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Expanding to the U.S.

Entering the U.S. by way of partnership

The Brief:

A global investment management company regulated by the UK’s Financial Conduct Authority (FCA) had a successful practice in Europe and in 2009 began exploring ways to enter the U.S. market by way of a plug-and-play platform.  The firm now has offices in the U.S., including New York and Boston, and manages over $41 billion of assets across various global and regional equity strategies and a multi-asset strategy. Approximately $15-$17 billion of the assets under management are invested in the firm’s eight mutual funds, with multiple share classes, which are all underwritten by Foreside.

The Approach:

It was recommended to the firm that they enter the U.S. via the Series Trust route.  This structure allowed them to have various service providers pre-determined. The funds were launched as a start-up fund family as part of a multiple series trust and swiftly grew from their initial seed capital.  Since the firm’s inception in the U.S., Foreside has served as the dedicated legal underwriter, Fund Chief Compliance Officer (CCO), Fund Principal Financial Officer (PFO) and has provided registered representative licensing for their sales team.

During the client’s initial growth phase, the firm relied heavily on the Foreside team. Foreside’s relationship manager has many years of experience navigating the often-draconian corners of the U.S. mutual fund distribution marketplace and provided continuous distribution consulting support to the firm.   Start-up funds face enormous headwinds in competing for assets and gaining an informed understanding of the intermediary marketplace.  In addition to administering and executing the necessary agreements on behalf of the funds, Foreside provided the firm with ongoing support to help the client execute upon its distribution strategy within the marketplace.

As can be common for a firm with substantial growth while operating within a series trust, the client decided to transition out of the multiple series trust format in 2021 to reorganize into their own proprietary trust.  The client considered a variety of options, including establishing and operating their own broker-dealer to handle the servicing for its funds.

The Result:

The challenges and needs of Foreside’s clients often evolve over time and Foreside has demonstrated the ability to pivot with our clients, no matter the hurdles.  Ultimately, the Firm’s deep relationship with the Foreside service team, specifically the Fund’s acting PFO, and strong rapport with the distribution consulting and dealer services teams, motivated the firm to maintain its relationship with Foreside as its broker-dealer.  Foreside will continue to support the firm in this endeavor as the distributor to the Funds. Foreside will also continue to provide the registration and supervision for the firm’s registered representatives activities. Additionally, the firm will look to Foreside to continue to serve as the fund’s treasurer (PFO) in this transition.  Foreside’s extensive expertise and familiarity with the challenges of a fund reorganization have been a tremendous asset for the firm during this transition period.  The firm expressed its explicit trust in viewing Foreside as an integral partner in the future of its fund business.

 

 

All situations are evaluated, and results may be different depending on the situation. It is important to note these case studies are not testimonials but examples of strategies that have been deployed to assist our clients. These examples may not be representative of your experience with Foreside and do not guarantee that you will experience the same or similar results.

Foreside and its affiliates do not provide tax, legal, or accounting advice. The case studies are provided for informational use only and should not be relied on for tax, legal, or accounting advice.