Taking the ‘super’ out of super ManCo

It used to be common to have asset management clients with combined operations for both Chapter 14 and Chapter 15 structures in Luxembourg.

These were known as ‘super management companies’ (super mancos) where the manager was overseeing both types of funds. These days, there’s a clear polarisation of work that is divided along product lines. So, while some asset managers still offer both types of funds, on the operational level, they are now much more divided.

The same, but different. This makes sense, because everything – from the systems to the staffing requirements – is different: while the types of jobs themselves are broadly similar, the product and the systems knowledge required is so completely different that it’s virtually impossible to make a mid-career change from one side to the other, without taking a step down to learn first.

Funds Talent specialist industries in Luxembourg - AIFM

Enter the AIFM

In Luxembourg, AIFMs grew at pace post-AIFMD and Brexit. In 2019, the same year that saw both Circular 18/698, and Brexit, virtually every major illiquid fund manager with sizable presence in Luxembourg, created an in-house AIFM on the ground.

In real assets, things just got real.

How circular 18/698 changed things

Circular 18/698 was written for UCITS (traditional fund) ManCos, but now applies to ManCos with an AIF (alternative fund) license too.

The pressure on these (usually smaller) firms to comply with circulars that were not always written for their asset type falls on a small number of skilled senior staff – from the CFO of the fund, to the Chief Compliance or Legal Officers, often Conducting Officers, to try and unpick. While the regulatory needs of these firms is changing so quickly, there is often a shortage of risk and compliance staff for jobs connected to that regulation. On the other hand, thanks to the shared understanding and the closeness of the community, information is always available through third parties and at industry forums.

We’ve supported many new and existing AIFMs on hiring staff, and can advise on what you might need to consider when hiring staff for AIFMs in Luxembourg.