Global Head of Securities and Fund Services • Citi • New York •
For many years, custody was a domestic industry, and cross-border investments were limited to the industrialized economies of the Western world. However with the push toward the emerging markets, beginning in the 1980s, investment management became truly global. Today, countries such as India and China are considered mainstream, and asset managers are even looking at frontier markets such as Zimbabwe.
Most of the emerging markets that are in vogue have modernized their infrastructures, says Neeraj Sahai, global head of securities and fund services for Citi. This is a significant metamorphosis from the early days when clearing and settlement was physical and manual in these countries, though work yet remains in the area of corporate actions, which remains a potential source of systemic risk. In addition, the much-touted integration of Europe has not fully played out.
Sahai has seen these changes happen during his more than 25 years at Citi, where he began as a management associate in 1984. Today, as global head of securities and fund services (SFS), he’s responsible for the bank’s global fund administration, custody, securities clearing and finance, depositary receipts, trust, alternatives and other services in Citi’s newly formed institutional clients group, a division that has been a well-performing bright spot for Citi amid the turmoil that has embroiled the rest of the bank since the onset of the financial crisis.
Before his current role, Sahai was CFO of Citi’s global transaction services, responsible for finance, risk, control, strategy, treasury and M&A. He also served as managing director of Citi’s audit and risk review group for markets and banking. Sahai is a member of the boards of the International Securities Services Association and the Depository Trust and Clearing Corporation (DTCC).
It’s been a career that has seen monumental shifts in the industry, and the intricacy that has evolved will continue to affect the industry’s future growth, he says, by the compartmentalization of client needs.
“The tailoring of solutions will continue, and, as a result, the game is going to be based on scale and scope for custodians,” he says. Custodians and asset managers will have to adjust to this new reality, and, as the pressure on margins among asset managers steps up, “they’ll look for custodians to deal with costs and help with customized products and to minimize operating risks,” he says.
It’s a change Sahai feels confident that Citi will be able to weather with its role as a universal bank.
“In a complex world: One size will not fit all,” he says. Citi and others will need to build a modular infrastructure so clients can pick and choose what works for them and change those offerings as their clients’ needs change over time. “The fabric is much more complex,” Sahai says.