Allfunds Bank open to relationships

Profile

Allfunds Bank, which is owned equally by Grupo Santander and Italy's Sanpaolo-IMI, is a fully independent business that provides access to 700 mutual funds for institutional clients in six European countries and Latin America.

While the Madrid-based firm has worked with several leading structured product providers in the past, it has always been part of a larger mix of clients, namely retail banks, private banks, life and pensions providers and wrap platforms (financial platforms built to service independent financial advisers). In the UK, however, the company will concentrate on the structured products space.

"The immediate focus will be on establishing relationships with both structured product and offshore bond providers while the proposition is adapted for broader roll-out to the investment market," says its newly appointed UK director, Holly Mackay. "It is a very interesting part of the UK market and I will be developing it aggressively."

Mackay was formerly head of wrap proposition at Abbey, and she is keen to adapt the Allfunds model to the UK. "There is growing demand in the UK for fund-linked structured investments and quality third-party mutual funds," she says. The advent of depolarisation and open architecture has also given the market more potential, with banks and major high-street distributors showing increased demand for quality third-party mutual funds.

Allfunds already has nine institutional clients in the UK, all of which are structured product providers, although Mackay declined to name them. "They (structured product providers) take the hedging position around the funds that are provided through the Allfunds platform," she says. The presence of Luxembourg and Dublin-domiciled funds on the platform also makes it easy for structured product providers to select funds that comply with the undertaking for collective investments in transferable securities (Ucits), giving their structure a pan-European appeal.

Apart from offering a wide selection of funds that can act as interesting underlyings, Allfunds also provides in-house advisory and research services. This consists of a 15-strong team that continuously reviews mutual funds and develops model portfolios to support and qualify the 'best of breed' formula. Mackay claims that no other platform in the UK market – including Funds Network and Cofunds – offers the same level of research and advisory services.

Hedge funds

Going forward, Allfunds plans to build a separate hedge fund platform to allow structured product providers to develop alternative investment-linked structures. "The first step is to offer advisory services on hedge funds," MacKay notes. This means the Allfunds research team, in addition to reporting on mutual funds, will cover the entire hedge fund market and offer clients advice based on their findings.

Its European focus gives Allfunds a unique advantage, Mackay says. With offices based in Madrid, Milan and London, and a client list drawn from Spain, Portugal, Italy, France, UK, Luxembourg and Latin America, Allfunds is well positioned to offer UK providers access to new markets. Giving product providers distribution power in markets they would otherwise find difficult to tap is a strong attraction, she adds.