Marking its first anniversary in Luxembourg, Warsaw-headquartered depositary services firm Q Securities on Wednesday said that it is aiming for 30 alternative funds as clients by this end of the year and 50 funds next year, up from the 20 it has onboarded in its first 12 months in the grand duchy.
The firm’s client base currently holds some 400 million euros in net assets, and it now employs a local staff of nine people. An “unabating” level of activity by alternative fund managers makes the firm upbeat about its outlook, its CEO told Investment Officer.
“Luxembourg continues to be a very attractive place for setting up alternative funds due to the well-developed ecosystem,” said Agnieszka Sawa, Q Securities CEO. “The market has a lot of support from the regulator, which backs and talks with the market, and is an active participant. This leads to its supervision being rather ex-ante than ex-post. Due to Luxembourg’s excellent reputation, the activity of alternative fund managers is unabating. We see a strong business potential for our depositary services, which are complementary to the offering from banks.”
Licensed as non-bank depositary
Q Securities last year became the first company in Luxembourg to offer depositary services under an investment firm licence, which authorises it to provide a much broader scope of services than other non-banking depositaries.
“It’s fair to say we’re pioneers of this type of offering,” said Piotr Zaczek, country head for Luxembourg. “Our licence allows us to offer a much broader scope of services than traditional non-banking depositaries. At the same time, we’re much faster-to-market than a banking depositary.”
Strong demand for fund services
The company said it entered Luxembourg at an optimal time. Credit institutions were increasingly reluctant to offer depositary services, and many fund managers were left in limbo. With banks pulling out from this market segment, fund launches were delayed because it is necessary to have a depositary to launch a fund.
Among Q Securities’ clients are hedge funds, private equity funds, real estate funds, and several Specialised Investment Funds, known as SIFs.
“Signing the first SIF client was a milestone, showing our diverse expertise,” said Grzegorz Cieslik, conducting officer, who joined Q Securities in February. “The CSSF needs to approve the appointment of a depositary for a SIF, and receiving the green light was an important proof of the service quality we offer.”
Due to the team’s growth, the company moved to a bigger office and is now at 46A Avenue JFK in Luxembourg-Kirchberg. As CEO, Sawa said the firm notices a relatively high level of turnaround in Luxembourg, but that the firm manages to deal with the hiring challenge because it can tap in Poland, “where the labour market is much larger than in Luxembourg”.
Q Securities was founded ten years ago in Poland, where it nwo is the biggest non-banking depositary for alternative funds. In Poland, the firm also offers equity and debt financing, securities safekeeping, and brokerage transaction services for a variety of instruments.