NES Financial is now JTC Americas.
Right as COVID-19 was dominating the news and impacted stock prices around the world in late March, JTC Group, an award-winning provider of fund, corporate and private client services to institutional and private clients, operating in 19 countries, servicing over $130 billion in assets, decided to still move forward with their bold plans to acquire NES Financial.
At the helm of JTC’s decision to stay the course was JTC Group’s CEO Nigel Le Quesne, who had spent time in NES Financial’s San Jose office to get to know the company and its staff a few months prior. For Le Quesne, who joined JTC as its fifth employee in 1991, he knew that acquiring NES Financial would be a good fit, and the rest, as they say, is history.
We recently chatted with Nigel to learn more about why he wanted to acquire NES Financial, as well as his thoughts on “responsible capitalism,” his forecast for the rest of 2020 and more below.
What specifically attracted you to acquire NES Financial?
NES Financial is a great business with a fantastic team, strong track record, excellent clients and some genuinely innovative and cutting-edge technology. Strategically, we have been wanting to expand our presence in the US to participate in the fast-growing fund administration market and NES Financial is the perfect platform to help us reach our ambitions and drive long-term growth. In addition – and as a Group that has made nearly 20 acquisitions over the last decade – we were really attracted to the culture of NES Financial, which is based on deep client relationships, a passion for service excellence and an entrepreneurial spirit deeply rooted in their Silicon Valley heritage. It’s easy to find businesses to acquire, it’s much harder to find businesses of high quality that also have the right cultural fit, so we’re delighted to welcome the NES Financial team to the JTC Group.
Why is fund administration and third-party oversight personally important to you?
I am passionate about all parts of our business, but fund administration is particularly exciting because it has so much potential and carries so much responsibility and impact when it is done well. Historically, funds have managed their own administration, accounting and compliance in-house, but as the industry has grown and developed globally, especially alternative asset classes, it has become more and more compelling for managers to outsource administration tasks to a third-party expert that has the right people, knowledge and technology to complement the managers’ skills and let them focus on their core business. At JTC we have always taken a partnership approach with clients and believe that our role is to act as a seamless extension that provides exactly the right combination of services and capacity to help our clients succeed over relationships that typically span up to 10 years or more. That depth of service relationship, and keeping up-to-date on all the relevant strategic, regulatory and technology developments is what motivates us to be best provider in the fund administration market.
What makes JTC different from other fund administrators?
We ultimately differentiate on the service we deliver for our clients and the value we add over the lifetime of relationships. We successfully achieve this by putting the client first, working to understand both their long-term strategy and their immediate needs, and then delivering the optimal blend of people and technology. The other major factor is our shared ownership culture, which has been in place for over 20 years. At JTC, every single employee is a direct owner of the company and that ‘skin in the game’ creates a unique culture of passion, attention to detail, loyalty and excellence that translates directly into the service we deliver.
What role does technology now play for JTC after acquiring NES Financial?
We believe that our offering is about people AND technology, but that the role of technology in that equation is growing all the time. We see technology as an enabler of client service excellence that allows us to provider better, richer services to clients as well as improve accuracy, speed and efficiency. If you combine the best human talent with the best technology, you have an incredibly potent combination and that is why we are so excited to have NES Financial, along with its Silicon Valley DNA, as part of JTC.
What is the importance of NES Financial now being able to have multi-jurisdictional offerings as a JTC Company?
Financial services, and specifically fund management and administration, is a global industry, so NES Financial now being part of JTC’s international network – which spans 23 offices in 19 different countries – opens the door to a whole range of opportunities for new and existing clients. In fact, in the few months since we completed the acquisition of NES Financial, we have already seen strong demand for multi-jurisdictional services from existing US clients, who are requesting our support in key fund domiciliation markets such as Luxembourg, London and Dublin as they seek to expand their operations and access international capital. In addition, many of JTC’s existing clients, including our UHNW private and family office clients are eager to access onshore services in the US and to take advantage of the market-leading technology solutions that NES Financial can provide.
Why is shared ownership and making employees stakeholders personally important to you?
It’s not an exaggeration to say that shared ownership IS our culture at JTC and I am unbelievably passionate about it as a way to create the right environment, and foster the right behaviors, to deliver ethical, sustainable and long-term growth. Concepts such as responsible capitalism and environmental, social and governance (ESG) focus are high profile today, but we have been practicing shared ownership since 1998 when I created our first employee benefit trust and made every employee an owner of the business. Since then we have created over £250m ($308.7 million) of value for our employee owners and the culture it created has ushered us through an impressive growth trajectory, which includes 32 years of revenue growth, 32 years of profitability and 30 years of profit growth – a track record we are collectively very proud of. We also had the unexpected honor in 2019 of having Harvard Business School write a case study about our shared ownership model and its success as part of their MBA program, which was a wonderful external validation of something that comes naturally to us, but has to be fed and nurtured every day.
Why is ESG important and the concept of “responsible capitalism” to JTC?
ESG and responsible capitalism align perfectly with our shared ownership ethos and culture, so it’s fantastic to see these concepts gaining mainstream attention and traction. We have always sought to create a sustainable business and to be a responsible partner in the value chains of our clients. The social and governance parts of our business are firmly established aspects of our heritage and service offerings, and by doing so, we are also able to be part of the solution in areas of environmental impact and climate change. We are also ideally placed to help our clients in achieving their ESG goals, both directly and in terms of providing services such as ESG compliance and reporting. The current global coronavirus pandemic is a terrible tragedy, but it also highlights how companies such as JTC can support the solutions that are needed to get through it. Whether that’s serving multinationals that are involved in vaccine efforts, pension funds that support millions of workers, wealthy individuals and families that want to make philanthropic contributions; or our collective donation to support COVID-19 relief efforts, JTC can be an essential administration partner to all of them.
Forecast: What does the rest of 2020 look like for fund administration, especially JTC?
As someone who has been fortunate enough to work in this industry for a long time (including nearly 30 years with JTC after joining as the fifth employee in 1991), I do have the advantage of having lived and worked through previous global crises and upheavals, including 9/11 and the financial crisis of 2007/8.
What I’ve learned from those era-defining periods is that during times of extreme change, clients need more support, not less, and if we help our clients navigate the challenges they face, then our relationships, and ultimately our business, can emerge stronger and more resilient than ever over the long term.
As anyone would expect, the whole sector has been impacted by the Coronavirus pandemic and the full extent of what that means will take more time to play out fully. However, we believe that wherever there are challenges there are also opportunities, and with that in mind, when markets recover, we would expect a continuation of the established trend for many fund managers to engage with the opportunity to outsource their administration to a first-class partner, such as JTC.
Lastly, how do you pronounce your last name?
It’s actually a French surname and is phonetically pronounced as ‘Le Kayne.’
For more information about Nigel, or NES Financial and JTC’s joint solutions, please click here.