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Thursday, 11th September 2025 |
| New start-up company aims to service the funds industry |
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| Since its establishment in January, 2004, Carne Global Financial Services, an independent fund consulting firm, has been working with leading global asset management and fund servicing companies to help them adapt to the changing regulatory and competitive environment. JOHN DONOHOE provides a profile on the changes taking place in the investment community and how Carne is positioned to help customers meet these new challenges. |
A changing landscape
‘How do we adapt to the new management company requirements of the UCITS III Directive?’ ‘How have my responsibilities changed as independent director under the new regulatory landscape?’ ‘What impact will the European Savings Directive have on our customers’ tax exposure, on the ability of our service agents to fulfil these new reporting requirements, and on our own internal operations?’ ‘Are there ways we can achieve better asset gathering results in Europe under the new EU passport and through open architecture fund distribution opportunities?’ These are just some of the questions which global asset managers, fund administrators and external fund directors are wrestling with in 2005. | | John Donohoe is CEO of Carne Global Financial Services. |
The increasing size and complexity of fund structures and investment policies lead to additional risks and a heavier compliance burden on promoters and boards. This uncertainty is increased further by the speed of European and global regulatory change discussed above. This rapidly changing legal environment could also lead to an increased risk of litigation.
Concurrently, new and innovative mutual fund and pension fund structures are coming on stream. ‘Virtual pooling’ and Common Contractual Funds (CCFs) solutions are two developments which offer efficiencies to investors and asset managers alike. These services would never have existed without the technology which has been developed, adapted and tested over the past few years. Nor would these structures exist today without the proactive legislation put through by countries such as Ireland and Luxembourg, two centres of excellence in European fund administration.
Carne Global Financial Services
Carne Global Financial Services Group is an independent financial and professional services company which was founded to help asset managers, external directors and fund administrators meet these new regulatory and market challenges. Carne was established in January, 2004. The company has offices in Dublin and London. A Luxembourg office will also be opened shortly.
Carne’s mission is to deliver specialised industry and market knowledge, skills and services that clients require. The company stands at the cutting edge of product development including fund structures and investment policies across multiple fund domiciles (CCF, pooling, multi-manager funds, hedge funds, UCITS III etc) as well as current market issues.
Carne has recently published two handbooks to help asset managers, fund service providers, and independent directors manage these new industry challenges. The first handbook, UCITS III – Opportunities and Challenges, provides a comprehensive overview of the UCITS III directive and how funds and management companies must adapt to it. The second publication, The Impact of the European Savings Directive, released in June 2005, relates to the mutual funds industry tax changes, but it also describes the impact on hedge funds and hedge funds of funds. Some of the specific areas where Carne can help industry players and external directors are:
Product development – Carne helps investment managers in developing innovative fund structures such as hedge funds, property funds and virtual pooling. Carne’s team was involved in the launch of the first Irish Common Contractual Fund (CCF).
Fund establishment – Carne project manages the whole establishment process for a new fund and, if applicable, its management company. This work is in conjunction with the fund lawyer and other agents involved in various stages of the process. Areas can include selection of the service providers, management company infrastructure and tax advice.
Project management - Big events in the life of a fund or an investment management group such as organisational restructuring, change in service providers or systems, fund restructuring requires careful planning and management. Carne has extensive experience of managing projects in all these areas. Our consultants can be seconded to a project for either short or longer-term assignments where and when resource challenges arise.
Independent oversight and compliance (including UCITS III substance) – Carne oversees some or all of the management functions of the fund’s and management company’s operations. This program can be tailored to the client’s needs and can be used to meet the substance requirements under the UCITS III management company directive.
Fund health check – Adequate oversight of fund service providers is required given the increased focus on directors and fund sponsors’ responsibilities to shareholders. Carne provides an extensive health check to provide assurance that funds are being serviced according to best practice and adhering to all regulations.
Hedge fund services – Carne offers a comprehensive suite of services to assist hedge fund managers in establishing and managing their funds and fund service agents.
Compliance services - The cost of non-compliance can be substantial in the form of compensation, taxespenalties and reputational risk. Through the Carne Compliance Oversight program we independently monitor the funds’ compliance with all applicable local and foreign laws and regulations. We can also perform a number of other general compliance services e.g. review of anti-money laundering polices and procedures, assistance in development of a customised compliance procedure manual.
Transition of service provider – Changing a fund administrator or custodian is a significant event. Carne provides a project management service for each stage of the transition. It has extensive experience of project managing transitions for traditional and hedge funds and detailed knowledge of the service providers.
Training and development – Carne offers focused training courses covering all aspects of the funds business including compliance.
Tax services – Carne’s services include optimal tax structuring on fund set up and ongoing tax review and assistance. |
John Donohoe is CEO of Carne Global Financial Services.
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