MUFG Investor Services’ Alt Insider recently sat down with Paul Skinner, Global Head of Fund of Funds, to discuss how his team is helping clients in the current market environment, what makes our offering unique, how the business is leveraging fund financing, and much more.
Q: What does MUFG Investor Services do in the fund of funds space?
We provide innovative solutions for many of the world’s largest fund of fund managers and institutional advisors. With over $145 billion in assets under administration (AUA), MUFG Investor Services is one of the top fund of funds administrators globally and we remain committed to finding new ways to serve our clients. We have a full suite of services spanning Administration, Asset Servicing, Banking, Consulting, Corporate & Regulatory, Custody, Fund Financing, and FX Overlay. We also service asset owners directly across all major domiciles.
Q: How do clients benefit from our capabilities?
It can be costly and time consuming for asset owners to set up funds to invest in. Our outsourced trading model allows clients to access a plethora of funds which enables the diversification of their fund offering across different regions and markets.
Not only do we carry out trades and provide comprehensive reports, but we also offer clients the flexibility to determine the level of transparency they desire throughout the trade lifecycle. We can also support all fund types and domiciles.
Q: What makes our offering unique?
First of all, MUFG Investor Services is a division of one of the largest financial institutions in the world. This means our offerings stretch beyond the scope of solutions typically provided by other fund administrators. From custodianship to fund financing and securities lending, we offer a broad range of solutions that create efficiencies for our clients.
What also sets us apart is our speed of execution and ability to deliver. This is down to our heavy investment in proprietary technology and the fact that our banking department sits right next to our trading desk. We find clients, such as hedge funds, really benefit from this. This agility, coupled with our holistic and integrated approach, enables us to manage risk effectively while delivering rapid results.
Q: What challenges are firms currently facing with fund trading?
Institutional fund advisors are navigating increasingly complex financial markets. As a result, the front office function requires accurate portfolio data to continue trading expediently for their client base.
It is important to support these requirements throughout investment, however, there is a cost associated with supporting back-office systems, particularly in today’s high inflation environment. Simultaneously, the evolving landscape of cybersecurity threats and additional regulatory requirements further amplifies the complexity of resources and risk management.
Q: How are we responding to these challenges?
What we are seeing from our clients is that they are benefiting from outsourcing. Having confidence in a third-party provider such as MUFG Investor Services can make a significant difference by helping to simplify the trading process, reduce cost and mitigate risk.
Trades across a variety of position types can be sent to our platform for execution, providing end-to-end transparency of trade flow and settlement. Meanwhile, MUFG Investor Services’ fully automated, flexible, passive cloud-based system enables clients to analyze portfolio data in real time.
Q: Can you talk about how we help streamline fund trading?
Our trade execution platform delivers outsourced trade execution and order routing services with automated post-trade communications and workflows. This includes cash management and payments to third-party distribution platforms and custodians through our automated payment solution. As a result, clients benefit from extensive connectivity, as well as global asset and market coverage.
Q: How does our FX Solution help fund of funds clients?
Our FX Overlay solution offers clients a comprehensive, flexible, and cost-effective currency overlay hedging solution that simplifies hedging challenges. In the context of fund of funds, and more specifically, trading, our portfolio hedging solution mitigates the risks associated with FX exposure and facilitates the settlement of non-base currency trades. Ultimately, our services support fund managers by allowing them to focus on their area of expertise.
Q: And finally, how do we leverage fund financing?
Our financing solutions span asset-based and capital call facilities. From a trading perspective, we offer financing for subscriptions and redemptions, FX trade settlement and can bridge capital calls for closed-ended investment funds. Our scalable, multi-currency fund financing solutions are designed to work seamlessly together, to carry clients through a wide range of market cycles.