One of the more esoteric effects of war in the Ukraine is the urgent extra work it has created for fund managers and their advisors.
PropertyEU has spoken to several investment firms with global investors as well as outsourcing firms providing fund services.
One, speaking on condition of anonymity, echoed what many have also said privately: 'What I know from our group and many of our peers is that we have had to scrutinise what kind of money we are managing precisely. We have had to ensure we are in no shape or form involved in having a fiduciary (relationship) on behalf of people who are sanctioned.'
Such groups have also ensured they have no direct exposure to investments in Ukraine.
The consensus is that fresh transactions continue to be furthered during investment committees, however there is a greater sense of caution.
Aztec Group, a specialist in alternative asset classes, told PropertyEU it had explained to clients its approach to Russian sanctions.
'Measures have been taken to assess the exposure towards Russian counterparties, as well as which actions have been taken to further strengthen our control framework.'
'Following the Russian invasion of Ukraine of few days ago, Aztec’s exposure to Russian sanctioned counterparties has been looked at in detail (sanctions currently being imposed by countries and organisations such as the USA, UK, EU, OFAC).'
'Aztec’s banking relationships have also been considered and no Russian banks have been detected.'
Such groups say the focus for the moment is on Russian sanctions. However, the expectation is that checks on payments from/to any sanctioned jurisdiction are treated in the same way.
Advisors have moved into analysing the number of Russian investments that make up the portfolio of clients.
Another service provider said it had taken a decision in recent years not to take on any Russian fund sponsors (fund managers). However, it has identified some Russian investors within client funds. The advisor said: 'The managers themselves aren't necessarily at the front of this. It's an industry where there are regulated funds, so typically (it's) offshore jurisdictions that are at the forefront of action against Russian investors.'
'Typically what you see is any distributions to those investors frozen. People aren’t being forced to liquidate positions but it's still early days. Obviously no new investment by Russians would be allowed. Also, some banks have already refused to bank for structures with Russian investors.'
