporate clients. Private clients come from many different countries but tend to have a consistent profile: usually, they are entrepreneurial business families with business and private wealth in several locations, and they come to us for governance and legally robust assurance in protecting their wealth and ensuring succession. This can be in relation to family businesses, financial estates, real estate and personal assets such as art or yachts.
As for corporate clients, they come to Asiaciti Trust to ensure legal security and independent administration in respect of cross-border investments, sometimes involving joint ventures. We help to structure the legal aspects of the project in a way which protects the interests of all parties and creates a robust basis for the underlying business activity.
What are your thoughts on the ever-changing, complex world of private funds and how they are rising in popularity with wealthy individuals, who are willing to pool wealth and assets for a collective goal?
In Asiaciti Trust’s experience, private funds can prove very valuable in wealth planning for individuals and families. Above all, the robust governance and reporting they provide gives all investors assurance and clarity about how their assets are being managed.
It is perhaps also significant that funds are generally a readily-understood vehicle, although sophisticated, they are nonetheless familiar to most people.
It is worth mentioning that a private fund may not have any outside investors; the investors in a fund may all be members of one family, and the fund structure simply provides a legally robust and clear basis for managing the family wealth. The fact that each member of the family can be assigned units in the fund, and will get their own performance reports, makes the family private fund a very clear and wellunderstood vehicle. This aids communication and avoids potential misunderstandings or disputes which can sometimes become very damaging in family wealth governance.
In other cases, there may be co-investors, often small groups of investors who know each other and come together to pursue a common investment plan, either using a particular manager whom they know and trust, or in relation to a specific investment objective.
In such “investment club” situations, a properly run private fund gives each investor the assurance of independent governance and administration, and independent, comprehensive reporting – which can be fully customised by level of detail and frequency, to the clients’ specific requirements. In this context, it is also worth mentioning that Asiaciti Trust would normally recommend that a private fund is independently audited, which again provides important assurance and protection to co-investors.
How can private funds help simplify complex financial arrangements?
A properly structured and run private fund brings a high degree of governance and independent assurance to the administration of the fund assets. It also provides a very simple and flexible holding arrangement for those assets.
Typically, a number of sub-funds would be used, and these can be defined according to particular assets types (such as property, pharmaceuticals and IT), or some other parameter such as geography, vintage (2015 fund; 2016 fund and so on), or investor groups. It is also possible to issue investors with different types of shares giving different rights. For example, in a family fund situation, the stakes held in the family business might be inalienable (or can be sold only to other family members), but stakes in a financial sub-fund could be cashed in whenever desired, thus giving investors easy liquidity.
Basically, a private fund is a bit like a set of Lego bricks; you can build almost any structure you want. The important thing is to be very clear on the needs and preferences of the investors, and to consider how these may change over time.
How can your firm help ensure a profit is made?
Asiaciti Trust is a wholly independent fund administrator and trustee. A fund would typically have a fund manager responsible for investing the assets and they would be accountable to the investors for the fund’s performance. Very often in a private fund situation, investors will be working with an asset manager or managers whom they already know, and our firm’s role is to create and administer the fund structure so that existing or growing investments can be handled in a more efficient and secure manner.
Financial services firms across the spectrum are being affected by globalisation. What has been your firm’s experience of this phenomenon?
The industry is subject to extremely rapid change through the forces of globalisation, regulatory change and the enormous growth in cross-border corporate and private wealth. Some aspects of our firm’s business are relatively new – for example, private funds have grown enormously in recent years; some are very old – the trust industry dates back about 800 years. Whilst the business environment changes rapidly, the core needs of our clients – for legal security and reliable independent administration – do not change.
Lastly, do you have any plans for 2016 and beyond that you would like to share with our readers?
Looking ahead, there are many challenges facing us in the future. The industry continues to experience increasing regulation and compliance reporting, which is good in many ways, as it increases standards and enhances the industry’s reputation, but it does inevitably drive up cost.
Alongside this, the general financial and economic instability, and exceptionally low interest rates, make for a difficult global investment climate. In this context, private funds are growing; partly because they facilitate very specifically targeted investment activity, as well as providing a secure and credible investment vehicle.
In terms of our future, Asiaciti Trust is confident that we will continue to succeed. As a family-owned business that has always grown organically, our firm’s strategy has always been a very simple one; we work closely with our clients, listen to them, and develop the firm’s services to meet their needs.
Many of our private fund structures are customised to specific client requirements. This is a great way to work but it does mean that Asiaciti Trust doesn’t necessarily know what the future holds – it all depends on client demand. I would say in closing that our firm’s approach has served us so well over the past number of decades, and one that will hopefully continue to bring Asiaciti Trust success in the future.
Company: Asiaciti Trust
Name: David Inglesfield
Address: 78 Pall Mall London
SW1Y 5ES / 02-03 Winsland
House II, 163 Penang Road,
Phone: 0207 630 8593