AUM Asset Management – why Malta has the potential to be a global asset management player 

1st March 2020

Director and founder Jean-François de Clermont-Tonnerre discusses turning Malta into a global player.

AUM Asset Management Ltd, a privately-owned investment management company since 2010, is focusing its efforts on promoting the island’s unique strengths in terms of value-adding activities among investors, the company’s Director and Founder, Jean-François de Clermont-Tonnerre has said.

In an interview with The Malta Business Observer, the veteran of the asset management industry shed light on his vision for the island, arguing against competing with well-established jurisdictions such as Luxembourg and Ireland, and, instead, promoting Malta on its own merits for a plethora of reasons.

He shared his success in promoting alternative fund opportunities, such as insurance/re-insurance, and investment opportunities in physical asset markets such as shipping. Mr de Clermont-Tonnerre has spent most of his career in the sector in Switzerland, and eventually sold the majority of his Swiss asset management company.

Looking towards the future for his next challenge, Mr de ClermontTonnerre explained how his relationship with Malta was a “happy accident. One day, a lawyer I had been working with spoke to me about an asset management company available for purchase in Malta.

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“My initial idea was to get a foothold into the EU, because Switzerland is not a member. I said, why not, and acquired the company,” he recalled.

At the time, Mr de Clermont-Tonnerre did not know much about the island. But he “fell in love,” he said and “what was supposed to be a foot in the EU, became a full-scope AIFMD-compliant asset management licensed business”.

Mr de Clermont-Tonnerre also recalled the first fund launched on the AUM platform under his leadership, commenting that he chose an asset allocation fund because he was confident such an investment strategy would be successful, more so in light of his extensive experience in managing a diversified portfolio of assets.

“From this experience, I discovered that Malta is an attractive place to live in, with strong resources in terms of the regulator, while support functions, corporate and risk management services are well maintained.

“I also realised Malta was a place where we could really develop something. The company grew, and I am proud that we have a very strong Maltese team.”

Indeed, AUM has grown from a company of two people to a “modest operation” of ten. “I must say that Malta has been growing steadily.

“That’s why we wanted to focus here, and we believe we have a role to play on the island. Many people consider Malta as a small platform. But we have real ambition in Malta, and we are a real Maltese company. We are not relying on added value from outside.”

Mr de Clermont-Tonnerre stressed his reservations in promoting Malta as a favourable tax jurisdiction, arguing that it is impossible to say what the future will hold for taxation law.

He instead highlighted the strengths he believes can carry the island on its own steam. He commented that setting up the business and ongoing operations have “been sometimes challenging” but not that difficult.

“You have an amazing university, talented people and well-equipped service providers. I discovered that step by step and realised that we can build something here that is a purely Maltese asset management company.”

malta

Mr de Clermont-Tonnerre shared his success in promoting alternative fund opportunities, such as insurance/re-insurance, and investment opportunities in physical asset markets such as shipping.

Turning to a broader overview of the industry, Mr de Clermont-Tonnerre argued that Malta, from a historical perspective, has been quite successful.

“It’s where small fund managers come to start, and that is ok. But we still believe Malta can be a global player,” he stressed. He acknowledged that there are bigger players, with Luxembourg and Ireland having been in the asset and fund management industries for years.

“Competition is huge. They are the big fund providers in the EU but we believe Malta can compete and has a very specific role to play.”

Indeed, Malta’s cutting-edge lies in its ability to nurture the smaller players, the Director said. “We have to remember what an asset management company is here for – to bring investors to the best investment ideas.

“The more mature jurisdictions have their rigidities, so it’s hard to penetrate if you are new. Malta is well positioned if you are starting out.” Yet, he added that attracting investors to Malta is the biggest challenge, despite the positives.

“We have good enough infrastructure here. There are, of course, issues but when you look at the overall package, Malta is a good place to do business. Investors are still looking at Malta as a new kid on the block – and they are wrong.” Mr de Clermont-Tonnerre said that his contacts from working in asset management throughout Europe helped convince investors of AUM’s credibility and to get the ball rolling.

“When I started here, I was lucky to have a base of investors that trusted us”. This is not to say there weren’t any challenges, the Director specified. The banking situation is creating barriers for companies setting up in Malta to open a bank account here – a situation which has been extensively covered in the local media.

In this regard, the Director believes that the international banking industry is facing challenging times but is optimistic that the local banks will adapt to the evolving regulatory landscape and operational challenges.

Mr de Clermont-Tonnerre is of the opinion that if new, credible banks set up in Malta, this will enhance the service offering to the local asset management and financial services industry.

Despite this, he listed the reasons why the island is, overall, a favourable jurisdiction, pointing towards the balanced Government budget, “an Anglo-Saxon way of looking at the world”, a stable environment and high levels of education, giving particular praise to the University of Malta.

Mr de Clermont-Tonnerre also said that the low level of unemployment, while bringing challenges, is overall positive.

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He described his experience in hiring local fresh university graduates. “I have to tell you, I hired people in Switzerland, Luxembourg, France and in England, and Maltese students are as good as anybody else. They want to work; they want to progress and grow. Being so motivated is of huge value.” He shared his “personal vision” for Malta and highlighted the futility in trying to attract a European investor into local stocks and bonds. “What is on offer in their jurisdictions is already what they need”.

Instead, Mr de ClermontTonnerre called on a focus on what he called the ‘South/South’ relationship. “Over the last 50 years, most of the money came from Europe to be invested in Europe or elsewhere. I think what we have to sell is the fact that we are part of the EU in terms of stability and regulation, and realise that investors are not only in Europe, but in India, China and Africa.”

He believes Malta should be a bridge to investment opportunities coming from such regions in the world. “This is where I believe we have added value. Africa is growing – it is going to be one of the most populated [continents] in the world.

“So, there are business opportunities there. We are not going to compete for stocks and bonds markets but to position ourselves as an alternative place.”

In his view, investors could be swayed into investing in real assets through a platform in Malta, with the understanding that the situation will be slightly different to what they find in more established jurisdictions.

He highlighted the success in sectors such as shipping, where many funds investing in containers and barges have proved successful.

Moving on to a heartfelt contribution to Maltese society, Mr de Clermont-Tonnerre has been working to set up a scholarship fund, to pay for a local student’s Master’s level in exchange for working with the company.

This, he said, also tied with the necessity for efforts, on a state level, to cultivate an eco-system where the best and brightest are living and working in Malta, and able to fill high level positions.

This interview appeared in the February edition of The Malta Business Observer 


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