Last month, Maples Fund Services restructured and rebranded its fund administration offering, previously known as Maples Finance. The administrator has a base in six jurisdictions, and recently opened an office in New York. While it’s a standalone business, it is part of a larger group that includes the Maples and Calder law practice and Maples Fiduciary Services. Asset Servicing Times spoke to Scott Somerville, CEO of MaplesFS, about the rebrand and the challenges facing the industry.
AST: What was the thinking behind the new brand and how are you looking to position yourselves?
Somerville: The reasoning behind the brand change is that we wanted to reposition our business. In the last two or three years we have grown organically, but recently we have made a number of changes to our technology and corporate infrastructure, as well as changing the executive team. We were born out of the Maples and Calder law firm and we want to grow from there.
Our technology is a global platform, hosted in one location.
AST: You have operations in six jurisdictions, as well as a recently-opened office in New York. Does this give you global coverage and access to all markets?
Somerville: Our offices are there to meet the needs of every client. They are aligned to the types of business in the different jurisdictions, so for example in Dubai there’s more of a focus on private equity. We do see regional nuances and that’s why we have specialists in different locations. We also aim to ‘follow the sun’ so that there is an office available in all the time zones.
AST: What are your targets for the business?
Somerville: We’ve spent a lot of time revamping our technology, to make sure we are a real outsource provider. The regulatory changes we have seen over the past couple of years and will see in the future mean that service operators will have to change going forward. They will have to have the technology alongside the infrastructure if they want to compete on a mid and back office level. And with our technology [supplied by Paladyne] we can also operate in a front office capacity if that’s required by clients.
AST: How have the regulatory changes affected your business and service offering?
Somerville: The new regulations are presenting challenges, but with those challenges come opportunities. We’re very focused on this - our corporate group, which combines the fiduciary business, the fund administration business and the law firm can leverage this.
With the likes of Dodd Frank you have to be very guarded in how you change your business model, but we knew the changes we wanted to implement.
AST: How much competition is there in the market? Are clients expecting you to offer a full suite of middle and back office services?
Somerville: Competition in the industry has become intense. In the past, funds of a smaller size wouldn’t be of interest to many providers who didn’t feel they were big enough to generate enough income. But that has changed.
You do see funds wanting the whole package of services from the same provider, and that is often dealt with through acquisition. Ultimately, one of the testaments to our business is that there is no conflict between doing fund administration, or offering fund administration and custody together.
AST: Have recent events in Ireland affected your plans for the business in that jurisdiction?
Somerville: Ireland will always be successful in many different ways - it’s part of the European time zone and it has the expertise in supporting offshore funds. We’re still watching how it will impact those funds, but we have a large presence in Ireland and it’s far too early to say what will happen.
AST: How has the industry changed in the past two or three years?
Somerville: The industry is in a very interesting position. We’ve seen a difficult few years, with the impact of the global economy on funds.
What is very noticeable is how institutional investors are driving more of the process. There has been an extreme change in the due diligence process is run. There’s a much greater focus on understanding what we can bring to the table. We’ve seen a lot more people doing operational due diligence on us, seeing exactly what we do.
It’s a benefit to us because we’re very focused on risk management. We have both internal and external auditors.
AST: How optimistic are you about the future?
Somerville: We’re starting to see traction in the markets. There are more new funds and more capital is flowing in. The pipeline is certainly more protracted though that’s partly down to attracting capital and partly down to the increased focus on due diligence.
Because there is more competition, there is a greater need to differentiate. The rebrand has allowed us to get traction. We’ve managed to leverage off that and go into markets - ie, for institutional investors with managed accounts, we have built proprietary technology with enhanced functionality.
We are continuing to speak to public plans who have a lot of allocation challenges. There are a lot of issues over unfunded liabilities and their challenge is to generate that income to match those liabilities.
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