“Currently we see a more dynamic phase”

Anne-Cathrine Frogg
Managing Director, Head of Business Development, Mont-Fort Funds AG

 

You not only have Mont Fort in your company’s name, Verbier’s prominent peak, but your headquarters are also in the famous mountain resort. How did this happen?

Mont-Fort Funds was founded in Verbier — and remains headquartered there — simply because that is where our founder is based. What began as a practical decision has proven to be a genuine asset. Verbier also hosts a significant community of alternative investment managers who vacation and own property there, creating natural opportunities for high-quality engagement outside the traditional office environment. We also have a presence in Geneva, allowing for convenience of meetings with our clients and prospects travelling through the region. Combined with our strong network among blue-chip alternative managers and a rigorous service offering, our Verbier base has been a quiet but consistent differentiator in building trust and growing our client base — a positioning that was further validated by BCGE's acquisition of Mont-Fort Funds SA. Backed by an institutional shareholder, our headquarters remain both a point of pride and a reflection of what makes Mont-Fort distinct.

As a subsidiary of Banque Cantonale de Genève you are still acting independently: What is the rationale behind this?

BCGE acquired Mont-Fort Funds almost 2 years ago to broaden their service offering and secure their paying agency business. For Mont-Fort Funds, having an institutional backer with whom we have worked since inception of the company was a logical next step. We also found that with this partner there was a willingness to allow Mont-Fort Funds to operate as previously, understanding the firm’s DNA, displaying great trust in a business that has been running seamlessly for over 11 years with the highest levels of professionalism and efficiency.

How is the alternative investment space developing in Switzerland?

The alternative investment space here is always active as Switzerland has a long history investing in this space. The Swiss market has also adapted to the trends and changes over time, moving from being heavily invested in hedge funds to embracing the advent of private markets. Currently we see a more dynamic phase as hedge funds seem to have an ability to navigate a more uncertain environment and where access to liquidity is of value. I have no doubt that the Swiss market will continue being active in alternatives as we have a broad and sophisticated investor base investing according to varying motivations. Our regulatory framework is also very open for this, not putting any restrictions on what type of funds may market into Switzerland, contrary to what is seen in some EU jurisdictions.

Private Markets is the asset class that many asset managers set their hopes on and that is also supposed to change the investment landscape for retail investors. What developments do you see supporting this?

Mont-Fort Funds’ client base is composed of most private markets managers, so we are well-positioned to observe trends here, and have indeed seen strong growth over our eleven years in operation in this market segment. Since COVID there has been a dominance of funds offered to qualified investors in Switzerland emanating from private markets managers compared to hedge fund managers. A shift in investors has occurred as well, with a targeting of wealthy individuals, largely using evergreen structures. The past few years have seen a wave of such structures coming to the market, from across jurisdictions. I would caveat the targeting of retail investors here, as these products are not destined for pure retail investors but for the private wealth channel, where there is a broader bandwidth to carry the illiquidity risk that comes with these investments. There must be full understanding and a clear educational process when proposing such investments to private investors.

What are your main international general partners and what range of funds do they offer?

Our client base is composed of a large portion of the leading investment managers – we work with most of the top 10. We pride ourselves on this as it is a display of our strong culture of highly efficient client service, professionalism and deep understanding of the market. This is not to say that we do not service smaller and less well-known investment managers as well. At Mont-Fort Funds the focus is to accompany any investment manager that is offering funds to qualified investors. In turn we apply an internal selection process to ensure there is a set-up quality deemed acceptable for us. The range of funds offered to qualified investors in Switzerland is very broad, across structures, domiciles and investment strategies, e.g. private equity, private credit, hedge funds, real estate, commodities, etc.

What services is Mont-Fort Funds catering to them?

Mont-Fort Funds acts as Swiss fund representative, focusing only on funds that are distributing to qualified investors as defined by CISA. We assist in the paying agent set up as well and spend time discussing the distribution strategies of our clients where necessary, provide feedback on the market and act as a general sounding board for them. We may also connect them with prospective investors if we evaluate their interest. Most investment managers will at some point be in contact with a High Net Worth Individual or their family office structure. The need for the appointment of the representative and paying agent will hence be triggered, so we see the activity from a very early stage in the market. There is generalized understanding of this in the main foreign financial centers. As a large majority of our clients are Anglo-Saxon, with a compliance sensitive corporate culture, they will take great care at offering funds in Switzerland within the correct regulatory asset up.

You mention also market intelligence for distribution. Can you specify this?

Mont-Fort Funds’ principals have extensive experience on the front-end of the market as allocators, investors and distributors. This is part of the uniqueness of our firm, and we strive to remain up to date with investor trends, maintain contact with the market, and thereby can provide our clients with this relevant information as part of our service.

Mont-Fort Funds services only funds distributing to institutional and professional investors: Do you have a regional focus?

Mont-Fort Funds’ clients are investment managers that are offering their fund products to Swiss-based investors. The funds will be domiciled typically in Luxembourg, Ireland, Cayman Islands etc. The investment managers we service are regionally distributed approx. 50% in the US, 35% in the UK, and the rest spread across Asia and the rest of Europe. Each investment manager will have their own distribution strategy regarding the investors they target. If they are working with Mont-Fort Funds it means they are active in Switzerland and are most likely also targeting the private wealth channel.

Personally, you have been active in the Swiss asset management industry for three decades. What experiences stand out looking back – and what do you want to achieve?

It’s time to stop counting the years! It was a captivating journey, that I never planned, and I suppose that is the best take-away. I spent 20 years as a hedge fund allocator managing and advising multi-manager funds and portfolios across various institutions. This was fascinating as you would learn about all investment trends, always exposed to the newest companies, technologies, investment strategies and instruments. Wonderful for anyone with a sense of curiosity. It encompassed the challenging decisions made when you are managing someone else’s money, as well as developing an ability to correctly communicate with investors and prospects what was happening, results and outlooks. I then shifted to an entrepreneurial direction, setting up in the fund representation space, newly established under the revised CISA in 2013. This has been a very different road of personal risk taking. Building a business, landing the first clients, strategic thinking, managing risks, managing people all the way through to selling a business has been incredible. So, it is really about the journey more than the destination, to always remain curious and open to new opportunities and most importantly to have been surrounded by exceptional and interesting people.