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Stronger by association
In January 2018 , former JP Morgan , State Street and Citi fund services veteran Chris Meader set up a new association for administrators , in a bid to promote collaboration and the sharing of ideas . He talks about the motives behind the association and what he is hoping to achieve .
After 24-years in fund services with the likes of State Street , Citi and JP Morgan , Chris Meader established the North American Fund Administrators Association ( NAFAA ) in January . Just over six months in he has already enlisted Apex Fund Services , Stone Coast Fund Services , Basiz Fund Services and North Street Global , while Meader is confident of adding another top 10 administrator by the end of the year . Back in February , Apex ’ s CEO , Peter Hughes , said “ the US fund administration space and institutional allocators need more structure ”, when joining NAFAA , adding more credibility to Meader ’ s cause . Soon he expects the biggest players to turn their attention , and one day add nonfund administrators such as auditors and lawyers , however at present he is committing all his focus and attention to the service providers he has worked for and alongside with for the past few decades .
Global Custodian : You have worked at some of the biggest companies in the fund administration space , what did you experience in those roles that led you to start this association ? Chris Meader : There really is a lack of collaboration in the industry . Some shops are hesitant to collaborate with their competitors , but there are some forward-thinking people who realise it ’ s the way things are done today . It ’ s important to make sure that people should have the opportunity to work together and present challenges that everybody is experiencing and come up with solutions as a group . I ’ ve heard from some within these shops that wish they had the opportunity to talk to their peers at other administrators about what they ’ re experiencing , and in the legal , risk and compliance side that is really important . To have one company do it one way , a second doing it a different way , and all the others doing it another can cause dysfunction . You don ’ t have to be training each other but if people can say here ’ s our focus and here ’ s what we can do – let ’ s say – about the SEC gatekeeper , we can decide as an industry how to move forward ? I many times felt as though people are
“ I ’ m not building this to be a lobbying ground , but we need to define standards .”
doing things differently to another and not necessarily being a differentiator . For our inaugural meeting , we had 35 people show up from 30 different shops and even before the meeting the amount of people talking was incredible , then people stayed for an hour after just talking about the experience they are having around valuation issues , how they are managing fraud , and other risks and issues in the industry . Everybody embraced it , they may see each other at other conferences but this is a chance to talk about the industry , the other events are generally to meet with potential clients and get their sales pitches out . People realise that this kind of association makes sense .
GC : Are these providers happy to collaborate given it ’ s a bit of a tough time for them at the moment and there ’ s a constant consolidation trend going on ? CM : There have been people who have asked ‘ is this just an association for people to pick off who they acquire ?’ That may happen – and some shops may want that - but that isn ’ t the purpose of the association . So there is a bit of scepticism about that .
There is the whole ‘ secret sauce ’ thing that people are nervous about . But I ’ ve already put out that we are looking to define minimum standards for the industry . We want to establish the minimum standard , but how you do it is up to you and the secret sauce isn ’ t something we want to cross-train other administrators on . Minimum standards such as ensuring administrators control the bank accounts used for processing capital activity , ensuring administrators are utilising independent valuation agents , that they are vetting the AML / KYC on investors and managers etc , these are things that aren ’ t defined and written down outside of best practice guides that other associations and third parties are putting out
GC : Why does this industry need a forum , what are these best practices ? CM : It ’ s defining best practices around service offerings : investor services ,
“ We want to define standards to level the playing field for the industry , around services , technology and client onboarding .”
accounting , regulatory services , reporting , tax , defining best practices around technology , cyber security , data standards , employees working from home – those sorts of things – for example , most shops have secure connectivity when employees are working from home but some smaller shops may not have that kind of technology , so what does that mean for the clients . We want to define standards to level the playing field for the industry , around services , technology , and client onboarding .
40 Global Custodian The Hedge Fund Annual 2018