Oiling the wheels of distribution
Much has been written about Luxembourg’s multicultural lawyers and tax consultants, but what about the less glamorous side of the business, the daily grind of reporting the prices and corporate activity of 100 different fund classes to investors and regulators in 30 different countries? Who controls that this is happening correctly? LFF interviewed Bob Kneip, founder and CEO of KNEIP, a company that does a lot of the “painful stuff” for some 370 companies and 11,950 funds worldwide.
KNEIP was set up in 1993 to automate the increasingly complex marketing needs of cross-border fund distributors. From the publication of corporate actions and tombstones the company went on to produce marketing materials, handle fund reporting and the daily publication of fund prices. At that time, share prices had to be physically published in every market where a fund was registered for distribution, involving a daily nightmare of different formats and editorial deadlines.
The company’s recent acquisition of Co-Link provided additional skills in the complex area of delivering reliable and consistent fund documents efficiently. Co-Link had developed technology automating document production for investment funds in any legal context or language, including statutory reports, prospectuses, periodic professional reports, fact sheets, regulatory reports and even, on demand, client reports. KNEIP is integrating the entire Co-Link team.
Today, the company provides a vast range of reporting services for international consumption. “I don’t think you could reproduce this outside Luxembourg” says Kneip, whose international branches are directly linked to the hub in the Grand Duchy.
The company has gained skills through acquisition. Thanks to the purchase of La Côte Bleue and Patrimoine TV in France, it can now deliver content for websites, TV and radio: “clips of fund managers and performance analysts” explains Kneip. The foothold in Paris is significant: France is the oldest retail fund market in continental Europe and French promoters are the most likely, Kneip feels, to consider repatriating business to France post UCITS IV.
But the depth of cross-border expertise offered by KNEIP and other Luxembourg companies is likely to remain unchallenged. It is home grown. “We tried outsourcing to Asia, but checking the data cost us more than we saved… and doing the business in situ means you can react at the last minute to unexpected changes”.
KNEIP provides an example of the collegiate behavior which typifies the Luxembourg financial centre, competition notwithstanding. The company has always sought to push the frontier of automation, producing the prototype of the Fund Processing Passport (an industry initiative that was not adopted by clients) and, more recently, a prototype for the automation of the Key Investor Information Document.
Kneip is optimistic about the future and welcomes UCITS IV which, he feels, will bring about rationalisation and encourage the standardisation of practices and processing. In Kneip’s view, there are a lot of challenges ahead but the cross-border business leaving Luxembourg is not one of them. “It is the natural place to be… I think that Luxembourg will become the European centre for reporting and data management”. ER