Insights on Governance

Data management is on the minds of the entire fund industry from small Asset Managers to larger ones including distribution platforms, analytics agencies, and Independent Directors.

26 October 2021

The increase in the number of regulations and involvement from National Financial Supervisory Authorities, with the goal to bring about a more efficient and standardised approach to finance allowing better control and transparency for end-investors, is an ongoing process whose momentum has picked up in recent years.


With the arrival of ESG, SFDR directives, taxonomy, GDPR, alternative assets, cryptocurrency investments, National Financial Supervisory Authorities are seen as becoming more involved and in the process of developing new regulations to encompass the need for full transparency. The asset management industry finds itself in a position where one cannot afford to stand still. Decisions and actions need to be swiftly taken by industry players in order to satisfy these new ever-evolving requirements and all need to pass by efficient management and use of data. Digitalisation, which has been a driving force in the process, has picked up speed since the start of the pandemic and solutions for data management combined with digitalisation are top-of-mind.

Financial data within the regulatory environment are part of Fundsquare’s DNA. Since the creation of the company under CCLux in 1997 and its eventual transition into Fundsquare in 2013, the wholly owned subsidiary of the Luxembourg Stock Exchange has stayed close to its origins. As regulations evolved, so has Fundsquare to better serve our clients.

It only seemed natural that for the most recent Alfi Global Distribution Conference which took place on the 21 and 22 of September in Luxembourg, Fundsquare organised a Masterclass around the theme of governance in efficient data management.

Governance is something that we all idealise yet, often, is the first element neglected when business and functional needs become too hectic. Governance needs a proper set-up, strong foundation and clear vision. True efficiency without governance is almost contradictory.

As the asset management community scrambles to keep up with the changing times, new regulations and exponential increase in data and systems, Fundsquare wished to take time to better understand and share with the market brilliant insights from four reputable industry leaders.

Sandra Lucente, CEO of APIS Asset Management, Rory Herbert, Head of Registrations at Allianz Global Investors, Jean-François Bay, CEO of Quantalys and Franck Willaime, Certified Independent Director joined Fundsquare’s Vincent Lagrange, Senior Sales & Client Relationship Manager, at the ALFI to openly discuss how their organisations are handling the overwhelming increase in data while keeping an eye on governance and all that this implies.

New on the Agenda

“While data management is not a primary topic that is tackled in most fund boards, it is becoming a hot topic because a of number of regulations, which lead to the creation of new processes requiring large and highly sensitive data. The latest AML regulation in Luxembourg focuses for example not only on Investors’ data but also on the UBOs (Ultimate Beneficial Owners) of the Asset held in the fund portfolio!”
Explains Franck A. Willaime, Certified Independent Director.

Given the wave of new regulations and the increased rationalisation of funds with the goal of preserving a proper TER, according to Rory and Sandra, boards have started to lean into more ample discussions around data management. With impact investing and sustainable thematic impact investing as top of mind, Jean-François reminded the panel that net inflows for the 1st semester accounted for more than 300 billion USD in UCITS funds, whereby 2/3 were from ESG funds. In his view, “this is truly a new game changer for the industry and, due in large part to thematic-based funds, is currently forcing thematic managers to discover new approaches to data management. There are 150 new climate funds in Europe bringing new topics and demand from channels so portfolio managers must be aligned to fulfil the requests, and data quality is becoming a hot topic,” asserts Jean-François Bay.

ESG and new Regulations

Standing behind new regulation, European regulators and notably, the CSSF in Luxembourg, are changing also, taking on a more active role. Asset managers, such as Sandra Lucente and Rory Herbert find that it is becoming increasingly common to be asked to confirm that data requirements are being met.

According to Sandra, a lot of funds are moving towards ESG, and, as all funds need to choose between articles 6, 8 and 9, there are new categories to consider. For a small asset manager such as APIS, this represents a challenge because, as one chooses between article 8 and 9, adapting to fit within the specific category comes at a cost. One must have appropriate tools to handle data and report to clients and regulators. Evaluating if there are enough resources to make the necessary changes is essential.”

Rory added that “just as smaller asset managers with less resources are challenged, so are the bigger ones with more resources… just in different way. The SFDR directive required significant rewriting of documents, updating of databases, and has generated a large volume of work to become compliant – but that does not stop there. On top of this, taxonomy will arrive towards ends of year (2021) which will require more data management; EMT templates for example, KIIDs prospectuses and then asset managers will need to develop platforms to use such new materials.” For Rory, combining the launch of new products on top of this constantly evolving regulatory landscape indicates a never-ending cycle and need for efficient data management.

Information and data management toward the regulators is not the only concern for asset managers. Rory specifically mentioned that for Allianz Global Investors (AGI), he has witnessed a strong increase in significant data requests and requirements, whether needed for dissemination to investors or making changes to templates as part of his daily routine.

An example he provided was regarding the cross-border directive and the liquidation of share classes. AGI is currently liquidating a fair amount of share classes and required to submit approximately 651 letters to the CSSF for respective countries in a digital format using a secure channel. The requirements around the cross-border directive are therefore not just externally to provide information to clients but also internally to support the regulator which means an additional workload. “Regulations are not just felt externally but internally as well,” stated Rory Herbert.

Adherence and compliance with these new demands are supported by data management. Data management is needed from the start to be able to establish content, indicate performances and communicate overall with not just the Regulators but also the end-investors.

“The Cross-border directive has incited increase interest on the regulator’s part on how marketing is being done, according to Sandra Lucente. Homogenisation of marketing for investors seems to be an important element that will allow for increased transparency and oversight on the part of Regulators while allowing investors easier interpretation of documents.

Rory highlights the need for resources and capacities to deliver the data on time, whether it is for an institutional or retail investor. “The industry overall needs support as it is a work in progress and most players are still evaluating how to capture this data. The quality and presentation of this data is key as investors need to be able to understand to invest. The challenge is to identify that information that will allow them to better make that choice.”


“With the leitmotiv of the current landscape as being more and more,” according to Jean-François Bay, the need to manage the overwhelming volumes of data forces asset managers to re-evaluate resources, tools, proper oversight of operations and even products.

Jean-François indicated that “digitalisation is key for the ecosystem whether it includes Asset Managers, back-office or distribution channels and processes. These channels need to be digitalised and Covid has accelerated this. Along with the digitalisation of the respective channels comes the need to structure the products according to demand or else we risk missing out on something.”

For Rory there is a slight challenge in the volume of significant data and information as compared to levels of automation. One must make sure that the investor has access at the touch of a button from a platform or website and to set this up, automation is key. Making sure that one’s funds are represented across a varied number of distribution platforms and readily available for the investors highlights the need for very well managed and efficient data.

Keeping in mind the TER

For independent directors like Franck, he maintains that at the board level, investors are at the heart of preoccupations. He specified that one of the key indicators that Board Directors monitor is the TER (Total Expense Ratio), which measures the total costs incurred in managing and operating the investment fund relative to its assets. The TER provides a good measure of operational efficiency to the board and is also an important piece of data for the investors, as the costs of managing the investment fund naturally affect the investors’ return.

Franck observes that “smaller product managers are currently rationalising their range of funds as some share classes and some sub funds become too costly to run.” 

In his opinion, larger asset managers still need to maintain more extensive fund ranges because they need to offer a vast product universe to their wide range of investors.

Eventually, he concludes that for all fund types, the importance of TER, looking for efficiencies and adapting the products to their target markets are still very much the keys to a successful fund product range.

Likewise, there is a tendency to “clean up” the range of funds. Jean-François provides ETFs as an example. In the past few years, companies are “cleaning up” and reorganising ETFs with an ESG edge.

Taking on the Challenge

First mover advantage is key. For Sandra, opportunities and revenues are at stake. As a lot of investors are continually investing more and more in ESG, she observes that those who can readily adapt to new regulations with active offerings, promoting and handling efficient data sets have the first-mover advantage which is quite significant.

Jean-François from Quantalys highlighted that market trends are showing strong competition from the US players and ESG is the weapon of choice. For him, “the data is a key point to take the lead in this battle and the capacity to provide analytics and access to distribution channels.”

European players for Jean-François, need to be vigilant. They were the first movers, had that advantage, but US players are catching up fast as per ESG net inflows worldwide.

To handle these challenges, asset managers like APIS and AGI are investing in tools. It is clear to Sandra that to be best in class or part of that top-level Asset Management group, one really needs to acquire the best and properly adapted tools to be able to provide the best services. This is even more vital for smaller asset managers as the new regulations are generating a lot more data and more requests for data; distributors are expecting the reports. Without appropriate tools, Sandra admits that it is very difficult to get the job done while at the same time keeping in mind the TER.

For Franck, “the implementation of a Data Management Governance framework highly depends on the size and resources the company has.” In his opinion, he believes “We are lucky to be in Luxembourg as the industry has been built around outsourcing solutions. Small players that do not have the capacity to implement a sophisticated Data Management / Data Warehouse type strategy can rely on third party professional such as 3rd party Manco (Management Companies), which can provide the traditional Risk and Compliance services but more and more also middle-office and Data Management services.”

It’s all about survival of the fittest. For Jean-François, we are living a Darwinian period. The market is in consolidation. He insists that we can accomplish the same with regards to distribution channels and asset management companies. For this, agility and flexibility are key winning characteristics combined with efficient data management and governance.

Data, its quality, and its quantity is an ever-evolving topic in the asset management and distribution industry. A fund will be selected by investors thanks to the right data at the right time presented to the right people. Whilst no data implies no investments, erroneous, missing, or untimely data leads to compliance issues and penalties. Boards of management companies and funds bear the ultimate responsibility of the data flows, including KYC and UBO. As the industry moves ahead, the players with the best tools and processes to generate, manage, distribute, control, and oversee processes around data management, will be those who gain in competitive advantage and maintain the test of time.

In Franck’s words, the right strategy, which includes communicating data in a meaningful and simple way to clients will convert them into long term loyal investors.”


Sandra Lucente graduated in Law, started her career at JP Morgan in Luxembourg, first as a Transfer Agent before joining the Compliance department for almost 10 years. Sandra then joined the Wealth Manager Petercam, where she also participated in the constitution of the Management Company as Conducting Officer. Following the merger with the Degroof Group, Sandra joined Degroof Petercam Asset Services in 2016. Sandra joined APIS Asset Management in 2019 and took the lead of this growing AIFM and Management Company in 2021.

Franck A. Willaime is an INSEAD & ILA Certified Independent Director, appointed on various boards of regulated asset managers, investment funds and technology companies. He has had an exposure to the financial markets for over 20 years with a specific focus on Governance, Risk Management and Compliance processes.
He started his career working for a French Bank on the floor of the Paris derivatives exchange and then for an American investment bank, as a stockbroker on Wall Street. He subsequently designed and implemented growth strategies for several award-winning Trading, Risk Management and Compliance solutions providers, successfully sold to billion-dollar firms (latest one being Cadis EDM successfully sold to Markit)

Rory Herbert is an investment professional with over 18 years of experience, currently serving as Head of Fund Registration in the Technology, Operations and Products function at Allianz Global Investors in Luxembourg. His areas of experience include cross border registrations of UCITS/AIF funds and related distribution matters, UCITS KIID’s, MIFID and PRIIP topics and linked data dissemination activities.

Jean-François Bay is Managing Director of Quantalys, a leading provider of fund data, digital solutions, ratings and research, in charge of international operations. Jean-François Bay was Director of Strategy, Development and International Operations of La Financière de l'Echiquier, member of the Board. He also served for seven years as CEO of the French entity of Morningstar Inc, a leading provider of investment research and fund information, having successfully created several companies and platforms specializing in investment advisory on fund selection, companies acquired by Morningstar in 2010. Jean-François Bay is Administrator of F2iC. He is also founder and honorary member of the French institutional investor association.

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