One of the big focuses for the firm is ongoing regulation, in particular AIFMD and FATCA. With respect to FATCA, DMS was able to steal a march on its competitors in 2014 by establishing a FATCA Responsible Officer (FRO) role, six months before anyone else.
“Our principal, Don Seymour, identified FATCA as an area to work on three years ago. We got the teams set up, the systems and the processes set up so that when managers came to us, we were ready from day one to support them in respect to FATCA compliance,” comments Derek Delaney (pictured), Managing Director of DMS Offshore Investment Services (Europe) Limited.
Whilst over half of DMS Group’s clients have decided to use its FRO service, an equal amount of uptake has been seen among non-DMS clients. Part of this growth has originated from legal firm referrals, as Delaney explains: “Law firms would tell managers that they needed an FRO in place, but when it came to internally deciding who would take on that role a lot of these law firms began referring clients to us. We have built a lot of law firm relationships on the back of their endorsements of our FATCA solution.”
The FATCA solution is delivered out of DMS’s Cayman, Ireland and Luxembourg offices and supports all global funds. Whilst other firms are still ironing out the creases of their US FATCA solution, DMS has already moved on and developed the necessary policies for UK FATCA and the OECD Common Reporting Standards.
DMS Group has developed a suite of AIFMD solutions. Not only does it have an AIFMD-compliant platform and registered AIFM (DMS AIF Management Company) it also offers Annex IV reporting services.
“Even when clients have decided not to go with a full European fund, they’ve still asked us to act as the Annex IV reporting party. During January 2015, we did 216 filings. Now, we are able to say to managers, ‘We’ve got the AIFM in place, the platform, we’ve gone through a successful round of reporting, so any uncertainties that existed with AIFMD are now in the past’. The only unanswered question is when the funds passport will be made available to non-European managers,” says Delaney.
Year-to-date the firm has won 11 AIFMD mandates, including one of the largest investment banks in the world. In total, it has 37 funds either using the platform and/or ManCo. “In addition, we have over 60 clients for whom we’re doing Annex IV. I would estimate that we will have more than 100 AIFMD clients by the end of 2015,” adds Delaney.
The majority of those new mandates are as a result of reticence among European institutions to invest in Cayman funds. In Delaney’s opinion, continental Europeans are increasingly going to want to invest only in European funds but still need access to US managers, to whom they are willing to write substantial tickets to set up an AIF: “That’s where our AIFM platform comes into play.”