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Prestige registers funds for sale in Switzerland via OpenFunds Investment Services AG

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Prestige Fund Management has registered its direct lending funds for sale in Switzerland with OpenFunds Investment Services AG, an independent Swiss legal representative and distribution agent. 

Swiss law now requires that foreign funds intended for distribution in Switzerland appoint a Swiss representative, distributor and paying agent. 

Although foreign funds marketed to qualified investors in Switzerland do not have to be regulated by FINMA, from March 2015 funds relying historically on private placement have been required to appoint a Swiss representative along with a paying agent, which must be a Swiss licensed bank. 

Swiss representatives are responsible for ensuring that a fund’s distribution activities comply with Swiss law and the representative itself must be regulated by FINMA. The representative must also keep the fund’s manager informed about changes announced by the Swiss authorities and the courts. Representatives are now playing a critical role in the ongoing distribution of foreign funds in Switzerland, which remains one of the largest wealth management centres in the world. 

Prestige has registered three funds with Open Funds Investment Services, namely Prestige Alternative Finance, Prestige Select Finance and Commercial Finance Opportunities. All three are lending funds; Prestige Select Finance has an international mandate, while the other two are UK-focused funds. The funds are domiciled in the Cayman Islands and Luxembourg. 

Prestige has been operational in Switzerland for over eight years and now has over 50 institutional clients using its range of specialist direct lending funds. The funds make use of both asset-based and invoice-based lending strategies, using specialist lending teams to achieve low volatility and low correlation returns. 

Craig Reeves, Founder of Prestige Fund Management Limited, says: “Switzerland remains an important market for Prestige and for many alternative fund managers. Clearly our direct lending strategies are increasingly attractive to a wider audience seeking yield as investors adapt their definitions of risk in a world of ‘low-flation’. OpenFunds is staffed by a team of experienced professionals with a strong understanding of the practical requirements of local Swiss regulations and we felt this was essential for us in our ongoing distribution activities in Switzerland.” 

OpenFunds is licensed under Swiss law to act as a legal representative and also advise their clients on distribution strategy. Its principals have decades of experience in distributing funds to qualified investors in Switzerland and the Middle East. There are now over 70 funds registered for sale with OpenFunds. 

Wolfgang Landl, Senior Partner responsible for legal representative services at OpenFunds, says: “At OpenFunds we only work with investment managers that have undergone a strict process of due diligence, including operational, legal and investment criteria. We also work with our clients to facilitate the appointment of a Swiss paying agent, which is now required under Swiss law if they are going to distribute funds here. Most of the funds being distributed to qualified investors in Switzerland now fall under this regime and we would urge investment managers with Swiss distribution plans to appoint a representative in Switzerland as soon as possible.” 

Any offering or advertising of non-Swiss funds in Switzerland is now regarded as distribution, with very few exceptions. The new rules came into force in March 2013, when fund promoters were given two years to become compliant. Under the new regulations, distribution agreements between representatives and distributors will also have to be revised to reflect new legislation.

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