Werner Humpert, Wolfgang Schmid and Christoph Ludwig (Prime Capital): Building on specialisation in private market strategies
As Private Markets and specifically Private Debt products are booming, Prime AIFM Lux has carved out a specialist role serving managers of innovative and bespoke strategies with an expertise – and partnership with German alternative asset manager Prime Capital – that bigger players struggle to match.
What is Prime Capital’s background in the alternative investment sector and in Luxembourg?
Prime AIFM Lux is a fund management service provider specialising in private markets. A subsidiary of German alternative fund manager Prime Capital AG, it is part of a privately-owned group with around 110 staff in Frankfurt and Luxembourg, a track record of more than 15 years, and currently €4.1bn in assets under management, plus €6.9bn under administration for the AIFM. Established in 2016, the Luxembourg firm manages a range of multi-compartment structures and offers fund solutions to asset managers and their clients. Prime AIFM Lux also manages Luxembourg securitisation entities holding more than €2bn in multi-compartment companies as well as providing tailored securitisation. In recent years we have focused particularly on private debt, including corporate, infrastructure, real estate and aviation lending. We serve European institutional investors in alternatives such as insurance companies and pension funds, especially from German-speaking countries, who draw on our structuring expertise and deep understanding of regulatory, legal and tax requirements. As an AIFM, we also offer additional in-house services including advice, structuring and valuation to third-party managers.
“We offer genuine expertise in private debt, including real estate and infrastructure debt and corporate direct lending.”
How do you view the market outlook for AIFM services?
There are many large AIFMs serving managers that deal with all liquid and illiquid asset classes, but they lack the focus and specialisation required with private market strategies, especially for emerging managers. Meanwhile, the small and medium-sized AIFMs that do claim to specialise in alternative investments in fact mostly focus on private equity and real estate investment, which are asset classes with multiple players and relatively standardised processes. By contrast, Prime AIFM Lux is an independent provider that offers genuine expertise in private debt, including real estate and infrastructure debt and corporate direct lending. This focus is increasingly important given the dynamic development and innovation of the private debt business in terms of strategies and structures. This is a key factor in our rapid development over the past six years, which is enabling us to expand our client base as the market expands.
How have you responded to the market’s evolution?
Over the past few years, we have broadened our offerings in private markets to cover new private debt sub-asset classes, notably including real estate whole loan, senior and junior strategies. In partnership with our German-based parent, for example, we have established a new fund platform for Private Market investments, incorporating a range of sub-funds whose portfolio management is outsourced either to third party managers or to Prime Capital AG. Supporting and co-operating with third-party managers in designing and managing their product has therefore become a well understood process within Prime AIFM. This structure illustrates the separate but complementary services of Prime Capital and of the Luxembourg AIFM, offering third party managers our experience in structuring and investment process solutions for different asset classes. We’ve also created a sustainability team to advise managers on SFDR implementation and requirements, and positioning investment strategies for investors.