As part of Funds Europe’s annual survey of third-party fund administrators, Neil Coxhead, managing director at Caceis, answered questions on M&A, fund management and operational priorities.
Have you made any acquisition in the past two to three years and what were the drivers?
In 2019, we acquired the Dutch asset servicer KAS Bank to deepen our experience in pension fund services and to increase our market share in the Netherlands. We also formed a service partnership with S3, Santander’s securities services division, to develop our business in Spain and Latin America.
What ramifications have you seen in the wake of the Woodford fund collapse and the role of the fund administrator?There has been a rise in the level of independent oversight along with a need to review the roles and responsibilities of fund governance practitioners. There has also been a specific focus on liquidity monitoring for open-end funds. The FCA’s [Financial Conduct Authority] review of hosted authorised corporate director (ACD) effectiveness and their related solvency may have further impacts when it concludes in June.
Whether through acquisition or organic development, where is the most resource focused at present in the development of your business?
Following the KAS Bank and S3 deals, resources are focused on exploiting operational synergies and rolling out the full Caceis service range to their clients.
In your view, what should be the top one or two operational priorities for fund management firms now, and why?
The current period of business continuity will focus firms’ attention on the practicalities of running operational activities in-house. Once things get back to normal, firms will assess their current models (including any offshoring) to confirm if they proved fit for purpose and then take action accordingly.
Have you seen any notable shifts in appetite for clients launching product in particular domiciles in the past, say, two years and what were the drivers? Also, have you won any new mandates over the past year and where is new business coming from?
Luxembourg is now the clear domicile of choice for UK managers seeking to launch private equity and real estate funds now that the local structures are comparable with what is on offer in the UK. We also note a continued trend in companies launching ETF products and a growing appetite for ETFs from our institutional investor clients (such as pension funds).
Our biggest recent mandate win was Candriam Asset Management in 2019. We expect significant new business to come from the Santander network locations (southern Europe and South America) as our joint financial strength, geographic coverage and product scope strengthen our sales pitch to leading investment companies.
In the context of Brexit, what are you finding to be the biggest challenges to fund clients (whether UK or European) and how are you helping them?
The trend for our UK managers setting up Luxembourg or Irish-domiciled products for EU market distribution continues. Some EU clients are also interested in launching UK-domiciled products for their UK investors. Our UK branch can help such clients launch new products depending on the final passporting rules. The newly announced UK Professional Investor Fund (PIF) also represents a new challenge and we are getting ready to support new client launches.
The directory may be viewed here and the survey here.
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