Fund distribution platform Allfunds recently launched a separate B2B platform for mandate solutions in Luxembourg. The new service aims to become the leading B2B sub-advisory platform in Europe and bring fiduciary knowledge to the wholesale sector.
‘We are a true B2B fund distribution platform that helps facilitate the fund distribution process for both fund houses and distributors.We are an independent company with no conflicts of interest. That’s unique,’ says Allfunds head of strategy Juan de Palacios. He spoke with Investment Officer, together with Stéphane Corsaletti (photo), the Frenchman who recently joined from ABN Amro Investment Solutions to take on the role of chief investment officer.
Corsaletti will launch a B2B sub-advisory platform with mandate solutions on behalf of Allfunds after summer. He sees great opportunities for this concept, because there is a need everywhere in Europe for outsourcing services that are not part of the ‘core business’ of banks. ‘There will be a time when professional parties, like banks, realise too much time and money is being spent on investment services and that it would be better to focus on client relationships in a different way,’ he says.
Rabobank
In this context, he refers to Rabobank of the Netherlands, which decided earlier this year to leave manager selection for its client portfolios to BlackRock. At the time Michael Grüner, who heads BlackRock Wealth EMEA, predicted in an interview with Investment Officer’s sister publication Fondsnieuws that this market will reach a size of €500 billion over the next three to five years.
Corsaletti shares this positive assessment of the growth potential of this sub-market. ‘There is an appetite for outsourcing everywhere, even in mature markets such as the Netherlands, as we saw earlier this year with Rabobank,’ he says.
The Frenchman plans to launch his initiative after the summer, with initially 15 to 20 long-only mandate solutions. Over time, he wants to expand this to 50-100 such wrappers. In mid-2021, he wants to offer solutions for alternative investments too. Corsaletti believes there is ‘enormous demand’ for alternatives as well, but individual asset owners are often unable to raise sufficient capital for asset classes such as private equity and private debt. Corsaletti thinks its feeder funds are a solution for this.
Luxembourg
The B2B subadvisory platform will be set up as a separate business unit in Luxembourg. The strategies, which will be selected by Allfunds, will receive a Sicav registration. The intended target groups are banks, wealth managers and institutional investors. According to Corsaletti and strategist De Palacios, many market players want to optimise their open architecture and outsource parts of the value chain. This can range from portfolio construction to full implementation.
Corsaletti says he understands the open architecture implemented in the Netherlands 20 years ago is already evolving into a form of guided architecture. ‘It is almost impossible to do fully open architecture, as it involves selecting and monitoring of thousands of funds,’ he notes.
Corsaletti will be able to use Allfunds’ huge infrastructure for the launch of the B2B advisory platform. Founded in 2000 as a fund distribution platform in Spain, it has evolved into into a wealthtech with a wide range of services in the areas of data and analysis, trading and execution, portfolio and reporting tools, research and regulatory solutions.
Allfunds now has more than €620 billion under management and offers 90,000 funds and products from more than 1,700 fund houses. It operates in 12 countries, with clients in 51 countries and cooperates with 700 distribution partners. It does not operate locally in the Netherlands and Belgium, but does have offices in Luxembourg, the United Kingdom, Switzerland, the Nordics and Southern Europe, and also in South America, the Middle East and Asia with plans to shortly open an office in Paris.
In 2018 the Spanish fintech company Finametrix was acquired. This was followed by the launch of “Allfunds Connect”, which allows digital on-boarding to the Allfunds platform, data analytics, and access to over 180,000 funds.
2019 also saw Allfunds involved in several more M&A transactions including Nordic Fund Market from Nasdaq and Credit Suisse InvestLab. In exchange for this, the Swiss bank now has a minority interest in Allfunds. At the end of 2019 Allfunds also announced an agreement with BNP Paribas group seeing the transfer of their Banca Corrispondente business to Allfunds as well as the management of distribution contracts of third-party investment funds. Pending approval the deal is meant to close in Q3 2020.