Butterfield Fulcrum
Following the implementation of Paladyne’s ClientLink platform, Butterfield Fulcrum’s COO and president explains how his firm will be be able to expand its offering beyond the back office
AST: Is the dividing line between the middle and back office changing?
Mulhern: It doesn’t seem like any two fund administrators will have the same dividing line between the middle and back office. Our definition is that the middle office refers to the tasks performed on the trade date for the client.
We were doing some middle office work for our clients using a previous system, but what Paladyne has brought us is the ability to do additional incremental tasks on the trade date, as well as perform existing services more efficiently.
Our new services include trade allocation, compliance, confirmation and affirmation processes, intraday P&L reporting and cash and collateral management reporting on trade date.
AST: Have the demands of your clients changed or is this about being able to provide services that will attract new clients?
Mulhern: We recognised a year or so ago that there is a gap between us and the four or five Tier One administrators - the State Streets, the Citcos and so on. Our services historically had being geared toward month-end, with limited amounts of intra-month activities, in the same way as most other administrators.
But we want to compete with the Tier 1 competitors and we were challenged by the gap in the service offering. So we decided that had to be changed. The decision to bring in new technology and offer more services was a business one; we knew putting together an offering like what we now have would be attractive to new and existing clients in terms of cost efficiency and transparency.
AST: Does this mean your client profile will change?
Mulhern: If you look at the changes to the fund administration industry over the past two to four years, there has been an increase in client size, complexity, the levels of offering and so on. In the past, we couldn’t even get to the table to bid for these types of mandates. Now, not only can we get to the table, we are winning them. And these mandates breed a much higher service level and offer us additional revenue streams.
AST: What was the driver for choosing Paladyne’s system?
Mulhern: The process started a couple of years ago and we already had an existing relationship with Paladyne as we used some of its systems. When we started out due diligence we found a lot of excellent systems but there were very few that did both order management and portfolio management well. So we built a shortlist of some very good systems and Paladyne was the best.
AST: What does the implementation mean in terms of your staffing and training requirements?
Mulhern: Some of our staff have previously worked in the asset management field and as such have experience of the requirements of fund managers for this new offering. So we had some of the skillsets with some of our people but we have needed to expand. This has meant additional training, as well as a recruitment process. We transferred some people out of our general fund accounting division and also hired from the outside.
AST: Will the new service be used by all of your clients?
Mulhern: As with all of our offerings, this is an optional product, and it won’t be suitable for some of our clients - within our client base we work with a lot of fund of funds, and some private equity funds, and it won’t be of interest to them.
We also have clients who are comfortable with their current technology and have no interest in changing. Often they have their own proprietary systems, and they are proud of what they can do with those. Before implementation, we approached a subset of our clients about what we’re doing, and from that we estimate that about 60 per cent of them could benefit from it.
