Kontora, a leading wealth management provider based in Hamburg, offers tailored fund solutions that cater to sophisticated investors. By leveraging its extensive experience and deep expertise in fund management, Kontora provides customised investment structures and strategic support. With its focus on the German market, Kontora addresses common issues faced in other fund domiciles like Luxembourg, offering lower costs, greater transparency, and a simplified regulatory environment. This positions Kontora as a leading choice for those seeking personalised and efficient investment management.
Kontora offers a unique combination of services specifically tailored to the needs of sophisticated investors. A central element of this comprehensive service offering is its fund management company that allows for the creation of tailored fund structures that can be customised with individual investment goals.
Since Kontora initially started as a dedicated multi-family office, it is well-positioned to offer a full-service suite of solutions for high-net-worth individuals, families, and institutional clients. To facilitate investments with the world’s top asset managers, it expanded by founding its own fund management company in 2014. This decision was based on the conviction that the best possible individualised solutions for client’s diverse challenges can only be achieved through a dedicated, regulated entity. Over time, Kontora’s fund management company has steadily grown and continuously expanded its range of offerings. Currently, the team manages eleven specialised AIFs with a gross fund volume of approximately €1 billion. The team possesses deep expertise across various types of funds and is also capable of swiftly implementing fund setups in Germany.
Germany vs. Luxembourg
Compared to other locations such as Luxembourg, Germany offers clear advantages. In particular, the costs for administration, tax, and legal advice are lower and more transparent. Additionally, the Future Financing Act – in force since 1st January 2024 – enhances the competitiveness of German fund offerings by providing VAT exemptions for administrative activities related to Alternative Investment Funds (AIFs). Furthermore, a fund domiciled in Germany presents significantly lower complexity for investors. For example, a binding tax ruling allows for the definitive determination of the tax structure with the tax authorities.
In fact, investors often cite the disadvantages of Luxembourg-domiciled fund solutions such as tax complexity, currency risks, higher costs for administrative and transaction fees, limited transparency, as well as regulatory and tax risks. By focusing on the German market, Kontora provides a more streamlined and transparent approach, benefiting from a well-regulated environment and lower administrative costs, which addresses many of the concerns associated with other fund domiciles.
How Kontora meets client demands
One way of how Kontora’s fund management company tailors funds to meet the specific needs of its clients is the structuring of private equity funds as investments platforms. For example, an asset manager aimed to evolve from investing in individual companies with single investors to creating a diversified portfolio involving multiple investors and various companies. However, investors preferred not to commit to the entire portfolio but rather to decide on each investment individually.
By structuring the fund as an investment platform, Kontora was able to offer significant flexibility. Investors can choose to participate in single target investments or multiple ones, thanks to separately managed accounting areas and capital accounts. This approach allows for a highly customised portfolio construction that aligns with each investor’s preference and requirements.
Boosting efficiency through outsourcing
While Kontora’s fund management team has developed and structured customised funds tailored to the specific needs of its clients for years, this expertise is also offered as an external service to other clients. By leveraging their extensive experience in fund setup and management, the team provides a comprehensive service that helps clients achieve their investment objectives efficiently and effectively. The decision to launch a proprietary fund is a strategic move for many investors, paving the way for larger and more diversified investments. Instead of being deterred by perceived complexity, it is worthwhile to consider implementing an optimised fund structure, as it is often more attainable than anticipated. This primarily applies to asset managers, high-net-worth families, and institutional investors, such as endowments.
Whereas an asset manager in Germany may have the option to establish their own fund management company, partnering with an already established one offers many advantages. For instance, he gains a partner who handles the interfaces with all stakeholders of a fund as well as benefits from his partner’s expertise in regulatory and administrative matters from the start – without needing to build his own resources. This leads to a significant cost advantage since partnering with an external fund management company allows the asset manager to eliminate the need for additional staff and take advantage of potential economies of scale.
Also, in Germany the German Capital Investment Code (KAGB) sets the framework for fund management and comes with a range of requirements. From selecting the appropriate fund model to fulfilling reporting obligations and ensuring compliance and risk management, the regulatory landscape is complex and demands specialised knowledge. Thanks to the support of a reliable partner, an asset manager may benefit from a customised fund structure while fully focusing on their core business at the same time.
Benefits of working with an external fund management company
A fund management company like Kontora takes on a wide range of administrative tasks that are crucial for the smooth operation of a fund. This starts with fund structuring, where it helps the fund initiator design and implement an optimal structure to maximise performance. Fund administration involves managing accounting records and preparing annual and semi-annual reports, as well as other financial statements. Another key aspect is compliance, where the external fund management company ensures adherence to all legal and regulatory requirements. In risk management, it identifies, assesses, and continuously monitors potential risks to safeguard the fund against unexpected losses.
Additionally, the external fund management company produces regular reports for investors and regulatory authorities to ensure transparency. It is also tasked with managing liquidity, which involves monitoring and controlling the fund’s liquidity levels. The fund’s assets are valued on a regular basis to ensure their current worth is always accurately known. Finally, it meets all reporting requirements to regulatory authorities, ensuring the fund remains compliant with all legal obligations.
More than just fund management
What makes Kontora special is the combination of professional fund management with the in-depth expertise of a family office. It not only handles the technical and administrative setup of fund structures but also delivers strategic support to its clients. Whether it’s crafting wealth and investment strategies, identifying optimal investments, or providing guidance on tax and legal issues, the company serves as a full-spectrum partner to its clients.
An external fund management company with a family office background offers an enhanced suite of services that goes beyond the standard offerings of specialised fund service providers. In addition to developing and implementing customised investment strategies for strategic asset allocation, this service includes targeted investment sourcing aligned with the investors’ specific goals. The firm leverages a broad network of experts, including tax advisors and attorneys, to provide comprehensive tax optimisation and legal guidance on fund structure and management. Moreover, it supports due diligence with in-depth analyses of potential investments and delivers advanced reporting, offering detailed insights into all assets, whether held within the fund or outside of it. Ultimately, Kontora demonstrates its ability to make complex financial services accessible through tailored, client-focused solutions for a wide range of clients.
Further information
www.kontora.com
If you are interested in working with Kontora, you may contact the team via [email protected]
