Anna Bernasek: I'm Anna Bernasek, head of insights at State Street. And I'm talking today with Terri Dempsey, State Street's head of Ireland, and Riccardo Lamanna, State Street's head of Luxembourg. And we're talking about Cross-Border funds. Terri, Ricardo, welcome.

Terri Dempsey: Thank you. Thank you. Thanks for being here.

Anna Bernasek: Terri, let's jump in with you. Tell us, why do Cross-Border funds matter? And can you give us a high level view of State Street's capabilities in this area? Sure.

Terri Dempsey: So I would say Cross-Border funds matter because of their ability to expand in terms of clients global strategies. So and in terms of the product itself, Cross-Border funds operate whereby they're registered in one country, but they facilitate the distribution to investors across a variety of different countries. So they're enabling diversification. They're enabling liquidity across funds. They're enabling global strategies. And across the Cross-Border full suite of funds. Both Ireland and Lux are hugely dominant. And State Street as a provider supports over a third of all Cross-Border products. So in Ireland that consists of assets serviced in excess of about 1.6 trillion. And in Luxembourg just over 1.3 trillion. So in terms of State Street's role, we're hugely dominant and expert in the field of supporting these kind of products, which are enabling global strategies for our clients.

Anna Bernasek: Terrific. Riccardo, I want to bring you in here. So can you tell us a little bit about the growth path for Cross-Border funds?

Riccardo Lamanna: The growth path for Cross-Border fund is is going to be positive in the last 40 years. Usage. Manufacturing Ireland and Luxembourg has grown at a very high pace, thanks to a mature ecosystem that was developed in years with many different actors, providers, auditors, consultants, management companies and they were able to satisfy the needs of the most sophisticated asset managers, whether they were manufacturing products for mass clients or affluent or high net worth. High net worth individuals. So it's done very well and I think it will continue to do very well. Certainly there are emerging trends like private equities and like technology that could change a little bit. The the trends could alter a little bit the dynamic that we've seen. But for sure offshore funds will and Cross-Border funds obviously will continue to be growing and be an important part of the portfolio of the investors.

Anna Bernasek: Terrific. You mentioned trends. I wanted to get into that, Terri. Could you just give us a sort of a high level view of what the trends are in the Cross-Border fund industry?

Terri Dempsey: Sure. So, as Riccardo kind of alluded to there, I would say a general trend towards increasing use of alternative strategies and exploring private markets adjacent to public market strategies. That's definitely a huge trend we've seen and supported very well from a state perspective. I would say we're also seeing the use of ETF wrapper as a as a construct across clients that perhaps didn't utilize that before, and that's something that we're very well equipped to support in terms of our expertise and our tenure in supporting ETF strategies within Europe. Active ETFs is also a trend that's coming through not quite at the stage, I would say, of the US, but it's certainly something that's coming through from a European standpoint. And then finally, probably an overarching focus on innovation and digitization of the sector as a as a whole, both in terms of the wider ecosystem and how funds will be distributed in the future, how will they be managed and the use of tokenization, for example, within fund structures in terms of creating efficiencies and future proofing? So I think it's an exciting time in terms of the trends and the general kind of, you know, emerging themes that are coming through. But State Street is really well placed to support clients as they navigate those trends using our expertise within these areas.

Anna Bernasek: So let's dig in on how State Street is doing that. So, Riccardo, what solutions does State Street offer to help with those trends?

Riccardo Lamanna: We have a number of solutions that we make available to our clients to follow the emerging trends that we that we see on the market. I would say the number one more important is we are present in both countries. We offer the same type of services. We have a seamless environment, seamless solutions that we give to our clients. We have been capable of taking them through a number of innovative products to satisfy the needs of the countries where the products are being distributed, where there is, you know, a capital return or a payment of coupon or a taxation of specific needs that is given that is required in a given country. We have developed links with all the major actors which are part of the distributions, whether it's a platform or whether it's a direct link to institutional clients or direct link to retail clients whenever is needed. And the platform we interact with are platforms that offer services to mass clients, affluent or high net worth individuals. So we have developed a sort of a number of services that are supporting the growth of the clients. What I would add also, which is very important for us, we are present in many of the of the in the countries where our clients are distributing their products to. So we know the market, we know the culture. We can support the activity of our clients in those countries.

Anna Bernasek: Terri, what makes State Street's offering different from the competition?

Terri Dempsey: I think that what makes State Street's offering different from the competition is that really effective use of our global capabilities, underpinned by the local expertise. So if we think about the global capabilities that Ricardo has alluded to there in terms of common technology, robust, scalable, 24/7 coverage across all of our centres, that's underpinning best in class infrastructure. That is then complemented by our local expertise on the ground that is built up in excess of 30 years. In both jurisdictions where people know how to navigate the regulatory environment. And their partnership with all our stakeholders on the ground, making that navigation for our clients much, much easier. So I think that is the differentiating factor, bringing that global capability with the local nuance that has the the perfect balance.

Anna Bernasek: And Ricardo, I want to pick up on that track record. Can you just give us a high level view of State Street's track record in this area?

Riccardo Lamanna: Our track record is simply great. We've come to Ireland and we've come to Luxembourg on the back of some of our largest clients in the early 90s, starting from basically zero and gaining market leadership in every of the service we provide, whether it's custody, whether it's Depo, whether it's transfer agency, whether it's fund accounting. We've gained phenomenal position and we're very proud of what we've done. At the same time, we need to continue to innovate and we want to do that. We are Introducing. We have helped our clients with a number of innovations and you name it, we've been doing the most complicated stuff, whether we're talking about passive or whether we're talking more in Ireland or whether we're talking about active funds in Luxembourg. You think about, you know, Anti-dilution, you think about swinging prices. We have developed with our clients the most complicated stuff that serve them, their development.

Anna Bernasek: Terri, can you do a I think a difficult thing, which is sum up what we've been talking about today in terms of State Street's capabilities around Cross-Border funds.

Terri Dempsey: I would sum it up in terms of enablement. So enablement of our clients global ambitions and their strategic objectives, taking advantage of our expertise in, in in these jurisdictions, expanding their remit, using expertise on the ground within Luxembourg and Ireland and enabling growth such that investors that our clients are targeting, who are speaking any language, who are dealing in any currency, who wish to use pretty much any distribution channel, we will enable access to those investors. So our ability to enable growth and the future strategies of our clients, I think is really significant. And again, back to the point about leveraging our global capabilities with that overlay of local expertise. I would say on an overall basis, enablement of our client strategy is our key. It's our key differentiating factor.

Anna Bernasek: Ricardo, anything to add on that point?

Riccardo Lamanna: I would say the other part I would like to add on this is our people. They are professional. They know what we're doing. They and what the client needs. They've been on the market for many years, and they are exceptionally enthusiastic about what they do and the way they do it. And they wish they want to help our clients develop their products.

Anna Bernasek: That's State Street's greatest asset, I think. Our people, yes?

Riccardo Lamanna: It is.

Anna Bernasek: So okay, let me ask you guys this as a final question. If you had to give advice to a fund manager about Cross-Border funds, what would that advice be? Terri, let's start with you.

Terri Dempsey: I would say grasp the opportunity. We're here ready to support. It is an untapped market if a manager has not considered it previously. Is it complimentary to strategies that our managers are already running? Take advantage of it. Whether you're an equity fund, whether you're in alternatives, whether you're just exploring at the moment, we're here ready to support. We have the people who are going to navigate this for you, provide a high caliber of service. And I would say take advantage. And we look forward to partnering with more and more clients as our jurisdictions continue to evolve and dominate in this space.

Anna Bernasek: Thank you. Ricardo.

Riccardo Lamanna: I would say our clients should come to us and talk about what they want to do, and they will find someone who is obviously interested in their business, whether they are already a client or whether they are new from new clients, I would say. But they will find someone who is, I would say, neutral in terms of helping them, deciding where to go and where to set up the products. We are enthusiastic about it. We want to help them make it work so they will find good consultancy, someone who can offer solutions everywhere they need and they will find good people.

Anna Bernasek: Terrific. Well, thank you very much both for being here today and having this discussion. It's been very helpful. Thank you.

Riccardo Lamanna: Thank you.

Terri Dempsey: Thank you for having us.