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Real estate fund managers requesting broader service range from providers

© Joel Filipe - Unsplash

PROVIDING A ONE-STOP SHOP SOLUTION

Subscription and redemption processes with securities can be mapped so well technically that they can be transferred into reliable electronic processes without major difficulty. On the other hand, real estate funds involve manual intervention when buying or selling items. This slowed the outsourcing trend for fund administration services to real estate funds for a time. However, after the financial crisis, restructuring at many asset management companies, and checking the contribution margin accounting and in times of robotic automation processes, many real estate asset managers are now looking for service providers that offer a onestop shop solution: Depositary and fund administration services from a single source. Why? The one-stop shop model enables CACEIS to provide a comprehensive solution covering banking, fund administration and depositary services. 

These services are performed by specialised teams dedicated to CACEIS's PERES (Private Equity & Real Estate, Securitisation) business line. In addition to CACEIS's one-stop shop service solutions, clients may also benefit from attractive value-added services such as FX trading, cash management, collateral management or EMIR services. However, with the creation of PERES at CACEIS group level, the bank points out the importance and strengthen its position as a leading player, share best practices amongst all servicing entities and provide bespoke servicing on a single or multijurisdictional basis through CACEIS's main centers of excellence. Besides, this integrated solution grants clients access to other teams of experts within the premium division of Crédit Agricole Group delivering tailored services.

A PIONEER IN REAL ESTATE FUND ADMINISTRATION

CACEIS, being a market leader as depositary for real estate funds, was early expanding its expertise to real estate fund administration by founding CACEIS Fonds Services. As such, the bank counts itself amongst the pioneers in the field of fund administration for open-ended real estate funds in Germany.

This is quite a strong position, helping to meet the group's ambitions – after all, the CACEIS group has €55 billion in Assets under Administration in the PERES business line. Consequently, the goal in Germany is to further enlarging the fund administration business with services for closed-end real asset funds and for securities funds as well.

Currently, the bank is involved in many conversations in the market and receives requests for proposals asking for services in both areas, depository and fund administration services. As each client project is unique, the services are all about customisation. Having worked with many different clients in different countries, it is clear that no two projects are the same.

ENSURING A SMOOTH MIGRATION

CACEIS had the opportunity to prove the experience by a large number of insourcings, takeovers and migrations for depository Real Estate clients across Europe in the last years. As such, the bank established an onboarding and migration approach with dedicated onboarding resources, project blue print and proven processes to ensure a successful migration in the shortest possible time, maximum risk mitigation and with an optimised use of resources on the client side. Based on the migration plan, each step of the entire migration will be closely coordinated with the client. Projects at CACEIS are carried out on a joint basis and, of course, the client will be involved on all aspects dealing with the migration by a representation in the various working groups and committees of the project. 

In addition, CACEIS started to develop a global IT servicing platform for private equity and real assets, which is shared by all entities and allows country-independent procedures based on the relevant business lines.

Clients will benefit due to one single interface and reporting solution, taking into account local market needs for all servicing countries. 

STAFF TRANSFER AND INTEGRATION

Taking over parts of a business from a client by a service provider, sometimes comes along with integrating employees or entire teams. Many asset management companies even make it a prerequisite. Therefore, CACEIS is open to taking over existing employees in case of an all-embracing outsourcing at the client-side. Certainly, the successful transfer of employees is one of the major success factors at the insourcing company. A comprehensive communication concept will help the employees understand the benefits of the new situation and to welcome them into CACEIS with all its opportunities including future career development. This is an important contribution to a smooth handover and to the continuity of business for the client.

In fact, CACEIS has a proven track record for insourcing business, processes and employees group-wide: In 2014, for example, the bank transferred the real estate depository banking activities – including employees - from a German competitor to CACEIS. 

In 2015, CACEIS took over the depository activities of another German competitor. At that time, both companies justified their withdrawal with strategic considerations. Shortly after, in 2016, CACEIS entered into fund administration for open-ended real estate funds in Germany by a lift out of the client's entire fund administration department. The growth and success of CACEIS across Europe is based on similar transactions.

OUTLOOK

CACEIS expects strong growth in the real estate funds business area for the years to come, no matter whether open-ended or closed ended funds. In addition to that, asset managers increasingly consider the outsourcing of non-core activities such as fund administration these days. Technological progress will even encourage these considerations in the future.