Understanding the cost structure of AMC issuance is essential for asset managers evaluating the commercial viability of their structured product strategies. AMC costs can be broadly categorised into setup costs and ongoing costs.
Setup costs include SPV compartment creation, legal documentation (term sheet, offering memorandum), ISIN allocation, CSD registration (Euroclear/Clearstream/SIX SIS), and initial service provider mandates. These one-time costs vary by jurisdiction.
Ongoing costs include administration fees (NAV calculation, reporting, corporate actions), paying agent fees, custody charges, audit fees, and platform charges. These are typically expressed as a combination of fixed annual fees and basis points on AUM.
Luxembourg issuance generally involves higher setup costs due to the comprehensive legal documentation required under the Securitisation Law, but benefits from competitive ongoing administration costs and a deep service provider ecosystem.
Guernsey PCC issuance offers lower setup costs and faster timelines, with comparable ongoing administration costs. The PCC structure's efficiency makes it particularly attractive for smaller or initial product launches.
Cayman Islands issuance costs are generally between Luxembourg and Guernsey, with the additional benefit of a structurally neutral framework that can simplify the fee waterfall for certain investor structures.
This article is for informational purposes only and is intended for professional investors. It does not constitute legal, tax, financial or investment advice, nor an offer of any security.