Link Group has signalled a major commitment to a new growth area for the firm with the recruitment of Paul Khoury to head up its investment management administration arm, Link Fund Solutions. This part of the industry is about to get very interesting.
Khoury, a former chief operating officer and chief executive of Global Services for Australia and New Zealand, at State Street, takes over from Andy Harrison, who joined Link on its acquisition of White Outsourcing in December 2016. Harrison is to join competitor Mainstream in October. With the proliferation of listed investment vehicles, driven in part by the desire of SMSF trustees for liquidity in their portfolios, the admin of managed funds of all sorts is likely to be a big growth sector in the industry.
Paul Gardiner, the Link global chief executive officer of ‘Corporate Markets’ as well as of ‘Technology & Innovation’, who oversees the business, said last week that Khoury would be focussed on lifting the group’s local organic growth as well as taking advantage of Link’s expanding global network. Link last year bought the business now known as Link Asset Services from Capita of the UK for A$1.5 billion. Link Asset Services also provides admin for managed funds, along with a wide range of trustee, banking and credit management, registry and other offerings.
But, in Australia, Link’s investment admin services to date have not had the same public profile as those of its local competitors. It looks like that may be about to change. The independent fund admin market, which handles more than $500 billion of retail/wholesale investment money, is split between fee-for-service high-volume players and boutique high-value-add players, as it is overseas. Australia’s fund administrators and member and investment software providers have a good track record in expanding overseas, especially in the UK.
The three largest players in Australia, which are all fee-for-service, are ASX listed. They are Mainstream, which has been on an offshore acquisition trail for the past two years, OneVue, which is more diversified, but Australia-centric, and Link Fund Solutions. Perpetual Trustees and Equity Trustees also offer some admin services for listed investment entities.
The main independent player which offers a basis points-orientated fee structure is FundHost, which is privately held. However, FundHost recently agreed to a fee-for-service arrangement to win the relaunch of CLFund. FundHost is in the high value-add category for its clients. There are also specialist alternative admin companies such as the global Citco and the local Custom House and APEX.
Khoury said last week: “I’m delighted to be joining Link with its enviable track record of growing successful businesses by being client focussed and investing in the right technology and people. This opportunity provides me an excellent platform to leverage my industry knowledge to enable Link to drive change.”
Greg Bright is publisher of Investor Strategy News (Australia)