UK offshore islands enter BNPPSS’ matrix

Michel Laurent jokes that BNP Paribas Securities Services are strong in islands. Speaking to PWM from the company’s new office in Douglas on the Isle of Man, the head of global network and strategy has, over the past two years, seen the opening of six locations worldwide. The Isle of Man business, as well as another in Guernsey, were acquired when the bank bought up the Royal Bank of Scotland International Securities Services in June 2007. The acquisition also saw a significant scaling up of BNPP’s existing operations in Jersey. These complement the 2002 acquisition of Cogent, which added the ‘islands’ of Australia and New Zealand, and a recent move into Singapore. “BNP Paribas Securities Services is no longer – has never been – a French institution. It is no longer just a European one. It is becoming increasingly global,” says Mr Laurent. “Basically our vision is that the alternative funds industry is no longer necessarily a boutique industry, but is increasingly becoming mainstream,” he says. “We have a very significant card to play because we don’t have a boutique strategy, we have much more a one-stop-shop strategy which is allowing us to service our clients not only in different geographies but also in different asset classes. Mr Laurent’s role is to incorporate these disparate locations into a contiguous network and balance local specialities with the advantages of scale. “We need to have a very strong organisation, that I call the network, where I have a number of transversal organisation features, who are responsible for aligning operations, aligning technology, aligning the global relationship with the client, so everything is local, but at the same time is part of the matrix that is the network.” The UK offshore islands’ place in that network is not simply to tick boxes in terms of geographical coverage, according to Séverine Mangin, CEO of UK offshore markets for the bank. “The islands have a specific place in Europe, not being part of the EU, but with very stable economic and political environments and with strong regulations,” she says. “And being extremely business-oriented is something we find in each of the islands.” All three of the jurisdictions have solid ‘know your customer’ and anti-money laundering rules, and, while they are not governed by EU directives such as MiFID and UCITS III, they attempt to mirror the rules as far as possible, so as to facilitate distribution across Europe. The large private wealth management industry that is spread across the three jurisdictions also helps push the bank’s outsourcing business. “The private wealth managers are increasingly interested in outsourcing solutions, and I think that these markets here are very interesting markets for private wealth management support,” Mr Laurent says. This is beyond the typical back office outsourcing seen in the institutional market, as the complexity of instruments drives middle office challenges. “For the family office business you have more or less the same requirements as for managing large funds. It’s performance measurement, it’s very sophisticated analytics that the private wealth managers are looking for. So it’s not just back office.”