Fund Administration Solutions
Spring 2016
Your fund services outsourcing partner
Executive Summary
Background and Setup
Tallinn/Helsinki -Operations and Management
 Current platform has been serving Northern
Star funds since 2007, spin-off into
independant service provider in summer
2014
 Management Company licensed in Tallinn,
notified/registered in Luxembourg
 Cost efficiency, optimal customer service
level, ’one stop shop’
 Optional in-house developed portfolio, risk
management and client reporting system
Luxembourg
 Custody / Principal Paying agent and
Domiciliary remaining obligatory in
Luxembourg
Limestone Platform* is providing fund administration services through our Luxembourg UCITS and
alternative funds (SIF) platform via specialist fund services division operating out of Estonia.
*Name change in progress, currently Northern Star AS;
Page  2
Executive Summary
Why Limestone Fund Services?
 Easy to bring new funds cost and time efficiently for the existing Platform
 Creating a new platform is getting more labour intensive (UCITS IV and V, AIFMD...)
 Scale benefits for the customers while the Platform is growing
 Seven years of experience in operating a Fund Platform in the Luxembourg environment
 Shorten Your Learning curve
 Constant system and process development
 Centralizing admin and operations in Tallinn / Estonia increases cost efficiency and
enhances risk management
 Local cost level in Estonia
 Experienced and competent personnel, good obtainability of educated people
 Centralized information management and administration of processes outright
 Control and flexibility towards bigger players or multiple service companies in
Luxembourg
 No extra personnel or administration requirements for the customer, as typically there is need to duplicate major
part of the Lux risk management and administration
 Technically advanced and flexible customer services and reporting
 Limestone Fund Service AS can additionally provide outsourced compliance and back-office services as well as
optional portfolio management tools
Page  3
Limestone UCITS and SIF Platforms
Structure and Service Providers
LIMESTONE FUND PLATFORM AS
Management Company - supervised by Estonian Financial Supervisory Authority (EFSA)
Local Investment Managers
LS Fund Platform in Luxembourg
IM/ Advisor (supervised by local FSA’s
Fund Umbrellas, segregated sub-funds, service providers – supervised by CSSF
LS, UCITS
Investment Manager X
•
Investment Manager Y
•
•
Investment Manager Z
fund umbrella, segregated
sub-funds
no investor eligibility
restrictions
EU passport distribution
LS, SIF
•
•
•
•
AIFM Directive compliant
product
fund umbrella, segregated
sub-funds
limited to informed investors
e.g. Institutions &
professional investors
EU passport distribution
Luxembourg service providers
Duvieusart & Ebel
DELOITTE SA
Legal Adviser
Auditor
KBL European Private Bankers (KBL)
Custodian Bank and Principal Paying Agent
Krediettrust Luxembourg / European Fund
Administration (EFA)
Central Admnistration, Registrar, Domiciliary
Page  4
Limestone UCITS Platform
Structure and Service Providers
Board of Directors
Board of the Fund
Duvieusart & Ebel
LIMESTONE UCITS
CSSF
Legal Adviser
Fund Umbrella
Supervisor
Limestone Funds AS
Management Company (notified EFSA – CSSF)
Registrar, Transfer and Admin Agent
KBL European Private Bankers (KBL)
European Fund Administration (EFA)
Custody and Principle Paying Agent
Domiciliary
Page  5
UCITS – Description of key roles
Placeholder for your own subheadline
Service Providers
Limestone Platform AS – Management Company
 Notification in accordance with UCITS IV in process
 Link created between Estonian and Lux FSA´s
 Instead of the current Kredietrust Luxembourg (KTL)
 Additional administration currently at EFA consolidated
also to the Platform
KBL European Private Bankers (KBL) – Custody,
Paying Agent
 Necessity to locate in Luxembourg according to local
legislation
Fields of Activities
 Management Company
General Management (including delegation management,
legal, regulatory matters) and Risk Management
 Administrative Agent
Fund accounting, NAV calculation (including pricing),
Preparation of the monthly, semi-annual and annual
reports
 Registrar and Transfer Agent
Keeping of the register of shareholders, control of Anti
Money Laundering / Know Your Customer
 Custody
Safekeeping of assets, settlement, income proceeds,
corporate actions, cash flow monitoring and oversight,
investment restriction.
European Fund Administration (EFA) – Domiciliary
Agent
 Paying Agent
 Administrative-, Registrar - and Transfer Agent roles
in process to be moved to the Limestone Funds AS
 Domiciliary Agent
Brokerage, Foreign Exchange, Forward Exchange,
Intermediation of third party Funds, Time deposit
Corporate secretary, legal life, listing agent
Page  6
Specialized Investment Funds (SIF)
 What makes SIFs attractive?
 The main advantages of SIFs are the kind of eligible assets, the level of permitted leverage, the multitude of available legal
forms, the type of securities it can issue, the flexibility as to the valuation of its assets and its light prudential supervision.
 Eligible assets. SIFs can invest in all asset classes, including, inter alia, equities, bonds, warrants, real estate, commodities,
financial derivatives, loans, private equity and microfinance.
 Leverage. Leverage of SIFs is permitted within the limits to be agreed on a case by case basis with the CSSF.
 Types of securities that can be issued. SIFs are allowed to collect funds by the issue of other types of
 securities than common shares e.g., debt securities and/or preferential shares.
 Valuation of assets. Asset valuation is in principle based on fair value unless otherwise stated in the SIF’
s constitutive
documents.
 Prudential supervision. SIFs must be authorised by the CSSF which approves their constitutional documents as well as their
custodian.
 Who can invest?
 Any well-informed investor, beyond pure institutional and professional investors, has access to a SIF. Accordingly, any
investor who confirms in writing that it adheres to the status of well-informed investor and either: • invests a minimum of
EUR 125,000, or • is assessed by a credit institution or an investment company under the EU Directive 2004/39 or a
management company under the EU Directive of 2001/107 as having the expertise, experience and knowledge in adequately
appraising the investment, can invest in a SIF.
 Risk-spreading
 In principle a SIF may not invest more than 30% of its assets (or commitments to subscribe) in securities of the same nature
issued by the same issuer.
Source: http://www.alfi.lu/setting-luxembourg/alternative-investment-funds/sif
Page  7
Specialised Investment Funds
Sample structure
1. Investment advisory role most common in practice but varies with
client structuring requirements
2. Luxembourg situate and regulated (or approved for auditors).
3. ManCos are only required for FCP Funds.
Page  8
Models for provision of portfolio management and investment
advice
e.g. LS acting as
ManCo with portfolio
management delegated
to the Client
e.g. LS acting as
ManCo incl. portfolio
management role with
investment advice
outsourced third party
Page  9
Other service providers - Definitions
 Investment manager
The investment manager is in charge of the intellectual management of the UCITS/SIF. The investment manager is
subject to CSSF prior approval. It does not need to be located in Luxembourg, but must be subject to regulatory
supervision. For investment managers located in third countries, there must be a cooperation between the CSSF and
the supervisory authority of the investment manager.
 Investment advisor
The investment advisor is a professional providing investment advice to a UCITS/SIF, either at the initiative of the
investment manager, or upon the UCI’ request, in respect of transactions relating to financial instruments. The
investment advisor is not authorised to intervene directly or indirectly in the implementation of the investment
advice provided. There is no requirement as regards prior approval by the CSSF.
 Distributor. The same party who is appointed as investment advisor can also act as distributor. The distributor is an
intermediary who is part of the distribution process set up by the promoter either actively participating in the
marketing of the shares/units issued by a UCITS or appointed in the prospectus or in any other document as being
authorised to receive subscription and redemption orders on behalf of the UCITS.
Page  10
What fund format?
Definitions
SICAV = Societé d’investissement à capital variable = investment company with variable capital
 Open-ended collective investment scheme common in Western Europe
 Can be both UCITS and SIF
 Fund umbrella, under which actual funds established
 Alternative fund umbrella form would be FCP = Fond commun de placement = ´mutual funds´ that are neither trust or
company law based and would require separate Luxembourg company for management and decision making – compare SIF
S.C.A
 Establishing a new fund umbrella would take approximately 2 months
UCITS = Undertaking for Collective Investment in Transferable Securities (Part I Fund, in Luxembourg regulations)
 SICAV UCITS is ´SA´= Societé anonyme = Company with a Board of Directors
 Actual Fund
SIF = Specialized Investment Fund (SIF law in Luxembourg)
 Is in Limestone Funds ´S.C.A´ = Societé en commandite par actions = Limited partnership
 Not a company as such; Requires General Partner – company for management and decission making
 Limestone Opportunities Fund Management SA as GP
Page  11
Why Limestone?
Creative cross border solutions
For Whom? For established or start-up Fund Managers with international marketing
aspirations
• Outsource administration and allow more focus on core business i.e. portfolio management and
customer relationships
• Go global - marketing Finnish / other local Nordic or Baltic funds can be challenging (cross border
registration, due diligence, fund marketing platforms etc).
• Accessibility- most customers have already accounts and existing clearing processes in Luxembourg
• Lack of nominee accounts in Finland is a hurdle for many international clients, agents and distributors
Why Luxembourg?
 Second largest fund center worldwide; almost 4000 funds representing almost 14000 sub-funds
totalling AUM over EUR 2,615 billion
 Competitive and worldwide well understood tax profile
 Fund environment in prime public interest – shows in flexibility, customer orientation and resources
 EU Directives typically directly implemented in local legislation
 Establishing new funds or altering existing ones effective in terms of process and timetable
 EU country with solid reputation as offshore locations as Cayman becoming less competitive
Why Tallinn?
 Cost level
 Corporate culture, expertise and availability of personnel at competitive cost
Page  12
How to proceed?
How to get started?
 Defining the parameters for new sub-fund
 Expected AUM and growth
 Asset Allocation and transaction volume estimation
 Administrative and service level needs and wants
 Offer with all the services defined and price fixed
 Project Confirmation Letter (LOI)
 Timeline
 Definition of sub-fund investment and risk profile
 Drafting of legal documents, CSSF Approval
 Operational set-up
 CUBE account setup
 Operational memorandum, Service Level Agreement
 Launch of the new sub-fund
Page  13
Key personnel
Limestone Platform AS
 Personnel 8 people at the moment, located in Tallinn, branch in Helsinki
 Ownership divided with Northern Star Oy, management, board members
and external long term investors
 UCITS and SIF platforms in Luxembourg hosting 5 sub-funds at the
moment
Paavo Põld, CEO
 Heading the Management Board of LS AS
 Head of Compliance
Miika Peura
Management
Board Member
Timo Rossi
Management
Board Member
Liisi Saar
Matis Tomiste
Head of Risk
Management
Risk Management
Senior Advisor
Board of Directors
Chairman of the Board
Member of the Board
Member of the Board
Olga Olyanishina
Finance Controller
Triin Lindma
Head of Trade
Execution
Markku Malkamäki
Eero Leskinen
Olli-Pekka Kallasvuo
Page  14