CIFA SEMINAR PRODUCT DEVELOPMENT, CREATING NEW OPPORTUNITIES. By: Anuschka M. Cova- Martens. January 31, 2014

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1 CIFA SEMINAR PRODUCT DEVELOPMENT, CREATING NEW OPPORTUNITIES January 31, 2014 Investment Funds & Segregated Cell Companies By: Anuschka M. Cova- Martens

2 OVERVIEW Introduction The fund industry Financial crisis Curaçao investment funds Competitive advantage Target market and segmentation Branding

3 FUND INDUSTRY Global fund Industry 2013: 2.4 Trillion USD business Representing over fund entities Investment fund structure: Investment Manager Fund vehicle (registered) Services providers Assets Under Management 3rd Qtr 13 2nd Qtr 13 1st Qtr 13 Hedge Funds * $2003.5B $1946.3B $1865.5B Funds of Funds $468.5B $479.8B $485.5B Fund Domicile

4 HEDGE FUND MANAGER LANDSCAPE

5 FINANCIAL CRISIS 2008 Increased regulation Investor demand for increased transparency Shift to jurisdictions of choice based on asset protection rather than tax considerations More substance to the independent director role Increased investor due diligence Investor demand for the use of service providers Investor demand for improved quality of services providers Pressure on fees

6 CURAÇAO IFS Hedge Fund history (OFC): Curaçao was THE fund jurisdiction and was negatively impacted by two major events: the US treasury announced cancellation of tax treaty with NA the US repealed the Ten Commandments that were requiring investment companies and offshore funds organized under the laws of a jurisdiction other tan the United States ( Offshore Funds ) to perform all or substantial portion of ten specific administrative activities (known as the Ten Commandments ) from offices outside the United States.

7 COMPETITIVE ADVANTAGE Michael Porter is a Harvard graduate and is the leading global authority on competitive strategy; the competitiveness and economic development of nation, states and regions; and the application of competitive principles and strategic approaches to corporations.

8 CURRENT CHALLENGES FOR IFS CURAÇAO Perception of high tax jurisdiction AML/KYC more stringent/higher trash hold Registration requirements Less known commodity Transparency (UK/US) Process not efficient (time and cost efficiency) Feeders are not referring business

9 CURAÇAO COMPETITIVE ADVANTAGES Location - perfectly located as a hub Heritage as Curaçao was the leading financial centers for funds Stable legal and governmental system as part of the Dutch Kingdom Quality of professional staff Multi lingual Attractive location Tier IV datacenter The question is, however, if they are real competitive advantages; strengths that the competition does not have??

10 SEGREGATED PORTFOLIO COMPANY SPC is a one legal entity (with one board of directors) that is divided into separate portfolios but the assets of each portfolio or cell "are segregated for liability purposes. Therefore, the assets of one portfolio should not be available for the debts of another portfolio.

11 CURAÇAO FUNDS INDUSTRY Innovative products that could create competitive advantages: A new specific European Investor fund Change focus to other support functions New laws to drive business Fees analysis New start up vehicle for assets up to 20$M Offer express/fast track (same day) services Maybe tax guarantee up to 20 years for funds New exempt company without the word BV or NV Make everything electronically available Allowing fund incorporation filings in other time zones A standard fund offering document to be used online by IM s to fast track their fund launch

12 TARGET MARKET ANALYSIS AND SEGMENTATION Competitive advantage is established Market analysis- who is your target market Identify market segments (funds, trust, bank) Agree on strategy Implement strategies Monitor implementation Constantly monitor our competitive advantage Suggestion to consider quick wins

13 BRANDING IFS should promote our product : Curaçao as one!! s, blogs, news dissemination Seminars, conferences Memberships International seminars Advertising Always bearing in mind your target market so promotion by the right people to the right people

14 In the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively prevailed -Charles Darwin

15 Thank you