“Luxembourg is a very important jurisdiction for us–within the context of where we are globally, but also what our clients want globally,” Ocorian CEO Chantal Free told Paperjam during an interview at the firm’s Luxembourg offices in Cloche d’Or on 19 November 2024. Ocorian, a provider of fund administration, compliance, corporate and fiduciary services, has offices in more than 20 locations around the world. Luxembourg “has proven to be a reliable, safe jurisdiction where we have a really strong regulatory framework, really transparent tax framework.” But it’s also a place where “expertise constantly evolves.”
The grand duchy has the “best of all worlds,” she said. It’s safe, but also progressive and has the “ambition to maintain its high quality of expertise. And that really is what a lot of our clients want and appreciate.” Though it may be expensive as a jurisdiction, that’s because of the “quality and expertise” that comes with it. “It’s actually a jurisdiction where our clients feel very comfortable operating in,” she added.
But those clients are not just limited to Europe. “What we’re seeing is a lot of our North American clients are very interested in Luxembourg,” said Free. “It’s a great gateway for accessing European capital. “A lot of our North American clients, North American fund managers think there’s a lot of European dry powder to access. And Luxembourg is a great place from which to access it.”
Complex problem-solving expertise
All of this makes Luxembourg “a really important jurisdiction” for Ocorian to continue to invest in. The company has around 180 staff members in the grand duchy at the moment, with services across the funds, capital markets and corporate services space. “I’d say we are an asset servicing business. So, we service either the asset owner or the asset manager–and both of them do congregate around Luxembourg.”
Luxembourg, added Free, is a “place where we look at for complex problem-solving.” As an example, she explained: “We have a capital markets client who wanted to have a solution around a syndicated product. So we brought our own expertise, the expertise of different market participants to solve their problem.” Another example concerned a Canadian fund who was raising funds in Europe for the first time. “We partnered with them, and we explored the fundraising environment for them in Europe–but again, from Lux,” she said. “It’s a centre of expertise where you go to solve really complex problems.”
I don’t think that we ever want to be the biggest… but we certainly want to be the best
“We think that there’s a lot of tailwinds behind this jurisdiction, and we want to make sure that we ride those tailwinds and we continue to grow our current market share,” said Free. “I think our reputation is one of quality. I don’t think that we ever want to be the biggest… but we certainly want to be the best. So I could see definitely us continuing to invest both intellectual capital as well as leadership focus.”
“As Ocorian, we are in a really interesting space, because we now have the size and scale to be able to serve our clients across geographies and across their complex problems” and provide “tailored” solutions. “I don’t think that we will ever be a massive organisation that just standardises how we approach clients and problems,” she added, emphasising that the firm’s strength relies on its expertise and the trust of its clients.
A hope for more certainty in 2025
Looking at the asset servicing industry as a whole, Free said that she thinks it is continuing to grow. “It has gone through a couple of difficult years because of the–mainly–interest rate environment. The inability to raise funds and launch new funds, inability to execute in a lot of M&A transactions, whereby there is money around, but there’s been a lot of uncertainty in the market. We had a record year of elections globally, but the fundamentals of our industry are still there.”
“The interest rate environment we hope will ease. We hope the M&A and deal volumes will increase. There is certainly a move to outsource more and more because the regulatory and compliance environment is getting more and more complex. That’s definitely what we’re hearing from our clients. A lot of them want to build resilience in the system, particularly regulatory and compliance resilience. A lot of clients are finding it very difficult to do it themselves now. So I think organisation like us has a big, big role to play to make sure that the market remains safe.”
“There are so many opportunities around technology, artificial intelligence, automation, etc. to get broader insights to questions and [to understand] the data better,” concluded Free. “There are loads of things that make me think that there is a positive future, but there are still some uncertainties in the market. And definitely, 2024 was a year of uncertainty, but I hope that with many of the very significant elections behind us that we get more certainty in 2025.”