GC Friday Interview: Tim Calveley, Deputy CEO of Mitsubishi UFJ Fund Services on the Acquisition of Meridian Fund Services

Mitsubishi UFJ Fund Services bought Meridian Fund Services as part of a wider growth strategy to become a leader in the global investment services industry, both organically and through acquisitions. Tim Calveley, who joined MUFJ last year as part of its acquisition of Butterfield Fulcrum, talks to Global Custodian about the lessons learned from the integration of that business and how they can be applied to that of Meridian.
By Janet Du Chenne(59204)
Mitsubishi UFJ Fund Services bought Meridian Fund Services as part of a wider growth strategy to become a leader in the global investment services industry, both organically and through acquisitions. Tim Calveley, who joined MUFJ last year as part of its acquisition of Butterfield Fulcrum, talks to Global Custodian about the lessons learned from the integration of that business and how they can be applied to that of Meridian.

The acquisition of Meridian, which has $14bn of assets under administration (AuA), raises MUFJ’s AuA to approximately $165bn, servicing over 300 clients and 1000 funds. What personnel changes can be expected?

TC: The Meridian guys who are servicing clients today will be the same ones post transaction. So that’s the core to keeping clients happy. Obviously there are a whole lot of new exciting products and services we can bring to Meridian clients as we are bringing them into our own client base. So over the course of the integration period, which should probably last 12 to 18 months, we will look to integrate all of the Meridian clients onto our technology platform while maintaining their current staff in doing so.

There are about 60 staff members at Meridian. Existing management are all coming on board. We’re looking forward to their experience and dealing with their clients and their industry relationships. One thing that’s exciting for us is that a lot of the existing management has deep relationships in the alternative world. There are a lot of clients that they have connections with but they weren’t able to bring onto the Meridian platform due to being too small. Now they are part of the 6th largest bank in the world with 2.4 trillion of assets behind us so that goes away. So we are very excited about bringing that management team on and through their network helping us bring in new clients to the combined businesses.

As a former Butterfield Fulcrum manager, what has been your experience of the transition of an independent fund administrator into a large Japanese bank?

TC: Ahead of the acquisition there was a lot of concern from some of our senior management around “we’re a fast moving independent and now we are going to be part of a multinational bank”. We were worried about being slowed down by bureaucracy. During the acquisition process while we were speaking with the Mitsubishi guys we were very adamant that we wanted it to be successful. We had to maintain our culture and the way we do things. The great thing is that they listen to us and it’s the same management team who was running the business at Mitsubishi that is now in place. We have a couple of additional Tokyo executives who joined us within our offices but they’re just part of our management team. We’re just doing things how we did them before which is why we’ve immediately been able to post that acquisition, consider and implement brand new acquisitions right away. The reaction from our staff and our clients has overwhelmingly exceeded our expectations so we have been absolutely delighted since the Mitsubishi acquisition.

At Butterfield Fulcrum, did you specifically look at a bank as a potential acquirer?

TC: When we went through that process we had a lot of people who were very interested in our business and many interesting conversations. We were very pleased it was not going to be another private equity firm because that would have been a hard one to sell to our clients and staff just because what we have now is a long term owner and a long term vision. We had no staff or clients wondering when the next transaction is and what we’re able to do now as part of Mitsubishi is invest for the long term and make long-term decisions. We were delighted, out of all the possible strategies we could have gone to, about being part of a bank, which didn’t have any fund administration arm but were buying us to be part of their global platform. That was absolutely the best possible outcome because there was no worry about staff and office locations. There was no closure of any offices or jobs and clients were delighted that they could tell their investors that they are finally being administered by one of the largest banks in the world.

Why did MUFJ look at fund administration in particular?

TC: They have for a long time tried to get into global fund administration space and they are one of the largest custodial banks. So we are currently combining custody, fund administration, banking, lending and FX under one umbrella, in the same manner that State Street, J.P. Morgan and Northern Trust do as well. There is certainly a need and a desire for clients to have all of those services under one umbrella and under one servicing team. There was a desire to move more into the US as well.

What’s next for MUFJ in the fund administration space?

It’s business as usual right now. We have a lot of exciting opportunities: we’ve opened up the Tokyo office recently, we’re looking at other agent locations, we’re having a lot of interest and a lot of introductions from funds we weren’t in front of before so this is really an exciting opportunity for us. And having this acquisition as well proves to our staff, our management and our industry as a whole that we’re 100% committed in this space and we are on the path to being a much larger player in the global investment space.

MUFJ’s acquisition of Meridian is expected to close in the coming weeks, subject to regulatory approvals.

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