Minister for Jobs, Enterprise and Innovation, Richard Bruton on Tuesday announced that independent fund administrator Butterfield Fulcrum is to expand its operation in Dublin with the creation of 150 new jobs.
The latest development contrasts with the effect of the global economic slowdown on Ireland and the pressure on providers to reduce costs. Citco and Northern Trust have cut their numbers in Ireland in the last year.
Butterfield Fulcrum will create new positions in the areas of middle office and customer relationship management. The company established in Ireland in 2009 and since then has reached its 100-employee target with projected employment growth now set to reach 250 with this latest announcement. The Irish Government through IDA Ireland, the countrys development agency, has worked with the company to secure this investment.
Making the announcement, Minister Bruton said: International financial services is a key sector targeted in the Governments plan for jobs and growth, and in the past 18 months we have implemented a number of changes to support expansion and job-creation in this sector. Over recent months we have seen some positive announcements in this field, and todays announcement this leading international company is creating an additional 150 jobs in Dublin is very welcome. This is testament not only to the business environment for international financial services, which we have created but also to the excellent skills that are available here. The Government will continue to work hard, through the Action Plan for Jobs, on implementing the necessary changes to ensure that we can see further announcements like this in the near future.
Commenting on the announcement, Glenn Henderson, CEO of Butterfield Fulcrum said: Butterfield Fulcrum has had a very positive experience in Dublin. Our experience with the Irish labor market has been phenomenal. Our clients have been very impressed with the caliber of those we have hired in Ireland. Today’s expansion is as a result of this success.”
Welcoming the announcement, Barry OLeary, CEO of IDA Ireland said: The expansion of Butterfield Fulcrum in Dublin adds to the established reputation of Ireland as a global center for fund administration and will enhance Irelands profile within the hedge fund industry globally. The success and accelerated growth of the companys Irish operations demonstrates Irelands ability to host international financial services companies and provide the highly skilled employees they require for rapid growth.
In an interview with Global Custodian, Blair Henderson, managing director, Marketing for Butterfield Fulcrum said the company thinks favorably on Dublin for its hard-working and highly skilled workforce. “The city has had a hard time through the financial crisis in the last few years and there are people available as a result. The universities are also adept to delivering new recruits of specific designations.
“The telecommunications infrastructure is also real- time and there are is a spider web of different telecommunications options. The other advantage is the time zone difference – Dublin is five hours ahead of New York, which means it can work to the end-of-day accounting cycles in New York. Dublin is a five-hour jump ahead and as a result it can deliver the work to our New York hedge fund clients at T+1 by 8am the following morning so we are fortunate with the geography. Dublin is a strategic issue for us – we seem to get a positive reaction from our clients. It creates a first class impression in terms of quality and location and is better placed over other jurisdictions that have legislative and workforce issues to deal with.”
Butterfield Fulcrum’s Dublin operation has grown rapidly in 2012. The company had 29 people in January and the number has increased to over 100 currently. “We will push forward to over 150 over the next two to three years, but there is no reason why we cant achieve that in the next 12 months,” said Henderson.
Butterfield Fulcrum is also expanding in New York, Ontario and in Halifax, Nova Scotia, where it has a fund processing center. “We will invest in IT and processes and will continue to grow.”
Noting recent consolidation in the fund administration industry, Henderson said: “Fund administration is no different to other areas of financial services in terms of reducing head counts. It is very costly to provide top-notch fund administration. It’s a mature business that has seen the volume of new fund launches decline significantly, hence the consolidation.”
Commenting further on potential offers from would-be acquirers, Henderson added: “Everything is on the table. If something came along we would consider it. The consolidation trend is part of a natural progression for a mature business. But we are growing. We have $110 billion in assets under administration and we serve 800 hedge funds.”
Noting Butterfield Fulcrums announcement, Michael Stapleton of the Financial Services Division at IDA Ireland says the fund administration industry in the country has grown over the last few years in spite of the global financial crisis. The 12.5% corporation tax for companies domiciled here has been stress tested during the crisis. It has proven to be robust and has given companies the confidence to go ahead with their investment plans, he says.
Stapleton says the fact some providers have contracted during the last few years is part of the natural churn within the industry. Some of the larger, more UCITS driven firms with a 800-900 labor force, including BNY Mellon and State Street, have quite a few footprints in Ireland. There is always a lot of churn of staff among fund administration providers but they have a steady footprint here. Independent providers, such as Butterfield Fulcrum, have featured as early as last year starting from zero. Another provider in this case is HedgeServ it was created four years ago in the eye of the perfect storm. It set up in Ireland in October last year with about 200 staff and theyre at 300 today.
Echoing Hendersons comments about the Irish labor force, Stapleton says: Most people think by skill and talent we are referring to people fresh out of university out of 4.5 million in Ireland, about 1 million of them are in school. However, the managerial and technical ability that has been built over the last few years has been an understated aspect of the Irish success story. You have 30 or 40 year old managers who will have spent their formative years outside of Ireland in places like California, Cayman, New York and they are now present in the local funds industry.
(JDC)