An innovative new platform has emerged in Pfaffikon, Switzerland that could potentially revolutionise the way investors gain access to global hedge fund managers. The platform is called Fundbase and is the brainchild of Michael Appenzeller (pictured), its co-founder and president.
“Qualified investors will have to look for alternative investments in an unprecedented investment environment. Today they very poorly advised. We are providing a gateway for these investors. With Fundbase, we feel we are at the forefront of keeping the Swiss market open for global hedge funds,” comments Appenzeller.
Fundbase Fund Services AG is the first FINMA regulated online platform to offer full representation services for the alternative funds market in Switzerland.
“Offering the legal representative service is just one element. We have built the technology for Fundbase to help managers increase their exposure, legally, and connect with Swiss investors; it’s about making investors and managers’ lives easier,” says Appenzeller.
The aim is to have between 2-3,000 managers listed on the platform by the end of Q1. Some will, of course, choose to use the Swiss legal representative function. There is no cost to any manager who then chooses to list their fund on the platform. From Q2 2015 onwards, Fundbase will enable investors to use a plethora of investment tools to search for, and connect with, managers they find interesting.
Fundbase offers a range of functionality for investors, managers, and advisors. Take, for example, the “Investment Channel”. Each channel can be branded according to the individual manager. A proprietary algorithm sits in the background, and what this does this is effectively compare a manager’s portfolio of followers to all other investors on the platform before recommending it to the right set of investors.
“It’s a business development algorithm. It only costs USD500 per month and guarantees to the manager a certain number of new investor visitors. The platform is live but we are still building a lot of tools and features such as investment management tools, an investor network/community and so on,” confirms Appenzeller.
There are only a small number of specialists providing the Swiss legal representative service to hedge funds. What Appenzeller has done with Fundbase, however, is identify a compelling opportunity to enhance the distribution component for global hedge funds. In that respect, it is a unique philosophy being offered to the market.
“We get asked a lot of questions by managers – How does it work? What are the contractual arrangements? If you’re not a specialist, the representative onboarding process for the manager can be cumbersome. We are in the process of doing due diligence on dozens of managers right now so the pipeline is starting to build,” states Appenzeller.
Lilian Klose-La Scalea is managing director at Fundbase Fund Services and views the changing regulatory environment in Switzerland as a positive.
“There’s a huge demand for fund distribution. What differentiates us from the competition is our network – other organisations cover the legal aspect but they don’t necessarily have a direct network of investors. We, on the other hand, have a network of qualified investors that we serve all day long. Once we understand their needs, we can connect them with managers quite easily.”
“In this regard, we think the platform will prove to be very successful going forward,” concludes Klose-La Scalea.