The first generation of AMCs
The first generation of AMCs – Actively Managed Certificates – were born precisely out of these client needs. They were established as cost-efficient product wrappers that could allow for lower investment amounts. This first generation enabled asset managers to launch new strategies with 5 to 10 million dollars, which has steadily progressed to 1 to 2 million dollars today.
While this first generation of AMCs helped lower the barrier on the amount of capital required to invest, it still did not solve the issue of accessibility. Typically, client assets are invested through various providers across multiple products, which are then subsequently affected by the corresponding restrictions from the issuers.
Admittedly, some financial product issuers are very tech-savvy. They offer technologically advanced platforms where it is easy to trade shares and ETFs. In some instances, they can even accommodate the ability to trade listed options at high frequencies.
However, these issuers might not have the necessary balance sheet to trade certain assets, such as high yield bonds, convertibles or digital assets. Some issuers might also be too small to offer access to more complex and often capital-intensive assets such as hedge funds. In general, most funds and bonds still trade bilaterally and through various counterparties rather than over an exchange. Consequently, these trades are more cumbersome.
The second generation of AMCs and GenTwo’s AMC ecosystem
This is where GenTwo’s second generation AMC ecosystem steps in. It allows even smaller invested amounts than one million dollars, plus portfolio managers can easily form their AMC strategy to include public, private and digital assets. Through this they can achieve even greater levels of diversification within a single security with a Swiss ISIN. This creates access to nearly any asset class for a wide range of investors.
An investor simply plugs in their preferred custodian or broker and GenTwo manages everything else for them. This is the power of having a fully flexible and accessible solution without a balance sheet or provider restrictions, trading constraints or asset class limitations. This is the GenTwo AMC ecosystem.
GenTwo’s broad range of experience
GenTwo has helped launch numerous projects through a number of creative collaborations.
For instance, it has worked with CAT Financial Products and Aquila to create a next generation platform for AMCs. CAT Financial Products is an independent provider of investment solutions and technologies for structured products, while Aquila is a trusted bank used by asset managers.
This platform enables Swiss asset managers to create compliant AMCs with Swiss ISIN codes, which can be used for their own products and services. Swiss asset managers then have the ability to implement their portfolio strategies and innovative ideas with the flexibility and efficiency that these AMCs offer.
Furthermore, the capabilities of GenTwo’s issuance platform extend far beyond traditional assets. In fact, it bridges the gap between the traditional financial industry with the emergence of digital assets.
Another collaborative example is InCore Bank. The bank leverages GenTwo’s business model to allow asset managers and banks to tailor innovative investment products and cryptocurrencies under their own name. InCore reached its goal of offering its clients a comprehensive crypto asset solution for their investment needs by executing through GenTwo’s platform.
Another interesting example is Hamburg-based asset manager Solvium Capital. It utilised GenTwo’s platform to create AMCs that gave its investors the ability to invest in shipping containers. Barry Films, a Hollywood production company, also used GenTwo’s platform to convert their film and TV series projects into easy-to-invest AMCs, while Zug-based venture capital investor Crypto Valley Venture Capital created an AMC to facilitate early-stage investments into Switzerland’s young and promising blockchain industry.
The continuing evolution of AMCs has help remove some barriers to entry. This includes the capital requirements and access limitations that existed before. This has helped create accessible, customisable, cross-asset strategies that you can implement through GenTwo’s AMC ecosystem.