If you are developing a genuinely Purposeful venture capital or private equity fund and your expertise is in establishing and operating such a fund, but you don’t yet have the credentials in-house to get the requisite Australian Financial Services Licence then we can and want to help.
Lellco Pty Ltd holds an AFSL dedicated to VC/PE, which we established because we provide services to our own VC funds through Purpose Driven Capital.
Mutual Development Not Hire services
We will only extend AFSL services to projects with a genuinely Purposeful intent and our offer is for mutual development, not just charging fees to use our AFSL.
As such we will strive to work with you to keep all costs to the minimal while striving to achieve maximum compliance standards.
More than AFSL for Hire services
Because Lellco’s AFSL is primarily for use with our VC funds, we are super concerned to ensure that the highest compliance standards exist for all Corporate Authorised Representatives (CARs).
Lellco provides AFSL for hire services to select firms operating in the VC and Private Equity funds management industry.
The firms that we work with are closely monitored and supervised to ensure that their activities fall within the scope of Lellco’s specific AFSL mandate and within their own mandates and compliance and risk management programmes.
ESVCLPs
If you are excited to be seeking, or have recently gained conditional registration as an Early Stage Venture Capital Limited Partnership (ESVCLP), then you have no doubt also spent a lot of money on establishing the infrastructure for your new fund.
By this stage you should already be aware that you will also need to act under an Australian Financial Services Licence (AFSL) for your capital raising process, then the issuing of securities under your ESVCLP, plus the management of that ESVCLP and its associated holding accounts.
Without specific prior financial services and investment management experience it is likely you will not be able to secure your own AFSL, plus the additional cost, time delay and ongoing management may all just be too much risk to load on top of your already exhausting project.
We say this from our own experience because:
- We are the oldest registered venture capital manager in Queensland and one of the oldest in Australia;
- We were one of the first managers to establish both an ESVCLP and VCLP;
- Our management has over 20 years experience in holding AFSLs; and
- We told the ASIC that an AFSL was needed for ESVCLPs, long before they told the industry they were necessary.
Our AFSL is for our own VC funds, so we know first hand all that is needed.
Mutual Support & Accountability
Going back ten years we told the ASIC that an AFSL would be necessary for ESVCLPs. They disagreed, but we pushed the case and had the first AFSL issued specifically for that purpose. Eighteen months later they quietly reinterpreted the law and made AFSLs mandatory for ESVCLP/VCLP promotion and operations.
Perhaps, you could interpret this story as proof that the need for an AFSL is a quirk of the law and was never deliberately incorporated into the legislation.
No matter how you interpret it, an AFSL is now mandatory and therefore is a significant compliance cost and operational burden for most nascent investment managers.
At Lellco and Purpose Driven Capital we want to have the highest compliance standards, but that comes at a high cost of business. To defray that cost of business we want to share the compliance burden and costs with other VC/PE managers. It is Mutual Support, and as a result we offer the lowest cost AFSL services in the industry, but in exchange we require that the key personnel of our clients are listed as Responsible Managers on our AFSL.
Being listed as a Responsible Manager means:
- The Lowest AFSL services costs in the industry;
- Mutual support and accountability;
- Highest compliance quality;
- Your experience adds to you gaining your own AFSL.
Less Than Your Own AFSL Cost
Assumning you can, getting then holding and operating an AFSL with investment management capability is not an inexpensive affair.
The operating and compliance cost does reduce significantly with scale from business revenue, but that first $200,000 per annum of revenue (of the first $10M under management) is the most crucial and expensive to operate.
Because Lellco already provides the services to our own VC funds we are able to gain pricing benefits for our clients. As such, it will cost your fund less to have its authority with Lellco than it would to operate your own AFSL. Furthermore, because your fund has to operate within its Investment Plan as lodged with the regulators, Lellco does not impede your investment decisions and management.
Compliance and Risk Management Services
For investment managers who require assistance with meeting increasingly stringent compliance requirements, we, along with our experienced compliance partners, provide a thorough and cost effective compliance and risk management programme.
Our compliance services include oversight and appropriate monitoring of the programme as well as maintenance of the compliance programme to ensure it is up to date and relevant to our client’s activities at all times.