This site uses third party analytics cookies. Continuing the navigation over the following banner or closing the same is expressed consent to their use.

Understanding Investing 简体中文网页 Members section

A journey from 1989 to the creation of the ALFI TA Steering Committee

A Testimonial

It all started in 1989…

Arriving in Luxembourg in January 1989, to be  greeted by a heavy freezing fog that caused the plane to be diverted to Brussels, with a coach ride from Brussels to Luxembourg airport, where immigration and customs had to be completed, was an interesting experience. Having left Bermuda with blue skies and a temperature of 16 Celsius the previous day, grey skies and 3 Celsius was one of the many changes that I adjusted to during my initial year in Luxembourg.

My initial assignment was for 6-9 months and lasted for 26 years including the acquisition of a converted farm in Cattenom, France in 1992, as the cost of a similar size property in Luxembourg was much more expensive by comparison.

Sue Lee, a founding Member of the ALFI TASC at the ALFI TA and Distribution Forum in 2014.

Bank of Bermuda, my employer at that period, had incorporated a bank and management company in 1988 to provide fund administration services to two new clients. One a US fund manager launching its first European UCITS with initial distribution in Italy and, the second an Asian client launching an FCP requiring daily prices and dealing contracts to be available 9 am Asia time. The FCP was invested in US securities with hedge to the Asian currency so valuations were completed after 10pm.  In addition, like other fund services providers and fund managers, 1989 was the year for ‘Administration Centrale’ to be effective requiring Luxembourg domiciled funds to be serviced from Luxembourg. We had three clients with daily dealing multi –currency pricing that required business to be insourced from various locations.

The challenges of creating a team of experienced transfer agency resources who spoke, understood and wrote English, plus support for distribution in Italy and willing to work the ‘late shift’ was not always easy to find.

As most of the staff that were recruited, were either Belgian or French, with some English/Irish and a few Luxembourgers, I decided to enrol in French evening classes to be able to converse with the team and external service providers.

Luxembourg and Ireland leading the fray of cross border fund servicing

The mid 1990’s saw changes both in; 1) the Luxembourg market with the increasing focus on cross border business, expanded regulations on UCITS, AML/KYC and 2) the development of the Irish financial services industry which included fund domiciliation and servicing. Irish resources at one point represented almost 10% of the fund administration staff in Luxembourg. With the developments of the fund industry in Ireland, this pool of experienced staff decreased significantly and had to be replaced with enhanced internal and external training programs to Luxembourg based staff.

At the same period, there was the initial development of the Alternative Investments fund business into the European markets. Predominantly Hedge Funds and Fund of Fund structures, managed by UK/US companies with funds being primarily domiciled in Cayman, and to a lesser extent in Bermuda and the Channel Islands. These structures created further challenges in the fund business, as they were not governed by Luxembourg regulations in the early stages; the investor dealing process was more complex than the UCITS structures.

1999 - The birth of the Luxembourg TA community

10 years after my arrival in Luxembourg, a small number of us decided to create our own dedicated TA-specific community. The initial ALFI TA Steering Committee meetings focused on automation, AML/KYC, preparation for year 200 (Y2K) and the Euro. Let us not forget that, by the mid-1990, we were already starting to witness the start of true global distribution for Luxembourg-domiciled funds.

Prior to the creation of the ALFI TASC, several service providers and fund managers met on a semi regular basis to discuss issues of common concern with two key topics being a central database for Distributor management and creating common guidelines to support investor KYC.

Sue Lee

A founding Member of the ALFI TASC

Global Product Manager, HSBC Luxembourg

Updated on 05/11/15  
Share |