One of the fund administration industry’s fastest growing providers is looking to establish itself in a much broader financial services role following a swathe of strategic acquisitions.
Apex Group has announced four new deals throughout the first quarter of the year, with a strong focus on expanding its private equity and mutual fund administration businesses.
The group is also expanding its services across the businesses of custody, depositary and management company (ManCo) services in a bid to become a one-stop securities services shop across multiple regions.
“We’re looking at creating a new Apex,” said David Rhydderch, head of regulated product, Apex Fund Services (Group). “We have individual pieces but across Apex’s financial services we are offering custody, middle-office, banking, depositary and corporate services. People are looking at outsourcing more than they ever have before, and they are looking for simple one-stop solutions; they don’t want 15 providers, they want simplicity.”
Apex Group acquired the Corporate and Private Client Services (CPCS) and the Throgmorton businesses from Link Asset Services in January, while eyeing private equity administration growth through Ipes, Broadscope and Deutsche Bank’s fund services business. MM Warburg brought banking, depository, and custody capabilities, while Apex also acquired the mutual fund administration expertise of Atlantic Fund Services in March.
Another area Apex has entered is the ManCos investment services business in Luxembourg, through the takeover of LRI Group. With a growing trend in outsourcing, Frank Alexander de Boer, managing director at LRI Group, told Global Custodian that the business is ripe for continued growth both within the country and internationally following its acquisition by Apex. “There are a lot of providers who have a strict way of doing things where they don’t listen to their clients, whereas we work more like a partnership,” he said. “Our ManCo clients have ranging needs from money markets, stocks and bonds, to more complex products such as derivatives, private equity and private debt.”
LRI Group will maintain its 30-year old brand under the new deal with Apex as it provides a new vertical for the business in the growing and ever-changing space.
Brexit is set to shake up the ManCo space with UK-based UCITS ManCos not being allowed to manage a UCITS or take advantage of the European Union management passport without a new deal being reached before the UK departs.
Under EU rules, each UCITS must appoint an EEA-domiciled ManCo which has overall responsibility for functions such as discretionary investment management, fund administration and distribution. The same challenges apply for Alternative Investment Fund Managers (AIFM).
This has led to the rise of dual-authorised Super ManCos, which can support both types of funds, of which LRI Group was one of the first of in Luxembourg, as its holds both an AIFM and UCITS license.
Through M&A along with healthy organic growth, Apex has taken its total assets under administration (AuA) to $650 billion globally. Its geographic expansion is now seeing its name become more synonymous with servicing capabilities in Europe.
Apex joins Citco as the only non-bank provider within the top five administrators globally by AuA, and its ambitions place it at the very early stages of emulating the likes of State Street, Northern Trust and BNY Mellon with its broad range of services.
Apex’s chief executive officer Peter Hughes established the company back in 2003 and grew the company somewhat quietly in the background during its first years of existence, as the likes of the aforementioned custody giants snapped up companies in an active period of consolidation between 2007 and 2012.