Why Family Offices Should Rethink Managed Accounts and Consider Actively Managed Certificates (AMCs)

Actively Managed Certificates for Family Offices

Family offices working with external asset managers often prefer managed accounts over commingled fund structures. The appeal is clear: transparency, control and customisation are high priorities for many families. However, while managed accounts address certain issues, they also introduce new challenges including operational burdens, tax complexities and direct market risk exposure.

However, Actively Managed Certificates (AMCs), particularly those structured in Switzerland and other leading jurisdictions, offer a compelling alternative. For family offices unfamiliar with this vehicle, it may be time to reassess how external manager allocations are being structured.

What are Managed Accounts?

A managed account is an investment account owned by an individual or entity, in which a professional asset manager is given limited authority to manage the portfolio according to agreed guidelines. The assets remain legally owned by the investor and the manager acts on a discretionary basis to execute trades on their behalf.

Each managed account is legally and operationally distinct, which provides transparency and direct ownership benefits. However, this structure also results in increased administrative complexity, especially when allocating across multiple jurisdictions. 

Investors may be exposed to a fragmented array of tax filings, regulatory registrations and compliance requirements that must be managed on a per-account basis.

What are Actively Managed Certificates (AMCs)?

An AMC is a structured security that mirrors the performance of a dynamic investment strategy managed by a designated strategy manager. The issuer, often a bank or securitisation platform, issues the certificate and the manager makes investment decisions on a notional or actual portfolio. In simple terms, think of it as a bespoke investment strategy wrapped in a security with an ISIN, held in your custody account and priced daily like a bond.

In practice, the SPV issuing the AMC opens a dedicated brokerage account for the specific cell or strategy, with the assets segregated and clearly identified. The external manager is then granted limited access to this account, sufficient to manage the portfolio within the agreed investment mandate, but without direct control of cash movements. From the manager’s perspective, this setup mirrors the operational experience of managing a traditional managed account, where they can implement trades but cannot withdraw or redirect client funds.

How AMCs Replicate Managed Account Benefits

Family offices often use managed accounts to achieve:

• Transparency: Visibility into individual holdings and trading activity.
• Control: The ability to tailor mandates, apply restrictions, or terminate managers easily.
• Liquidity: Direct ownership of assets, without fund-level gates or lock-ups.

AMCs offers some comparable advantages:

• Transparency: Holdings and trades are tracked and valued daily.
• Control: The investment strategy operates under a pre-set termsheet that can be tailored to the family’s needs. Importantly, the investor retains the ability to easily redeem from the product if the strategy is no longer suitable or if priorities change.
• Liquidity: AMCs are unitised and bankable, meaning they can be easily accessed through standard custody accounts with up to daily liquidity. This structure makes them particularly suitable for family offices, allowing multiple family members to allocate to the same strategy easily.

Where Actively Managed Certificates (AMCs) Go Beyond Managed Accounts

AMCs not only replicate managed account benefits they often go further:

1. Downside Risk Containment

In a managed account, the investor owns the underlying assets directly and is fully exposed to unlimited losses. AMCs, by contrast, provide exposure to the investment strategy without requiring direct ownership of the underlying assets. The investor holds a structured product, not the underlying assets. This ring-fences the exposure and limits the downside to the value of the certificate, with no risk of forced liquidation or negative account balances.

2. Structural Efficiency and Cross-Border Administration

AMCs are issued as debt instruments, which can simplify cross-border administration. Their consolidated structure often results in more streamlined tax reporting and reduced operational overhead. This makes AMCs especially appealing for professional investors looking to allocate across borders without the burden of managing numerous separate accounts.

3. Documented Strategy and Compliance Oversight

Managed accounts often lack formal documentation or compliance monitoring. AMCs come with a defined investment mandate via a pre-set term sheet with embedded language around the strategy and any applicable limitations or restrictions.

4. Operational Scalability

Each managed account requires separate onboarding, custody arrangements and operational workflows for the investor. Actively Managed Certificates (AMCs), in contrast, integrate with existing custody systems and can be accessed via subscription through brokerage accounts.

5. Cost Efficiency

Modern securitisation platforms offer AMCs at competitive pricing. When factoring in the operational overhead of managed accounts, AMCs often prove more cost-effective, especially at scale.

Additional Features for Family Offices

• Bankruptcy-remote structuring: It is important to use a provider that utilises a bankruptcy-remote SPV to issue AMCs. Each strategy or certificate is housed in a segregated compartment or cell within the SPV, ensuring legal separation of assets and liabilities.
• Access to non-bankable assets (e.g. private credit, real estate, or niche strategies) is also possible through securitised wrappers.
• Multi-manager exposure can be delivered via a single AMC, reducing complexity across reporting and custody.

Conclusion

For family offices accustomed to managed accounts, Actively Managed Certificates (AMCs) present a modern and efficient alternative. They preserve the core benefits of transparency, control, and access while introducing enhanced structural protections, simplified administration and the ability to operationally scale. As allocation strategies become more complex, family offices should look to revisit whether maintaining separately managed accounts continues to be the most effective route.

Facing complexity in managing external allocations?

FundFront partners with family offices and wealth platforms to design and launch bespoke AMC structures aligned with your strategic goals. Contact us to explore how Actively Managed Certificates (AMCs) can simplify control, reduce risk and improve your access.

Email hello@fundfront.com or complete the contact form on our website. 

Other articles that may be of interest:

• Cayman Islands Fund Setup Checklist: What Every Family Office Needs to Know
• How Family Offices Can Benefit from Cayman Islands Private Funds
• Why Family Offices Use Cayman SPCs for Asset Protection

Disclaimer

FundFront provides operational and technological solutions for fund structuring, securitisation and management. We do not provide legal, tax or financial advice. We recommend that you consult with professional legal or financial advisors to ensure compliance and appropriateness for your specific situation.