Devlin Mambo
Stuart Gordon discusses the recently launched consulting firm Devlin Mambo which is set to support the funds and asset management industry
What was the motivation behind the launch of Devlin Mambo?
We recognise that service is not delivered by putting bums on seats. There is a way of providing services that will leave clients satisfied not only with the outcome but also with the way the service is provided.
Clearly experience and personality are key to this, however, the service should also be provided in a manner that inspires trust and confidence. We also believe in creating client relationships based on a partnership which encourages long-term success for our clients, and for us. The transactional part of the relationship is secondary, and it merely reflects the execution of a service.
What are the company’s main objectives/aims?
Our company ethos is around the concept of “partnership v transactional relationships and practitioner support v theorist.” This informed our objective of providing a quality and trustworthy service delivered by practitioners which will ultimately foster effective partnerships with our clients. We understand that for Devlin Mambo to be successful, we need to genuinely support our clients.
Obviously our experience and knowledge are a significant part of how we want to be identified, so having a team of practitioners that understand that the market is continually evolving, and who are keen on keeping up to date with changes in regulations, market economics, change and technology advancements is key for us.
What is the current landscape like in the traditional asset manager/consultant engagement space?
Over the years the team have all worked with many different consultants from various firms and while some have been very good there is a consensus in the team that often consultants can be inexperienced and lacking in specific knowledge required to add real value quickly. This is where we believe we differentiate ourselves in the current market. Collectively our team has a huge amount of experience working in the asset management value chain. It enables us to swiftly arrive at informed solutions that help our clients achieve their objectives, often within tight timeframes.
Where do you see the big opportunities right now for the asset servicing space?
There is a rise in mergers and acquisitions (M&A) activity, cost consolidation and process optimisation at the moment which offers opportunities for firms such as ours to provide support across the supply chain.
As a result of M&A activity, we have seen an increase in supplier rationalisations with funds and services such as fund admin and custody moving between providers. It goes without saying that selecting the best partner to service a firm’s funds is a critical decision. A good supplier relationship should allow you to enhance your offering, streamline your processes and commercially benefit an asset manager. We have a team with a vast amount of experience in this field supported by a formal due diligence process that documents key criteria for supplier selection and provides a framework enabling our clients to select the best fit entity to partner with.
Cost consolidation and process optimisation is another area where we recognise a current opportunity. Squeezed margins through lower fees have driven a lot of managers to review their current model with the hope of achieving cost savings. We are able to offer our clients the operational expertise to ensure that they have the most cost-effective model possible. Process optimisation can be especially key with some of the boutique asset managers who use the smaller, niche securities services providers and the inherent capability constraints that can be prevalent in these relationships.
What are the main challenges for the funds and asset management industry?
Unsurprisingly the first thing that springs to mind is the COVID-19 pandemic and while we don’t yet fully understand what the economic impact will look like, most are expecting some pretty challenging times in the short to medium term. Annual management change revenues have dipped in line with lower fund values, while a significant reduction in project activity and hiring is likely as a result.
Brexit seems to have taken a bit of a back seat during COVID-19 but as one of my colleagues recently stated in another article, there may be some significant challenges ahead in terms of European distribution, especially for some of the smaller managers with no existing European presence in place. In addition, the impact of regulatory change required prior to the end of the year in the UK may add additional anxiety.
In some ways, the usual ongoing demands of regulatory change, fee compression and an increasingly complex investment environment may seem almost mundane in the context of the challenges that the industry is facing in the next 12 months.
What trends are you currently seeing from clients?
I’ve already mentioned the challenges around COVID-19 and Brexit which as you can imagine forming the basis of a lot of conversations at the moment. Cost containment is also an area of focus, with most firms considering where they can be more efficient and if their operating model is still fit for purpose. As always regulations are a theme with operational resilience, the second round of assessment of value and fund liquidity very much on the agenda this year.
Environmental, social and governance (ESG) is an area that a lot of people are also talking about, and clearly the main “mega-trend” within the industry. With the sheer complexity of the new regulations, overlapped by the impact on the existing regulatory framework, it is firmly on the agenda for all clients. The increased research, governance and reporting throughout the value chain required to manage this is something that a lot of firms on both the buy and sell side are considering.
Another subject that we are speaking to clients about is the London Interbank Offered Rate Discontinuation. The scope and complexity of this change, even for the smaller firms can be quite significant and we are finding that there is demand in the market for some help with this.
How do you see Devlin Mambo evolving in the next few years to come?
Our offering will continue to evolve in line with our expectation of what the industry will look like in years to come to ensure that we are well positioned to support our clients business models and growth aspirations. We expect a strong demand for our offering which will be driven by a market desiring practitioner-led solutions, and a market that is looking for a genuine and trustworthy service. We will also continue to embrace diversity not only in the experience that the team brings, or the capabilities we offer but in our beliefs as a firm as this enables us to understand the business environment and ultimately our clients better.
