Northern Trust, a US-based financial holding company, has established the Northern Trust Common Contractual Fund (Northern Trust CCF) as a platform to allow investment managers to offer tax-transparent proprietary investment strategies in a cross-border fund vehicle designed to appeal to large institutional investors.
According to Northern Trust, the Northern Trust CCF is an Irish-domiciled UCITS fund, a vehicle established under the European Union’s ‘Undertaking for Collective Investment in Transferable Securities’ directive.
Within the Northern Trust CCF, investment managers can establish sub-funds with distinct portfolios of assets, investment guidelines, fund features, and investors. Northern Trust will provide global custody, fund administration, investor-level tax services and management company services to the CCF and the underlying sub-funds.
As a vehicle that is recognized as tax-transparent in many investment markets and investor jurisdictions, the Northern Trust CCF may allow certain institutional investors to invest on a tax efficient basis, benefiting from treaty arrangements in place between their home jurisdiction and the country of investment, thereby reducing certain taxes on the sub-fund’s investments when compared to non fiscally-transparent fund structures, said Northern Trust.
The first manager to utilize the platform is Axiom International Investors, of Greenwich, Connecticut, which will launch a sub-fund under a global equity mandate. Axiom also plans to launch the sub-fund for several UK domiciled investors initially and expects to add investors from other markets as well.
The Northern Trust CCF and sub-funds will be supported through Northern Trust’s Global Fund Services unit.
Serge Boccassini, senior vice president for global asset servicing product and strategy at Northern Trust, said: “This platform will help investment managers gain access to the European market through a UCITS fund that also protects the tax status of the underlying institutional investors. Our new fund platform represents another cross-border pooling innovation by Northern Trust and provides an option for fund managers to distribute products to the institutional market on a cross-border basis in a timely and cost efficient manner.”