Institutional investors can expect a higher level of fund administrative service coupled with a greater cultural understanding from Banque Internationale á Luxembourg (BIL), says the bank who is expanding its fund administration operations and launching offices in Dublin, Singapore and the Cayman Islands to satisfy a new demand from the industry for specialist knowledge in cross-cultural transactions.



The move, says John Pauly, vice president product development, is in recognition of three very distinct requirements today in the fund industry which need individual attention - custody, administration and transfer agents, in particular the latter service in terms of increasing cross-border distribution - an area of particular interest for those institutional investors who wish to invest abroad. And with that comes the need to understand the individual requirements of the investor - something, says Pauly which cannot be effectively managed by a non-specialist.

He cites an example: The German investor is typically one that would send the subscription form today and would wait until you report back to him saying you have received the form, giving him a number on the register, giving him an amount to pay and then he pays. The French investor does it the other way round and would pay today, then get round to sending the subscription form. But if you don't know this difference in attitude, at the end of the day you will have a problem distributing your funds in different jurisdictions."

Some custodians such as Bank of Bermuda Luxembourg still argue that one-stop shopping is the only answer for a smooth and reliable service, and while Pauly is quick to point out that BIL is not completely moving away from this approach and that the bank will still retain its traditional packaged approach for existing clients, he believes separation is the way ahead rather than consolidation.

BIL is already in discussions with banks in Luxembourg who are looking to outsource their administration services. The advent of the 'European pension fund', should it become a reality, will also be a potential key market for the bank. For the time being however, insurance companies and multinationals investing their pension assets in a Dublin or Luxembourg fund are being eyed by BIL as prime game. And if they choose to keep the fund local then BIL says it is prepared to set up locally as well."