Love or hate compliance, for startups like Domos FS, AIFMD created the perfect environment for building a new business in Luxembourg. Domos FS co-founder Benoit Moulin outlines his company’s journey.
Benoit Moulin is one of the “lifers” at the Luxembourg House of Financial Technology. A serial entrepreneur, who worked in PwC’s advisory services, before co-founding fundtech firm Domos FS, the entrepreneur jokes that he has tried every desk in the financial technology incubator.
“As soon as I heard the announcement that LHoFT would open, I was already knocking on their door,” he recalls. By that time, Domos FS had been going for almost four years, leading the charge on solutions to challenges facing fund managers as a result of the Alternative Investment Fund Managers Directive (AIFMD). The framework forced AIFMs to be transparent and authorised in an effort to protect investors and reduce systemic risk.
For Arnaud Vinciguerra, who founded Sophis, a leading financial technology service from the 1980s, this watershed moment for the funds industry was a gift. A year before, he sold his latest business to Misys. Not in any hurry to retire, he took a cue from former clients and colleagues, he launched a new initiative to address the challenges of the AIFM directive.
Alternative Asset Classes
Moulin, who was at the time advising clients on the AIFMD, joined the venture in 2014 after seeing the beta version of its third party software solution aimed at fund managers and investment advisors. The initial idea was to focus on real estate (Domos is Greek for city)
“We decided to extend the data model to other alternative asset classes, so particularly private assets, meaning private equity, venture capital, debt, infrastructure, real estate, of course, and related funds of funds,” recalls Moulin.
After testing the market in 2014, Domos FS signed its first clients in 2015 and in 2019, it began expanding outside of Luxembourg, securing clients in France, Switzerland and, most recently, the UK. Today more than 45 clients across Europe use its three core products: a fundraising and investor relations solution, an AIFM tool, and automated regulatory reporting.
“Our ambition is to be in the top three alternative assets fundtech providers in Europe in the next three years,” says Moulin. This will be no small feat given that the podium is occupied by the likes of American multinational BlackRock (with 8.594 trillion USD assets under management).
To reach this goal, the firm has invested heavily in making its solutions robust, with three quarters of its 40-strong team dedicated to product R&D and management. It also recently formed a strategic partnership with SimCorp, a leading financial software editor, which took a minority stake in Domos FS.
One thing it will not be doing to reach the podium is seeking VC funding. “We had a lot of them knocking on the door but we had the luxury to say no,” says Moulin, adding: “The luxury that I felt we had is we could really focus on developing a great product and developing a great client database.”
The company has mushroomed since 2018 when it was composed of only the four co-founders. By the end of the year, Moulin expects the team, which is scattered across Luxembourg, Paris and London, to reach 50.