In the final instalment of a two-part series, Alan Dundon, chair of the Luxembourg Alternative Administrators Association (L3A), talks to Paperjam about education, the coordination of projects and the promotion of technologies to avoid disrupting the tail wind in asset growth.
Sylvain Barrette: What type of programme should be developed by the University of Luxembourg to better serve the industry?
Alan Dundon: We’d like to see masters in fund administration or masters in private assets. There’s already a certain level of training, but it’s offered by the industry rather than the university. All our members would be fully supportive of a programme that would bring in young graduates that would give them a head start in the industry. L3A promotes internships as well. Our bold statement is, ‘how can we make Luxembourg the internship capital of Europe.’
We have offshore centres servicing business from outside of Luxembourg for Luxembourg. The reason for that is that we can’t find enough new people to come here. It’s expensive and it’s housing. We’re not going to fix the housing problem, but you train and build some profiles, so they come in maybe a little bit higher on the ladder and are able to earn enough to be able to live here or live in the Greater Region.
Sylvain Barrette: Which services provided by your members have the greatest bang for the money spent by an alternative fund?
It all starts with basic accounting. Some managers try to do it themselves, but it’s very difficult to find the right sort of profile that wants to stay within the same manager for his whole career producing the numbers, ensuring that they meet all the standards and the regulation. All that under a schedule that’s increasingly demanding by the investors who wanted them in 60 days and now want them in 45 days from the quarter end.
“The industry has increasingly simplified the way in which managers can interact with their investors to allow them to focus on fundraising… so that servicing investors is now done in an automated way, mainly through web portals.”
Sylvain Barrette: Which is the best known “initiative or project that has been centrally coordinated by L3A as it was too costly or difficult for members to undertake individually?”
Everything we do is try to fulfil that. We’ve produced a study on substance, for example, to assess the best practices for the industry by getting the best minds together. You want to ensure that your entity and your governance are set up right, that your tax position is secure and that you will not get challenged. We got our tax and regulatory group together, about 15 people to define how good substance looks like. We organised a conference and produced a 50-page paper that is now out in the industry. It’s on our website. We sent it to our clients at home and abroad.
Sylvain Barrette: Has AI made inroads in the product offerings of your members?
It’s early stages, right? We’re already using AI in our depository. We’re looking at thousands of payments every day to make sure that these are in line with expectations. We’re using AI to give us a first view to assess whether it makes sense in terms of history and transaction volumes. Does that all make sense? Before we would have people looking at each individual transaction.
Sylvain Barrette: What are the greatest threats for the industry?
Is the industry threatened? I think the industry is growing. The threats or the challenges around, are whether you are able to service that [growth] and manage $30trn by 2030? The industry has historically been quite manual, because every transaction is a bit different. It’s not like the public market, of course. The growth in volume must be matched with a similar pace in automation with evolving technologies and AI.
I think regulation is a good thing, but you just need to be careful that you don’t swing the pendulum too much in a way that it becomes a real break on the growth of the industry.
Full article is available here : “Growth must be matched with a similar pace in automation” | Delano News
Library photo: Matic Zorman
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