Flexibility drives demand for Gateway centres
Managers turn to Gateway centres to access flexible office space and administrative support as they start up or move to new jurisdictions
Three years after the launch of the first Citco Gateway office centre, all four offices – in Amsterdam, Luxembourg, New York and Singapore – are close to 100% occupancy. This shows the value that asset management firms place on flexibility at a time when profitability is under pressure and globalisation is receding. It also reflects a mix of local and international trends.
Brexit drives need for new offices
Luxembourg, for example, is an early beneficiary of Brexit, as London-based asset managers anticipate needing to base certain jobs within the EU while keeping their headquarters in the UK. A number of hedge fund and private equity managers have decided that they need a presence in Luxembourg but are waiting to see the outcome of negotiations before deciding if they need a leasehold office.
In New York, managers’ motivation is somewhat different. Citco’s 350 Park Avenue Gateway centre provides a prime US address without having to take on a long lease and other costs typically associated with an office.
In a cost-conscious era for alternative asset managers, they are increasingly keen to rent flexible office space. Not only are Brexit and other factors forcing them to be present in a larger number of locations worldwide, but also lower fees and rising regulatory costs have made them more careful of their expenses.
More than a hedge fund hotel
While shared office and hedge fund hotel concepts are both increasingly popular, Gateway provides a far more specialist, high-end facility, tailored to alternative asset managers’ needs.
All four Gateway centres leverage Citco’s position as a leading service provider to alternative asset managers to help managers achieve their business objectives. Whether a manager is establishing operations in a new market or seeking integrated fund administration services in its current location, Gateway avoids the commitment of a multi-year lease.
In broad terms, Gateway has three pillars:
- Citco’s administrative support, ranging from fund administration to incorporation and corporate governance services.
- Premium business centres in prime locations, close to central financial districts with IT infrastructure and full office support. There is zero capital investment, with no set-up costs or management fees.
- Human relations and payroll services, including office managers and secretaries.
As most Gateway tenants are alternative asset managers, there is a natural cross-fertilisation of ideas and expertise. There are also official networking opportunities. For example, Gateway centres hold events focusing on topics such as cyber security, due diligence and fund raising.
Ideally, the Gateway tenant arrives as a small alternative manager and takes on more Citco services as it expands, its growth accelerated as it takes advantage of the wide ranging knowledge and contacts Citco has built up over 70 years as a service provider to alternative asset managers.