Dear Clients and Friends,
With the resurgence of turbulences in the financial market and the fear factor coming back into the mind of investors, it is a good time to come back on the subject of custody and to underline the model of safekeeping offered by MFEX to Mutual Funds holders.
MFEX - The name Mutual Funds Exchange was chosen exactly to define a security in the custody that resemble more that of an exchange rather than the actual over the counter pipework that is still often prevalent with Banks.
Custody architecture and safety
The first element is MFEX is fully independent and does not carry any position for its own account or affiliates in its books; therefore there are no risks of confusion in terms of ownership of assets. After 2008 it took years to fund holders banking with Lehman Brothers to recover their assets.
MFEX deposits all Mutual Funds positions at the official TA of the Fund Company (even in France). There are no other intermediaries. In case of bankruptcy, the assets and their respective owners are immediately identifiable and can be recovered at once without any litigation. In fact, the distributor remains the legal owner of the assets.
No conflict of interest
MFEX is NOT a subsidiary of an asset management or a banking group, where conflict of interest issues can arise and give way to potential litigation or delays. MFEX operating architecture is ONLY for the interest of external asset managers and their clients. All positions are duly registered on both sides. All Fund Companies know who their entitled fund holder are, and reciprocally all Distributors know where its positions are deposited and under what name.
The automation of processes and the effectiveness of the audit trail make it virtually impossible to be subject to fraud, embezzlement or misappropriation. It is a critical element in today modern banking processes and one that will also be a prerequisite in all future development in digital banking processes.
MIFID 2 compliance
MIFID 2 is bringing new stringent constraints into the activity of collecting rebates as remuneration for distribution of mutual funds. The distributor will have to be able to segregate and identify every rebate income by type of business and underlying client in order to justify it. There will need to be new investments in systems in order to administrate the legal and operational implications of those changes.
In conclusion safekeeping assets with MFEX is unique and much more tailored for a brave new world of boom and bust markets where the traditional banking model will be increasingly challenged.
4 new Fund Companies on MFEX
We are pleased to inform you that four fund companies have joined the 615 existing ones on MFEX Platform between July-August 2015.
S.E.A. Asset Management is an independent fund manager based in Singapore, founded in 2007. S.E.A. manages money for high net worth individuals and family offices through discretionary tailored portfolios and collective investment vehicles as well as through investment advisory services. S.E.A. specializes in Asian equities and fixed income with focus on small and midcap value equities and high yield bonds. The investment philosophy is based on fundamental, bottom-up stock picking that has outperformed the relevant benchmarks.
Davis Funds SICAV (Lux)
Davis Advisors is an independent, employee-owned investment management firm founded in 1969. Their time-tested investment discipline is offered to clients through mutual funds, variable annuities, separately managed accounts, and offshore funds.
Davis seeks to build wealth for shareholders through a patient, long-term investment approach. We believe stocks represent ownership interests in businesses and therefore rigorously research company fundamentals. We are highly sensitive to valuation, as price is an important component in generating attractive long-term investment results.
GS&P Kapitalanlagegesellschaft (DE)
GS&P Kapitalanlagegesellschaft S.A. is a privately owned investment manager. The firm manages mutual funds for its clients within several niche strategies. It invests in public equity markets. The firm employs quantitative analysis to make its investments. GS&P Kapitalanlagegesellschaft S.A. is based in Luxembourg.
Chaussier Gestion (FR)
Chaussier is a Paris based Asset Manager. It specializes in private client portfolio management (mandate or life insurance).
Chaussier focuses on stock-picking methodology that combines multi criteria analysis, proprietary research and direct relationships with companies. Chaussier Gestion manages 4 funds, of which two are specialized in French small mid-caps segment.