Despite being a growing reservoir of funds under management, this critically important pool of capital is confronting mounting problems collating and disseminating key data in a timely manner.
The ratings house is pinning its growth strategy on a revamped methodology that increases the emphasis on governance to 25 per cent – a timely move considering APRA’s proposed reforms.
Shake-up for funds management admin
Byram Johnston, the co-founder of MainstreamBPO, has transitioned from chief executive to executive chair of the listed company, in a move which is more important to the funds management admin industry than it seems.
Funds management admin is going through a shake-up. If you listen to Byram, now a veteran in that part of the industry, it’s going through a boom. This is even while funds managers themselves are suffering a lot from fee compression and other dislocations. The admin companies that service them, of which there is just a handful, are doing very nicely though.
After announcing, last week, his move to executive chair, being replaced by long-standing business partner Martin Smith, Johnston said his move allowed for a generational shift within the firm, which currently employed about 170 people in six countries.
Johnston and Smith both worked together at the former Andersen Consulting in Australia and left there to start MainstreamBPO in 2006, just as Anderson was imploding due to the Enron scandal in the US.
Mainstream is appointing a regional CEO in the key market of Asia-Pacific and Europe to manage regional operations and growth alongside the existing CEO for the Americas, Denise DePaolo, Asia-Pacific. Martin Smith is the acting CEO, Asia-Pacific and will be helped by a permanent CEO for this region.
Smith is the largest single shareholder in the company and established its first two international businesses, in Singapore and Hong Kong. In his new role focusing on strategy, Johnston is now going to spend more time overseas handling the group’s expansion, mainly in Europe.
An external candidate for the CEO, Europe, role has been identified. “We will announce the appointment in due course,” Johnston said.
“Further, we have created several new senior positions for existing staff members to support this structure and consolidate reporting lines across our increasingly global business.
At home, Nick Happell will assume the role of CEO for FundBPO, Australia, with all fund administration, unit registry and middle office staff reporting to him.
Justin O’Donnell has been appointed COO alongside his existing CFO responsibilities. The corporate functions of finance, IT & projects, HR, risk & compliance, transitions & global operating model will report to him.
Alicia Gill, an experienced executive at the former van Eyk research firm, will become company secretary, including responsibility for investor relations while retaining her existing marketing responsibilities. She would soon oversee a major rebranding for the group, Johnston said.
Jenny Elhassan has been appointed to the newly created role of head of transitions and global operating model. Nick Bradford will assume the role of head of client services, Australia, to lead relationships with new and existing clients.
And, to replicate the ‘country manager’ model used in the other offices, Amy Lau will assume the role of country manager for Hong Kong.
The only two global fund hubs not currently covered in Mainstream’s universe are Luxembourg and Dublin. Johnston said: “We have been working on that. Watch this space.”
To a certain extent, MainstreamBPO has ridden the globalisation wave of some of its biggest clients, such as Magellan, and the proliferation of product through listed vehicles and the mFund system of the ASX.
To date, most of the international expansion through M&A activity has been for hedge funds, about 60 per cent of which are domiciled in the US. Befitting the firm’s name, the next wave of growth is likely to be more mainstream.
The firm’s only local full-service competitor is White Outsourcing, which was acquired by the Link Group late last year. With Link’s balance sheet, this is likely to become a tougher competitor in the future.
However, there are also several other established companies, such as FundHost, OneVue and Equity Trustees, which offer parts of the service. There are also several others, such as HUB24 and managedaccounts.com.au that have sprung up to cater for the growing area of SMAs.
Administration is a very competitive, but expanding and increasingly global, market.
“I’m not slowing down just yet,” Johnston said. “I’m just making way for the next wave of growth.”
