PRIVATE LABEL FUNDS
Our private label funds are tailored-made funds that we structure and asset manage, but which are sold or distributed to investors by our clients under their own brand name.
The intention of a private label fund (PLF) is that the end fund product carries the branding of our client and that Caerus only works behind the scenes. Typical client categories for this arrangement include European and Middle Eastern private banks, wealth managers, financial planners, fund platform providers and other various financial product issuers and arrangers;
In partnering with Caerus, equity distributors benefit from our expertise in asset sourcing, fund structuring, regulatory compliance, ongoing asset management, fund administration and investor reporting (in the client’s desired format).
Private label products can be complex to structure depending on the individual needs of the issuer, and in turn, the needs and wants of their ultimate clients. Accordingly, PLF solutions need to be devised and structured in close cooperation between the client and ourselves.
Clients decide what activities they wish to assume themselves and which ones they wish to delegate to us. With Caerus as a partner, clients perform only those activities in which they specialise, and for which they have their own resources and know-how – such as equity sales.
All other activities are assumed by Caerus or one of our specialised partners. These include, amongst other functions, regulatory management of the fund and administrative tasks, offshore tax structuring and expert asset management post launch of a fund.
The financial benefit of PLF’s to the client is that the client can cost effectively add real estate exposure to their investment product suite with little to no fixed costs in creating or maintaining their fund.
All fund structuring and ongoing management expenses are borne by each fund vehicle, with the flexibility to structure fees in a number of ways including profit shares over a minimum cash-on-cash return, or more traditional performance fee structures calculated at exit or realisation of the vehicle’s assets once a threshold total return has been achieved.
After the launch of each PLF, Caerus acts as a behind the scenes management company providing all financial, market research and operational updates in a form readily customisable for each of our partner’s needs.
In general terms, establishing a private label fund involves six main phases:
- Deciding the investment strategy of the fund and how that fits a client’s needs;
- Legal and tax structuring of the fund entity;
- Asset selection, acquisition and debt implementation;
- Equity sales and distribution;
- Asset management of the fund’s underlying real assets;
- Investment management including periodic financial reporting to the distribution partner;
The private label approach enables the client to monitor the performance of the underlying asset manager and to make changes without the member having to transfer from the old to the new manager if a manager is replaced and also without any change in the unit price. Most schemes that offer a self-select option include a real estate fund.
In many cases, these are ‘private-labelled’ so that the fund name reflects the scheme name and describes the asset class rather than the asset manager, as in ‘the [scheme name] Property Fund’. This enables providers to change the underlying asset manager without having to arrange for members to transfer their funds, which can be a complex process under contract-based arrangements. It also encourages members to consider asset allocation rather than asset managers.
Caerus as the asset manager need not be named facilitating that in a
self-select scenario, investors choose real estate as an asset class option rather than making their allocation decision on the basis of the name or brand of a particular manager.
Clients will be given a dedicated relationship manager approach to ensure that you receive support from the same person over the long term, from fund conception through to fund realisation.
Regular conference calls and meetings are also part of this approach, ensuring a continual exchange of information that ensures transparency and accountability.
Additionally, each fund has either its own investment committee or fund board of directors, upon both of which, we encourage that our partner have physical representation on to ensure timely and interactive decision making.
Private label fund solutions are highly individual. It is crucial to find the right solution for your particular needs. Ensuring that your product has the right legal form and reaches the market at the right time is also essential.
In terms of investment strategy, clients can choose that their PLF cover specific geographies, asset classes such as offices, retail or logistics, risk and return profiles such as core or core-plus or be income or absolute return focused e.g. yield versus a target equity multiple or annualised IRR.
On the administrative side, there is also a broad selection of options to choose from such as:
- Choice of name for your private label fund;
- Choice of investment strategy;
- Choice of domicile (Malta, Luxembourg, Switzerland or the Cayman Islands);
- Exclusive distribution rights and use of your own distribution channels;
- Choice of pricing for your investors;
- Full set of portfolio data for your private label fund;
- Registration of your fund;
Fund administration services are provided by any external provider of fund and corporate services that the client may wish to use. Such services include fund administration, corporate secretarial, accounting, consolidation, tax and legal compliance and debt administration services. This includes calculation of tax data for you, reporting and publishing in the relevant fund domicile and the reclaiming of withholding tax based on double taxation agreements.
Individual tax structuring advisory is provided via one of our strategic alliances whose principals have decades of experience and knowledge in this ever increasingly complex area.
- Speed to market; private labelling can help financial institutions to reduce the time normally required to introduce a new product or product range such a real estate;
- Cost savings by eliminating the overhead burden of building up a specialist in-house team by outsourcing specific services to a partner with the requisite know-how and experience.
- Established back office reporting tools and procedures;
- Clients are free to choose the name of the fund;
- Choice of fund domicile and jurisdiction;
- Via shared investment management arrangements, partners can build up their own track record;
- The benefit of institutional quality processes and structuring at a fraction of the normal overhead cost;
- Market access providing the ability to acquire quality properties which are typically out of reach of non-real estate specialists;
- Independent services; we are not tied to any particular bank or financial institution;
- Task allocation efficiency; you allocate to us as specialists, while you focus on your core business and maintain the client relationship;
- Regulatory oversight to ensure proper corporate governance and asset protection. Caerus as a group has recently applied to be regulated by the UK FCA while your PLF can be regulated by the applicable jurisdictional regulator i.e. the CSSF pr Maltese Financial Services Authority (MFSA).
- Client anonymity; whether via the use of nominee vehicles or via the agreed outsourcing arrangement, we will never have access to the clients of our partners, preserving UBO identity;
- Tailored fund reporting; our reports can be provided in various languages in a format which enables easy rebranding or insertion into larger reports;
- Multiple fund domiciles: Via our business partners, we can structure funds which are also domiciled in Luxembourg, Switzerland, Lichtenstein, Ireland, the Cayman Islands and Bermuda;
- Flexible fee structures according to a client’s return requirements;
- Use of the latest IT via a secure client portal which contains up to date information on financial performance together with all legal and other documentation associated with your fund.
- Multiple currencies and FX hedging solutions for repatriation of income and capital gains in a desired home currency.