Letter from Lux: Greg’s move and goals for 2024

In November, Belasko announced the latest group of promotions which included an internal move for Greg McKenzie. Greg, who ran the Guernsey service offerings for the last 3 years, is now Country Head of our Luxembourg office and supporting the growth of our service offerings from central Europe.  

Since making the 390 miles journey from St Peter Port to the centre of Europe, Greg has taken the chance to review his growth ambitions for the jurisdiction, upcoming trends in 2024 and reflection of the journey Belasko has taken in Luxembourg so far.  

The year has continued to surprise many of us. With 2023 aimed at putting covid firmly in the rear view, geopolitical tensions have taken the headline with many expecting more concerns on the horizon following key elections in 2024.  

Whilst 2023 is going down on record as one of the most challenging years to raise private capital, whispers of green shoots are starting to emerge, promising optimism for what 2024 may bring. 

Belasko aims to play a key role in partnering with fund managers to achieve their investment objectives in 2024. Simply put, our client solutions are designed with experienced people utilising smart technology, and stand confident these fundamentals will deliver value and support both established and first time managers achieve their investment objectives.  

Along with the skiing opportunities, I was enticed by Luxembourg after hearing about the team’s client-focused culture and the opportunity to drive growth from the biggest funds market in Europe. Our team put collaboration at the centre of our day-to-day lives and work in an environment where our newest members work shoulder-to-shoulder with business leaders and can have their voices heard.  

I am also pleased to be working closer with Graham Parry-Dew, who has over 30 years’ experience in Luxembourg. Graham has done a fantastic job in growing our European operation to date, including the opening of our new office in Limpertsberg earlier this year. Both Graham and I have a shared enthusiasm and ambition to grow our Luxembourg offering further in 2024.  

If you would like to hear more about Belasko’s service offering from Luxembourg you can contact Greg at: [email protected]  

How is ESG impacting everything, everywhere and everyone

I would imagine that by now, ESG is close to being a better-known acronym than KYC in financial services. This is ultimately because ESG dominates news headlines on a daily basis and as a consequence, buyers of goods and services now differentiating where they allocate capital – seeking out businesses pushing to make a difference.  

This means ESG or sustainable finance is becoming more than just ‘buzzwords’. Capital inflow into ESG-related funds more than doubled in 2021 compared to the previous year and analysts expect ESG AUM to reach c20% of Global AUM or $33.9trn by 2026 ($18.4trn 2021) according to PwC.   

Ross Youngs, Chief Commercial Officer at Belasko, identifies how to navigate the rising waters, the impact on our clients and the business’ proactive approach to lead the way.  

How are our clients impacted? 

Our fund clients are impacted to varying degrees depending on their size and marketing plans. Many share our proactive approach and have, generally speaking, adopted two different routes depending on the level of regulation required. This includes:  

  1. The Sustainable Finance Disclosure Regulation (SFDR).   
  2. The Principles for Responsible Investing (PRI) : – Where SFDR has not been relevant, our clients have chosen voluntary compliance with the PRI. (The PRI is a set of ESG principles developed by investors to have a positive sustainable impact in the global financial system.) 

Unpacking the SFDR 

There are three levels of regulation applicable to funds marketed in Europe under the SFDR:    

Article 9 covers funds that have a sustainable objective /outcome. They have strict requirements on how they achieve their goals. There has been a great deal of focus on this category of fund and as such, the burden of evidential reporting is very high. This has led to c40% or $175bn of article 9 funds reclassifying to article 8.   

Article 8 is for funds that promote positive environment, social and governance characteristics but do not have those as their overarching objectives.   

Meanwhile, article 6 is for funds that do not integrate any kind of sustainability into their investment.  

These three levels of regulation can be considered stepping stones depending on where the business or fund is on its ESG journey.  

How has ESG impacted Belasko?  

The team and I at Belasko recognise that ESG has several positive impacts when successfully incorporated into business strategy. We are not required by regulation to report on sustainability however, we have chosen to partner with Terra Instinct to create a Responsible Business Policy.   

We have dedicated resources to steward the implementation of our policy which requires a group-wide committee, the definition of sustainable metrics relevant to Belasko, measurement and target setting. This resource also includes an annual report for clients and investors on our sustainable journey.    

I envisage that businesses like ours will soon have mandatory reporting on ESG areas in years to come. We deem it essential to be a leader in this area and will continue taking proactive efforts to stay ahead of the curve.  

How can we help you?  

No matter the complexity of compliance with the PRI or SFDR, there are common challenges with which we can assist.   

  1. The first challenge is defining a policy of responsible investment. The policy must consider the fund’s impact on ESG factors and then set appropriate data points with which to measure and track positive impact according to the goals set.   
  2. Data collection sounds easy, but it is not standardised across markets and countries so the sophistication and resource availability of portfolio companies to stream up the data sets can vary considerably. This is a major hurdle for our clients.  
  3. Regulation and investor demand are evolving at pace. Our clients do not usually have internal resources to dedicate to ESG and therefore rely on Belasko to keep them advised as to what’s next and how to remain compliant.  

Belasko has developed an end-to-end solution in partnership with Terra Instinct to power auditable data collection. It is helpful to have a specialist like Terra Instinct to define policy and collect, validate and where data is not available provide reasonable industry estimates. The benefit of having an advisory expert is of critical importance to ensure data quality, meaning it is auditable and reporting to investors (on which decisions are made) is accurate and reliable.   

Doubts?  

It should be clear by now that ESG is not going anywhere and there is a market expectation to consider sustainability in our personal and business lives. We must adopt positive impacting principles going forward.  

If you would like to get ahead of the curve and prepare yourself for the ESG future, get in touch with Ross at [email protected]. 

Belasko expands operation in Luxembourg

Belasko has relocated its Luxembourg office following the business’s expectation-breaking growth.    

Belasko has now moved to a new office space at 43-45 Allée Scheffer which will enable and encourage further development and expansion for the business.  

Ross Youngs, Commercial Director at Belasko, said; ‘The team and I are delighted with the growth we have experienced. It affirms our view that putting clients front and centre, proactively training our teams, investing in great technology and focusing on stability are the key building blocks of our success.’ 

The new premises will reinforce Belasko as an employer of choice and cement Luxembourg as a key jurisdiction for the business.  

Ross continued, ‘We received CSSF approval for our funds business in May 2022 and have quickly outgrown our previous office. We are very excited about working with our customers in Luxembourg and are proud to have secured such great premises for our staff and clients alike.’ 

‘We’re proud that Luxembourg is one of our four chosen jurisdictions. Since opening in Luxembourg in April 2022, the team have achieved fantastic organic growth and we look forward to many more years to come.’  

Belasko launches in Luxembourg

Belasko is delighted to announce the next phase of its international fund servicing growth programme having received approval from the Commission de Surveillance du Secteur Financier (“CSSF”) to become a professional of the financial sector (“PSF”).

 

The new status will enable Belasko to expand its delivery of next generation funds services to  Private Capital funds structures and related corporate vehicles utilizing Luxembourg.  Belasko’s offer leverages the Group’s core strengths supporting Real Estate, Private Equity and Private Debt managers with leading technology and a tailored service.  Belasko Luxembourg is led by Graham Parry-Dew and John Russell, who successfully completed the application process and have recruited a  team of experienced transfer agency specialists, company secretarial professionals and accountants for our existing and growing client base

Speaking about the granting of the licence, Graham Parry-Dew said “this is a key milestone in the growth of Belasko Luxembourg and enables us to continue to support our Group clients with their Luxembourg structures.  We have a built a great team of hard-working individuals with a clear focus on client service, ably supported by our Group technology platform and processes.”

Paul Lawrence, CEO of Belasko, added “Luxembourg is a key strategic focus for us, and this news cements our commitment to be in the right locations for our clients to meet their requirements for a reliable, next generation partner to support them with complex fund and corporate administration.  Graham and John have hand-picked a team that understand the importance of client service delivery and we look forward to building our presence in this key European financial centre”.

The Belasko Group operates across 4 strategic locations servicing over $7bn of assets with approximately 85 staff.

Senior hires to lead entry into Luxembourg

We are very pleased to announce the appointments of Graham Parry-Dew as Managing Director and John Russell as Director of Belasko’s new Luxembourg entity.

Graham has over 30 years of experience within the funds business working for large banks and fund services companies where he has held executive positions providing leadership through complex regulatory change. In recent years he has been heavily involved in AIFMD regulatory and service delivery aspects for leading fund promoters investing in all asset classes commonly held in Alternative Investment Funds.

John has over 12 years of experience in banking and with a leading fund services company. He has led teams delivering the full range of services required for Luxembourg AIFs and their associated structures. John is highly experienced in building robust teams and operating platforms. John will lead the operational teams and be responsible for client service delivery.

Commenting on their appointment, Paul Lawrence, Belasko’s CEO said “Graham and John join us at an opportune time during our development. Luxembourg, as the largest fund domicile outside the US and is a key geography for the future strategy of our business. Over the next few months they will be expanding and reinforcing the team to ensure that Belasko Luxembourg is perfectly positioned to deliver best in class services to the Luxembourg Alternative Investment Funds market”.

 

Graham Parry-Dew

Graham joined Belasko in 2020. He is a British national and has been resident in Luxembourg since 1991.

Graham has over 30 years’ experience in banking and the funds industry, predominantly with funds investing in alternative asset classes, with a major focus on AIFMD regulation, preparation, and subsequent service delivery.
He has worked for respected institutions within this time and in the last ten years has held senior management or authorised manager positions with global banks and specialist fiduciary and fund administration businesses. Graham acts as M.D, – Country Head leading the Belasko Luxembourg operation.”

John Russell

John joined Belasko in January 2021 as a Director in our Luxembourg office and is responsible for central administration operations.

John has over 13 years’ investment fund industry experience in Luxembourg. He previously held the position of Director of Client Services – Private Equity at a leading fund administrator, managing several teams of accountants, corporate lawyers as well as the Investor Services team, providing central administration services to both regulated and unregulated Alternative Investment structures.

In addition to leading operational teams, John also served on the board of a limited number of CSSF regulated vehicles. John previously held the role of supervisor on the alternatives desk of a global bank. John holds a BA (hons) in Public Administration from the University of Limerick, Ireland. John is an avid music fan, and also enjoys mountain biking, cooking, and travelling with his wife and two young daughters.