Navigating the evolving landscape of AMCs for South Africans

South Africa boasts a sophisticated banking and investment infrastructure, yet the market for Actively Managed Certificates (AMCs) faces distinct challenges compared to its offshore counterparts. A complex web of regulations, including the Exchange Control Act, the Stock Exchange Act, the Banks Act, and the Commercial Paper Act, the Income Tax Act among others, presents hurdles for the establishment and operation of true AMCs within the country. The absence of consolidation in these laws complicates matters, making it challenging for AMCs to thrive in South Africa.

One significant issue plaguing the AMC landscape is the restrictive regulatory environment, which limits the issuance of AMCs primarily to banks. While international players like European Banks have successfully navigated these challenges, leveraging innovative strategies, compared to local institutions that face barriers due to legislative constraints. Despite recent initiatives by Standard Bank to issue AMCs, the market remains nascent, with limited expansion opportunities.

Moreover, the tax implications associated with AMCs add another layer of complexity. In South Africa, AMCs are classified for tax purposes as either gross income or subject to capital gains tax (CGT). Unlike in Europe, where the tax treatment is more straightforward, South Africa’s tax regime lacks clarity on the clarification, controlled foreign company rules and hybrid tax rules, deterring potential investors. Additionally, the limited scope of underlying assets available for reference within South African AMCs further complicates tax considerations.

The Income Tax Act, particularly Section 9D, introduces further challenges, especially regarding connected foreign company legislation. Investors holding significant stakes in foreign issuers may face taxation as if they were South African companies, further dampening the appeal of AMCs. These regulatory and tax complexities underscore the need for comprehensive reform to foster a conducive environment for AMCs in South Africa or the need to outsource activities to offshore third parties to assist and navigate the AMC complexities.

While the country has the potential to address these challenges over time, it lags behind global trends, necessitating reliance on offshore solutions for the time being. The absence of a robust local solution highlights the urgency for regulatory reforms to unlock the full potential of AMCs in South Africa.

Despite these challenges, AMCs offer potential advantages, particularly in the context of hedge funds and family offices looking to manage long-term wealth. By housing trading strategies within AMCs, investors can mitigate various complexities within managing and administrating strategies, making such strategies more appealing for long-term wealth certation and administrating the strategy within one strategy. 

In conclusion, navigating the evolving landscape of AMCs for South Africans requires a concerted effort to address regulatory and tax hurdles. While offshore solutions may currently hold sway, there’s optimism that with the right reforms, South Africa can create a thriving ecosystem for AMCs by partnering with the right partners, providing investors with innovative alternative investment avenues.

Contact Orpheus Capital today to help you navigate the evolving landscape of AMCs.

Unlocking the Future of Finance with Orpheus Capital

When Private equity goes public

In our pursuit of establishing industry enablement in private capital markets, Orpheus Capital is poised to seize opportunities that may emerge in global markets, thereby creating local opportunities for our partners. The transition of private capital to public markets, be it in the US, Africa, or South Africa, holds promise. While the size and liquidity of these markets may pose challenges for PE listings, we draw lessons from history where listed PE hybrids like Remgro have traded at a significant discount to NAV. To address this, Orpheus Capital offers PE and VC securitisation solutions which promises to be a potential game-changer!

Basel III and Capital markets

Since the publication of the most recent Basel III draft regulation, industry participants in the US financial sector have raised concerns about the potentially far-reaching implications for the formal banking sectors in the US. In short, without wanting to elucidate all the fine print, the eventual outcome as proposed, will see a sharp rise in the Tier 1 Capital adequacy requirements for banks potentially increasing the base cost for banks to hold liquid capital. The consequences are expected to be far-reaching as most participants in the formal financial sector will see a material cost to funding their business activities. As always, there will be winners and losers when the draft regulations are formally enacted as suggested. Big banks will increase the cost of doing business, and smaller marginal banks will be squeezed out of the financial system as they will not be able to compete. This indicates reduced competition among major banks, potentially leading to an increase in bank mergers, reminiscent of the “too big to fail” scenario. Conversely, reduced competition among top players also poses concentration risk, unfavorable for borrowers, who may face a situation of paying up or being shut out.

Another intriguing trend set to reshape global financial markets, influenced by developments in the US, is the strategic shift of major private equity and venture capital market players. These players are now exploring the formal savings market (investors) for more permanent pools of capital. Carlyle Venture Capital Group, with a substantial $380bn AUM, has announced its intention to tap into this more permanent capital through an IPO, as part of a defensive strategy. This follows the successful IPOs by Blackstone and KKR, which raised over $1bn each. A key insight is that the initial COVID-related business slowdown, followed by the steepest rate hike cycle in the US in decades, led to a halt in payouts to Limited Partners, who had to endure poor capital returns. 

Electing to list around 10-15% of Carlyle’s shares on Euronext in Amsterdam implies a market value of approximately €13 billion to €15 billion for the company. This comes shortly after Carlyle raised €26 billion, marking the largest buyout fund ever (CVC Capital Partners Fund IX).

Our second observation is the extended duration of the new funds relative to the traditional 5-7-year periods. Carlyle raised the fund with capital committed for 10-15 years, bringing some permanency to the funding structure. The more permanent pool of “dry powder” will result in less reliance on LP partners for funding should markets enter a period of “difficulty”.

Valuable lessons were learned from the previous market crises, i.e., the dot-com bubble in the 2000s, saw an almost 30% decline in US buy-out activity, and LP capital calls dropped off by c.23%.  During the GFC in 2008, PE funding declined by a staggering 40% and the time to close fund went out to c.18 months versus a historic six months. The last dry spell was during the COVID period when average funding went from $250m (Q4/2019) to $100m for 2Q20.

In PE, timing is everything, and someone once said: “Never waste a good crisis”, this was particularly true during the COVID period when asset values declined to “bargain basement” values as deal multiples shrank to low single digits.

Longer-term investors such as Sovereign Wealth Funds like PE because they want the long-term exposure. This makes strategic sense given the sharp increase in AUM for the latter. SWFs seek less volatility in their PortCo.  In contrast to PE funds, private debt funds or leveraged debt managers are under pressure to return capital faster to avoid overturn.

Long-term capital commitments come at a price and with conditions as LP must reconsider its terms and options which may result in funds being less aligned to LP expectations and objectives.

The jury is out on whether interest rates in the US will come off as forecast a few months ago as US macro drivers remain buoyant for jobs, the labour market, forward rates, and sticky inflation.  LPs remain starved for contributions and new capital commitments from this source are by no means certain.  Unless there is another crisis at hand (read geopolitics) the outlook for PE and their LPs is likely to improve, be it more gradual or less sudden, as current conditions are almost GFC like.

GP’s need to shift PortCos out of their portfolios, which is not easy in the current market, yes industry deal activity is hotting up as larger players take advantage of their balance sheets to acquire the casualties of the last rate cycle; this is particularly evident in the fast-food FMCG and space and technology sectors.

At current rates, term funding remains expensive although NPVs should be more depressed than at the lower end of the interest rate curve. Interest cover ratios are at 2007 lows and for some, debt covenants are close to being breached.

The $1.3 trillion sitting as “dry powder” on buy-out firm balance sheets will provide longevity to the next buy-out cycle. GPs need to guard against overpaying and should always remain mandate-driven.

In our next Industry Insight, we look at Private credit and private debt markets as the new normal.

Orpheus  develops ‘plug-and-play’ securitisation with next-gen AMCs

HedgeNews Africa sits down with Andrew Wolfson and Emile Fourie of Orpheus Capital to talk about the evolving world of personalised securitisation solutions and, in particular, actively managed certificates (AMCs).

Founder and CEO Wolfson has many years of market experience, including 10 years in global trading and structuring, eight years as the head of structured products and alternative investments at Cadiz and more than nine years with the FirstRand Group, involved with idea generation and structuring across Aldermore Bank, FirstRand, FNB, Ashburton, and RMB Global Markets.

Now based in London, he founded Orpheus Capital in 2021. Orpheus provides technical, operational and business consultancy services to companies in the UK, South Africa, the Channel Islands, Israel, Australia, the Middle East, and Switzerland that offer structured investments to retail, wealth and institutional investors.

Managing partner Fourie, a chartered accountant, was previously a senior tax manager at PwC before holding the role of tax risk manager at the FirstRand Group for seven years, where he worked across various sectors within the group, ranging from the global trading desk, asset managers, prime broking, treasury, corporate finance, private equity, merger and acquisitions and cross-border transactions.

Orpheus and its related partners have USD 3.5 billion of assets under service and more than 1,200 investment products issued from over 250 clients. They are engaged with family offices, wealth firms, banks, brokers, structured product providers, asset managers, hedge fund managers, venture capitalists, private equity specialists, and project owners. They continue to expand the possibilities and foster greater inclusivity and innovation.

What led you to launch Orpheus, and what do you do?

AW: For us, it is about the democratisation of securitisation – these days, it is possible for asset owners to access their investors directly without high costs. You can turn any investment idea into a bankable security.

Traditionally, only specialised institutions like banks and large asset managers have had the resources and expertise to issue financial products, especially when the products are based on complex or unconventional assets. The common methods for bringing these products to market, such as setting up a mutual fund or limited partnership, are resource-in-tensive and often require navigating complex regulatory frameworks.

We have become subject matter experts with decades of experience, chiefly in investment banking and asset management. By making assets manageable and bankable, we enable our clients to thrive and democratise the world of financial issuance.

We do have an issuance platform, but in effect, we deal with the hurdles of connecting the investor to the asset owner, whether he be a hedge fund or a mining project or if the investment happens to be investment-grade diamonds or physical gold. We’ll assemble all the various modules and connectors that make it happen.

We facilitate the issuance of AMCs, credit-linked notes and trackers via protected cell companies, turning any investment idea into a bankable solution.

Actively managed certificates (AMCs) are a big part of your product line. What is your thinking there?

AW: Emile and I started to analyse problems we were seeing in the marketplace – people were raising offshore funding and could not connect that to their local projects. There were cases ranging from eco-friendly student villages to renewable projects to agri-tech renewables and impact farming. We found a solid case for using AMCs in private markets, and to provide dynamic structured products that allow active management and a discretionary investment style.

From there, we have assisted people in everything from hedge fund strategies to liquid equity strategies to structured products. We are in the process of helping a fixed-interest hedge fund with its strategy. We have a client who’s doing multi-asset and a portfolio manager involved with private equity and venture capital opportunities. We even have a client who wants a tracker on diamonds with the liquidity of an ETF. It is a great mix of helping people get to their investors.

How is your AMC offering structured?

EF: Switzerland has created the concept for on-exchange private placements with specific rules. We have leveraged European exchange legislation and can issue a ring-fenced note for investors that references the actual physical underlying. This means there is no balance sheet risk, no credit risk on a bank, and no bank in any of the transactions. You do have a broker or paying agent involved, obviously, to clear it via the exchange. Assets are in bankable Swiss securities (Swiss ISIN).

We have introduced a ‘plug-and-play’ securitisation service leveraging next-generation AMCs and the advanced digital platform our partners offer.

AMCs offer remarkable flexibility for tailoring investment strategies. They can be created for various ticket sizes across a wide range of asset classes.

New product lines can launch quickly with a streamlined, cost-effective process. Furthermore, next-generation AMCs are not subject to common restrictions that affect traditional structured product issuers, such as credit risk.

You’ve chosen a third-party approach?

AW: We are an enablement business. Banks and brokers like Goldman Sachs, Morgan Stanley, UBS, and Leonteq, typically sell you their offshore AMCs. Buying their AMCs brings you and your investors into their eco-system. They provide everything – broking, trading, and administration.

The fact that we offer third-party solutions means that we are in discussions with all sorts of service providers – for example, with fund administrators on how to help clients reach various stages of growth. Do they need a fund vehicle, or can they continue with an AMC? Is it a question of scale? Ultimately, any solution should be driven by client needs.

If a client turned around and said ‘thanks very much’ after a one-hour discussion because we helped them understand that a CIS fund is what they needed, then I would also consider that a job well done. Our job is actually to help someone get to the solution. And we are happy to hold a client’s hand through the process.

For us, it is important to have trust in the equation. Many people remember us from our earlier days in the market, which is why we have a lot of clients in South Africa. They come to us with questions, and we help solve problems.

I love the interesting cases we get. Yes, we all want things to be simple and straightforward, but then a hedge fund manager comes to me because he’s got a Cayman fund and a client sitting in Europe who wants to invest in his fund but cannot for various reasons. Suddenly, you put together a tracker on his fund, which bridges the gap as they can buy it through the Swiss exchange and clearing system. You have put a mechanism in place to enable someone to buy something that they otherwise wouldn’t.

Being independent and having the right partners truly allows us to serve product managers best to serve their investors better.

What about governance and regulation?

AW: We deal with people who regard an AMC as an unregulated fund. Well, yes, it is not regulated as a UCITS fund might be, but it is covered by securities regulation.

If you go to the paying agent, in our case regulated by FINMA (the Swiss Financial Market Supervisory Authority), he will not just issue a product unless he is happy with all the disclosures and understandings. If there is any marketing information, they want to make sure that it is all clear. The paying agent is the first person to confirm that the mandate is in order.

Another point pertaining to governance is that most AMCs are issued as private placements, not public offers. That in itself means those who are offering them confirm the viability of the AMC and the suitability to their client needs, carefully considering the risks that may occur. The fiduciary responsibility remains.

What is the benefit of using an AMC for an asset manager – are they more suitable for managers of a certain size?

AW: It works for a smaller South African manager looking to trade an offshore product. If you are going offshore and do not have $50 million, then yes, the answer is you can get going. In our world, we want to help people get going, whether they have $100,000, $1 million, $50 million or more.

With liquid strategies, people can start with assets of $100,000 upwards. Their goals might be that when they get to an AUM of more than $50 million, they might consider whether they need a UCITS fund or other such fund.

In another area, a larger PE/VC fund may be raising capital, but they have a broad range of investors who want to access it.

Even in the institutional world, clients might want to create their own solution with specific exposure instead of having a private equity investment with a 350-page side letter. The termsheet can act similarly to the side letter.

One client said: “I want to invest in African private equity, but I don’t want Francophone Africa and certain other countries.” Now in the world of AMCs, it becomes easy. We create one security, specifically defining that it can invest in various assets, but specifically excluding as required. Now you have your own mandate. Another client comes along, and he wants something slightly different.  This is nothing more than a segregated mandate delivered with a security identifier that can be delivered to any suitable investor with more than $10,000.

We have a client who already provides what we call “mass customised portfolio management” because he has taken individual high-net-worth clients and given each client their own AMCs. The wealth manager for each client can now buy structured products, funds, hedge funds, equities, bonds, and other AMCs being issued. He is the regulated product manager, delivering tax-efficient and cost-effective solutions to serve his clients best. 

How does an AMC differ from a trust?

EF: The other area where we see AMCs being used is as an alternative to trust structures. Trusts have become quite onerous and complicated to run. With an AMC, you can get the same benefits. More than $1 trillion is invested in AMCs, and there’s been a massive shift in Europe from wealthy people to AMCs. Personalised securitisation solutions on any asset you can imagine being available to any investor are already here. It is less expensive and less onerous on the admin side.

How is the AMC landscape evolving in South Africa?

EF: South Africa is quite sophisticated in its banking and investment systems. However, it is difficult for the market to support AMCs as we see them offshore. The regulations and laws, specifically the Exchange Control Act, the Stock Exchange Act, and then on the financial markets side, the Banks Act and the Commercial Paper Act, have not been consolidated. They are all very diverse and look at isolated cases. Then, you add the Collective Investment Schemes Control Act, which further complicates matters.

In our view, what you see in the market is nothing more than debt. You can have an equity-like AMC, but it is with very specific terms and that is problem one.

Another problem is that due to current legislation, only banks can issue something like an AMC. The rest of the world moved on many years ago, and South Africa has not caught up.

Standard Bank has just started issuing a few AMCs. UBS has done it very successfully. They are not South African and have leveraged that to use an inward-listed note. For a local institution to issue a foreign AMC, it needs to leverage its balance sheet.

The legislation is actually against anybody who is South Africa-based and incorporated. AMCs have a limited application at the moment because of that. On the other side of the coin sits the JSE which provides access to private markets. Raising debt, or finance, is limited because the Stock Exchange Act actually does not allow them to issue their own notes. You either list as normal equity shares or preference shares. Debt is limited because of the Commercial Paper Act.

What are the tax implications of AMCs?

EF: Tax and AMCs are also complicated in South Africa. For tax purposes, an AMC is viewed as either gross income or capital gains tax (CGT).

In Europe, they do not have the concept of dividends. So it is either taxable or CGT. It is quite clear to say it is not interest.

Offshore, it is a far simpler debate because the note sits in a company, the note rolls up, and only when you realise the return does it trigger the tax. The SA space is actually limited in what you can reference in the underlying, whereas in the foreign AMCs, it is more open-ended.

The second problem for SA is in the Income Tax Act, Section 90, in terms of connected foreign company legislation. If you hold over 50% of the equity shares, voting rights or control in a foreign issuer, you are taxed as if you are a South African company. So yes, there are many issues that investors need to be aware of.

South Africa has the ability to provide solutions for these issues, but it will take time, and we are lagging behind. Right now, offshore solutions are the answer. We do not have a local solution.

Another interesting tax area is when you regard the issue of hedge funds being taxed on trading in their portfolios. If your strategy is held in an AMC, your portfolio now holds this security that you sell only because you have an outflow. The trading within is not taxed because you are basically tracking an active index, which is your strategy managed with your broker in the same way as you are managing all your mandates. That is another reason why such things become very powerful or useful for South Africans.

Do you plan to offer a domestic AMC in addition to your offshore structures?

AW: In our world, very few people need a rand-denominated JSE-issued AMC. Most AMCs are offshore strategies. Even in the institutional space, for South African banks, many view it as too early for them to have their own AMC solutions, so some would rather tap into us as a third-party provider.

Our business is driven by the needs of our clients and their investors. With that in mind, we have worked extensively with the Cape Town Stock Exchange, A2X, and related partners, to create an instrument in which South Africa becomes the secondary listing – basically, a feeder into offshore issuance. For this to work it has to be fully functional and cost-effective.

HEDGENEWS AFRICA | First Quarter 2024

Orpheus Capital Revolutionizes African Mining Project Finance and Unveils Cutting-Edge Personalized Securitization Solutions

Orpheus Capital, a leading innovator in financial facilitation, is reshaping the landscape of African mining project finance with its groundbreaking and comprehensive approach. Focused on bridging the connection between mining projects in Africa and secured investors, Orpheus Capital excels in leveraging the robust Swiss infrastructure to seamlessly facilitate client investment options.

Seamless Investment Options:

In a market often challenged by the disconnect between mining projects and secured investors, Orpheus Capital stands out by offering a range of investment options. Investors can choose to invest in actively managed certificates, credit-linked loans, or trackers linked to the underlying project, providing unprecedented flexibility.

Unique Solutions and Streamlined Processes:

Orpheus Capital’s solution stands apart with its elegance in enabling investors to enter the financial project seamlessly. The option to invest in a liquid cash portfolio mitigates the cash drag typically associated with project implementation, a crucial advantage for projects with extended timelines or requiring finance costs to be spread over time. Orpheus Capital crafts unique solutions tailored to clients, with a focus on ring-fencing collateral tied to the mining project.

Enablement and Facilitation:

Beyond traditional banking, Orpheus Capital pioneers in enablement and facilitation. The use of Actively Managed Certificates (AMCs) becomes a powerful vehicle, managing portfolios actively. Whether investing in cash for a physical mining project, liquid strategies, private equity, or infrastructure, AMCs allow the holding of non-bankable assets.

Mass-Customized Portfolio Management:

Orpheus Capital introduces mass-customized portfolio management, providing clients with personalized securitization solutions. This evolution extends beyond AMCs to involve multiple issuers, allowing diverse payoff structures. The next generation of Portfolio Management includes segregated mandates with limited exposure to various issuers, providing flexibility and cost control.

Regulatory Compliance and Unrestricted Portfolios:

AMCs, being regulated through paying agents under securities regulation, offer regulatory compliance and result in an unrestricted portfolio. This innovative approach to Asset Management is not just about technology facilitating liquid strategy spaces but about balancing technology with the discretionary skills of Asset Managers to manage costs effectively.

Tax-Advantageous Opportunities:

A key highlight is the tax advantage associated with Actively Managed Certificates (AMCs) issued by foreign entities. The locally applicable taxes on these AMCs currently stand at a rate of 0%. Capital gains tax, contingent upon the Investor’s prolonged intention, may be activated solely upon the disposal of the AMC. Trusts in possession of the AMC can yield favorable outcomes for Investors, given the separate taxation distinct from the trust. South African investors benefit from the mitigation of risk associated with a foreign-issued and controlled AMC, thanks to the South African hybrid tax and Controlled Foreign Company rules.

Personalized Securitization Revolution:

Orpheus Capital invites Asset Administrators to be part of the Personalized Securitization Revolution, allowing them to navigate asset administration without traditional bank credit risks.

Orpheus Capital provides the capability to help clients understand their problems, providing a holistic and forward-thinking approach to African mining project finance.

AMCs: Helping You Navigate Difficult Stages

The ABSA Cape Epic is the most televised mountain bike race in the world and the only eight-day mountain bike stage race classed as hors catégorie by the Union Cycliste Internationale (UCI); this official UCI status makes it a highlight on the professional racer’s calendar. The Absa Cape Epic also attracts aspiring amateur riders wanting to test themselves against the best.

Every edition follows a different route, leading aspiring amateur and professional mountain bikers worldwide through roughly 700 untamed kilometers of unspoiled scenery and up to 17,250 m of climbing. A challenge that requires skill, speed, and tactical sophistication, it is a reminder of the complex tasks that asset managers face in optimally managing client funds.

While professional cyclists fight for the win on a demanding route, where anything can happen, asset managers are on an equally demanding path to achieve the best results for their clients. Actively Managed Certificates (AMCs) are increasingly important in this analogy. They are comparable to the perfectly sophisticated strategies that professional and amateur cyclists use to master the strenuous course. They offer agility, dynamism, and a clear course for successfully implementing their own strategy.


The Epic does not consist of a single race but of several stages, each placing different demands on the riders. Similarly, AMCs enable asset managers to design tailored solutions for each stage. The ability to bundle different asset classes, sectors, and themes into one AMC allows asset managers to create tailored portfolio solutions that meet the various market challenges.

Orpheus Capital enables asset managers to launch their own AMC across all asset classes and markets. Asset managers can implement any strategy, whether equities, bonds, futures, options, structured products, private debt, private equity, venture capital or cryptocurrencies. The individual asset classes can also be combined to provide diversification or hedge against certain market cycles. We discuss all requirements with our customers and select the appropriate issuance program together to avoid unpleasant surprises later. Good preparation is a key element for success.


The ABSA Cape Epic terrain is as varied as it is harsh – dusty and demanding gravel roads, strenuous rocky climbs, thrilling technical descents, refreshing river crossings, and fast forest singletracks. The ability to react quickly to changing conditions is also a key to successful multi-stage MTB races. In asset management, this dynamic is reflected in the rapid adaptation and deployment of strategies to changing market conditions.

In traditional asset management, many portfolios at different custodian banks may have to be coordinated and maintained. The asset manager can use AMCs to adjust all portfolios with a single transaction. This efficiency, comparable to a cycling team’s ability to make quick tactical decisions on the course, is optimised by AMCs. They enable asset managers to react more quickly to new investment opportunities and thus gain a valuable advantage.

When asset managers wish to take advantage of new opportunities in the market, for example, a new quantitative strategy that requires a quick start, the AMC can be launched in a matter of days.


The Cape Epic may be among the most physically gruelling and mentally demanding mountain bike multi-stage races. Still, the path to successful asset management is no less challenging for asset managers. Like the cyclists who have to prove themselves at every stage, asset managers also have to think strategically and adapt to offer their clients optimal returns, accounting for the risks along the way. AMCs are the clear winners in a demanding race. Their strategic flexibility, short time-to-market, and efficient cost structure make them an indispensable tool for success. AMCs offer the opportunity to move forward with agility and purpose – a competitive advantage that meets clients’ needs while winning the race of risk and returns.

Orpheus Capital are here to support you as a team. We can provide an independent assessment to enable you and your investors. We have various issuance programs, custodian banks, and execution providers available to you, which includes using your setup. Private Placement and Public Offer are possible and will be considered when launching. We have solutions to meet your needs and those of your investors to enable you to be successful. We are there for you, in all the difficult stages.

SAIFM Regulatory Summit 2023 Highlights Industry Ideas for Exchange Services Needs

The financial world constantly evolves, and staying ahead of the curve requires insight from industry experts. The SAIFM Regulatory Summit 2023, held on August 23rd, provided a platform for thought leaders to discuss the key issues in the financial sector. Among the highly anticipated panel discussions was “Industry Ideas for Exchange Services Needs,” featuring distinguished professionals. The panel, chaired by Mr. Adam Reeves, a Distribution Specialist at ABSA Bank and SAIFM Board of Governors Chair, delved into various aspects of exchange services, emerging trends, regulatory challenges, and the role of technology in shaping the future.

The Panelists:

1.     Mr. Adam Reeves: With years of experience in the industry, Mr. Reeves brought valuable insights to the discussion. He highlighted several key points during the panel, including the regulatory landscape in South Africa, the structure of exchanges, and the wide array of products available, emphasising the peace of mind provided by exchanges’ rigorous vetting procedures and regulations.

2.     Mr. Emile Fourie: A Director at Orpheus Capital, Mr. Fourie established himself as a leading voice in the industry through his work in portfolio management. His contributions to the panel centred on the challenges posed by overregulation in South Africa, the advantages of the Swiss Exchange, and the evolving landscape of structured products and private equity.

3.     Mr. André Buck: Although his insights were presented via a recorded presentation, Mr. André Buck, the Global Head Sales & Relationship Management at SIX Swiss Exchange AG, provided valuable perspectives on the global exchange landscape.

Key Takeaways:

Adam Reeves’ Main Points:

  • South African regulation currently prohibits Over-the-Counter (OTC) instruments.
  • Exchanges are organised markets where a wide range of tradable securities, commodities, foreign exchange, futures, and options contracts are bought and sold. They comprise an independent marketplace, an independent valuer, and a preset settlement infrastructure.
  • Over 1.5 million products are available on exchanges.
  • Exchanges offer security and assurance through stringent vetting procedures and regulatory oversight.
  • On the Swiss Exchange, investors can collateralise exposure to counterparty issuers for a modest fee of 0.25% per annum.

Emile Fourie’s Main Points:

  • Overregulation is a significant obstacle to exchange services in South Africa.
  • The Swiss Exchange stands out due to its versatility, allowing for various collateral options, including physical property.
  • Structured products are subject to regulation but offer opportunities for creating liquid strategies, reference indexes, and private equity assets.
  • The future of private equity may involve issuing certificates rather than complex structures.
  • The Swiss Exchange demonstrates high sophistication, enabling innovative product offerings.

Additional Insights:

  • South African Actively Managed Certificates (AMCs) differ from their European counterparts. They are categorised as debt or notes and are typically bank-issued. They have limitations and can only invest in assets available on other exchanges.
  • The desire to align South African exchanges with global counterparts’ prompts calls for amendments to the Financial Markets Act. This would enable structured products to be traded on exchanges, increasing market access, transparency, settlement efficiency, collateralisation, and execution.
  • Offshore AMCs can be employed for various purposes, provided their valuation is feasible.

The SAIFM Regulatory Summit 2023 brought together industry experts to explore the evolving landscape of exchange services. Panelists like Adam Reeves, Emile Fourie, and André Buck shared valuable insights, highlighting the need for regulatory adjustments in South Africa to foster innovation and competitiveness. As global financial markets continue to evolve, adapting and staying ahead of the curve remains essential for all stakeholders in the industry.

Orpheus Capital Introduces Next-Generation AMC Solution, Revolutionizing Banking Sector

In the ever-evolving landscape of the banking industry, an exciting opportunity is emerging for financial institutions to broaden their investment horizons through Actively Managed Certificates (AMCs). While the traditional route of establishing an AMC offering can be both time-consuming and financially draining, third-party solutions now present an attractive and cost-effective alternative for banks to provide exceptional services to their clients.

Small and mid-sized banks, in particular, often find themselves constrained when considering the provision of Actively Managed Certificates to their financial intermediary clients. Typically, they may need to collaborate with larger market players to execute their strategies. However, if these banks could manage the entire value chain internally, this would unlock a multitude of benefits, including expanding their brokerage services, increasing fee revenues, and enhancing their custody business.

AMCs, which can be issued through special-purpose entities, offer remarkable flexibility for tailoring investment strategies. This presents an exciting and potentially lucrative prospect for banks aiming to develop their unique AMC offerings. In many cases, clients who purchase these products via third-party platforms may choose to deposit them in accounts held at the bank. This results in an influx of net new money and heightened customer loyalty simultaneously.

One of the standout advantages of AMCs is their high level of modularity. Banks can create them for various ticket sizes, including very small ones, across a wide range of asset classes, even including digital and alternative assets. This versatility enables banks to engage in asset management and servicing with an expanded network of partners, transforming their investment concepts into marketable products that diversify their portfolios.

The Dilemma: Do It Yourself or Collaborate?

To harness these advantages, banks face a pivotal decision: whether to construct their own AMC offerings or partner with an external entity to establish an AMC platform. While constructing an in-house solution has its merits, initiating an AMC platform is a resource-intensive and complex endeavour, often taking months or even years to complete.

Key tasks for banks include updating IT systems, managing AMC rebalancing in their trading portfolios, assessing risks, and developing new applications for AMC asset managers. This typically necessitates the recruitment of a specialized team comprising 20 to 25 individuals, substantial legal fees ranging from one to two million US dollars, and a setup period spanning one to two years. Infrastructure costs further compound the expenses.

For these reasons, many banks venture into the AMC space primarily for substantial investments exceeding 200 million dollars. This leaves untapped a vast universe of smaller yet enticing opportunities that could attract new clients and expand assets under management. In such cases, third-party platforms, like the innovative solution provided by Orpheus in collaboration with partners, offer a swift, cost-efficient entry into this domain, requiring minimal integration efforts.

Next-Generation AMC with Orpheus

“At Orpheus Capital, we introduce a ‘plug-and-play’ securitization service that empowers banks to establish their AMC platforms with significantly reduced costs and effort compared to traditional approaches,” says Andrew Wolfson, CEO and Founder of Orpheus Capital.

Leveraging next-generation AMCs and the advanced digital platform offered by Orpheus’ partners, banks can implement new product lines in a matter of weeks, or even days, as opposed to the customary years. This streamlined process significantly enhances cost-effectiveness. Furthermore, next-generation AMCs are not subject to common restrictions that affect traditional structured product issuers, such as credit risk.

Through Orpheus Capital, banks can seamlessly adopt a white-labeled AMC offering without integration hassles. AMCs are set up as standard clients, allowing asset managers to utilize familiar banking tools. Banks can serve as both custodians and brokers, maintaining critical components of the value chain in-house and thereby fostering stronger customer loyalty. Additionally, as Orpheus Capital clients, they gain access to a suite of other Orpheus Capital solutions, facilitating efficient entry into private market assets as securities with Swiss ISIN, thus expanding their investment horizons.

For more information about Orpheus Capital and its revolutionary AMC solutions, please visit

Media Release: Unlocking Investment Opportunities | The Rise of Actively Managed Certificates (AMCs)

Andrew Wolfson, the Founder and CEO of Orpheus Capital, shares his expertise on Actively Managed Certificates (AMCs), a rapidly growing investment vehicle surpassing the US$1 trillion mark and still rising. Actively Managed Certificates offer professionals great flexibility for tailoring investment strategies. The well-known and widespread fund structures are often neither accessible nor suitable due to various limitations, such as high set-up costs, poor flexibility, and regulatory restrictions. We at Orpheus Capital can attest that an alternative that overcomes these said limitations and has become popular in the last decade is Actively Managed Certificates (AMCs). 

The Scheme

A securitisation transaction represents a limited number of tradable or non-tradable assets transferred by a transferor to the securitisation vehicle. In return, the vehicle issues the corresponding notes (certificates).

The value of the notes results solely from the underlying assets and from the payments and income received (e.g., interest, dividends, rents, charter rates), which the deposited asset owes to the vehicle.  

In summary, this means that securitisation is a transaction in which a securitisation vehicle acquires risks related to specific claims or assets and finances this by issuing securities whose returns are linked to those risks.

New Product Generation Creates More Options

AMCs are in high demand and have already accumulated over US$1 trillion, attracting investors globally, especially in Europe and the Far East.  

Actively managed certificates are no newcomers to the structured products market and have existed for over five years. Exchanges want to expand their horizons and share in the lucrative US$37 trillion Alternative Market. 

They have followed a strong growth trajectory in recent years. The new product generation creates more options for tailoring investment strategies. Through various new platforms, financial institutions can transform virtually any investment idea into bankable securities and create fully compliant, simple, and transparent investment vehicles. Some platforms enable alternative assets to become accessible, manageable, and bankable most efficiently and economically.

Through the streamlined, fast-track process of some of these platforms, alternative assets can qualify, also for registration and be on the Bloomberg screens, and be listed on major exchanges. The securities are structured to be legally compliant and entirely negotiable. They can even be structured free from any bank issuer risk.

Times and innovators are changing banking- and the financial sectors at an increasingly rapid pace. So, it is no wonder that some of these new platforms and their modular solutions focus on turning countless opportunities into financial products.

There are several ways for an asset manager to manage a client’s bankable wealth. Typically, a client assigns a power of attorney to the asset manager, who manages the deposits at the client’s favoured Bank. This approach lets the client see all portfolio positions and movements. However, this structure is not tax efficient and usually costly and inefficient

Moreover, specific securities have a high minimum investment amount and are unavailable to every client with a diversified portfolio. These are the reasons, among others, why many asset managers work with AMC managers who have agreements with these funds and can deliver exposure to all their investors. 

Every AMC is a Tracker Certificate if the portfolio doesn’t change

An AMC can be considered as a tracker certificate which benefits from the movement of an underlying asset and replicates the value of the price movement of an underlying asset 1:1.

The underlying can be, for example, a mutual (Foreign) fund, a share, a bond, a commodity, a currency, or a combination of different underlying. A tracker has neither a cap nor protection, and its risk is identical to the underlying asset(s) it tracks when there is no issuer risk.

The beauty of a tracker is its ability to enable investments that would otherwise not be possible or economically feasible. For example, if you want to track an index, you must buy all its components individually or buy a future on that index. The latter may not be possible because no end exists, and the former may not be possible because of minimum size requirements.

Product benefits

  • Flexibility. Tracker certificates (AMCs) offer an efficient way for investors to benefit from an already-running underlying (fund) performance.
  • Secondary Market. Holders of the certificate are allowed (according to the termsheet of the product) to sell their notes via secondary markets.

Flexible and Easy-to-Set-Up Vehicles

The standard structure of an AMC or a Tracker is an issuer, an administrator who establishes the certificate and continually calculates the strategy’s performance (NAV). The asset manager (strategy manager) provides the issuer with the initial portfolio composition and any future adjustments. The asset manager may combine securities from various asset classes, from liquid to real estate, private equity, and all alternatives.

AMCs and Trackers are no newcomers to the structured products market and have followed a strong growth trajectory in the last few years. In contrast to their fund counterparts, they are set up within a few weeks with low issue costs for the asset manager and offer ongoing cost advantages due to their efficient administration. In addition, the certificates are issued with an ISIN number, making them transferable securities which may be booked at various custodians. 

Asset managers benefit from a high degree of flexibility in designing their investment strategy. The tailor-made certificates could include leveraged real estate and offer regular coupon payments. They might also be hedged against FX risks. 

Individualization Through Feeder Certificates

Even the needs of investors with different risk profiles and preferences can be satisfied using a single AMC. A so-called feeder certificate for each client profile is plugged into the basic AMC while keeping the entire structure cost- and time-efficient. 

The asset manager and advisor implement the primary investment strategy within the AMC. A leveraged feeder certificate can be issued for risk-seeking investors who want to increase their exposure to the underlying investment portfolio. The leverage is embedded in the certificate. It is non-recourse and can either be static or dynamically adjusted to keep exposure to the underlying portfolio constant. 

The structures benefit from countless tailoring options for the underlying investment strategy and will continue to be attractive for professionals and asset managers globally.     

The Road Forward

Banking has changed during the past couple of years entirely, and the landscape of creating innovative financial products has changed even more rapidly. Some of these high-performing securitisation platforms replace traditional processes.

Our experience is an eye-opener and shows an even more innovative future in the making. It explains a new generation of customisable, streamlined, and cost-efficient securities creation tools. Innovators no longer need to develop from scratch. Choosing the best white-labelled platform can generate your securities professionally and at the lowest costs.

Get in touch with Orpheus Capital to structure your investment strategy today.


Known as actively managed certificates, these securities could be the best way for funders and investors to get transparent access, on an exchange, to impact projects.

We would like to propose more modern alternatives to traditional funding. It could have a wider impact if we allow other types of investors with new vehicles to participate. An exciting global trend is for asset owners and project sponsors to explore how impact projects can be financed without the involvement of a bank and private equity firm and how liquidity can be brought into these impact projects. It is achieved by creating a secondary market via exchange listing, unitising access to the underlying projects.

Revolutionizing the Investment Landscape: Orpheus Introduces IVM AI-Powered Structured Product Design and Optimization Plugin

We’re thrilled to announce that Orpheus has taken a significant step forward in our mission to revolutionise the investment landscape. We’ve added the cutting-edge IVM AI-powered structured product design and optimisation plugin to the Orpheus AMC platform.

Our shared vision with IVM AI is to tackle a critical issue in the structured products investment world – the potential $900 billion in missed returns due to the continuous re-trading of sub-optimal structured products without optimising the thematic baskets and products to changing markets. We all believe it’s time to put these missed earnings back into the pockets of investors.

By empowering investors to independently manage their portfolios operationally via actively managed certificates and financially via IVM AI-powered structured product optimisation, we aim to reduce the dependency on large banks.

With every investment, there’s always a more optimal combination of baskets/products. By leveraging the IVM-AI plugin, the clients of the Orpheus platform could boost their coupons by 25% to 70%. Furthermore, they could reduce their bear market principal loss potential from 30-50% to a more manageable 0-16%.

At Orpheus, we’re committed to driving innovation and delivering value to our investors. We’re excited about this new chapter with the IVM AI plugin and look forward to seeing its positive impact on our investors’ portfolios.

DEMO IVM here:

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