Aidan O'flanagan, Head of Funds featured in The Drawdown

HIGHVERN

FUND ADMINISTRATION

UNDER $50BN Total assets under administration SHORTLIST

Mainspring Helvetic Maitland Crestbridge WINNER

Highvern The Drawdown (TDD): The judges were impressed with Highvern’s high level of growth, what do you think has been the main driver behind this?

Aidan O'Flanagan (AoF): The subtle difference at Highvern is our focus on client service and our team. Often the focus in the fund administration space is margins first, but our dedication to our clients and our staff makes a big difference - our priority is always quality before quantity.

Being able to speak to people and believe every word you say to them makes selling so much easier. We know what clients want and what they’re not necessarily getting, and I know we can make promises and deliver on them.

TDD: A lot of your growth has been driven by referrals, why do you think this is?

AoF: Service quality and proactiveness. We get a lot of referrals from our existing clients and as our client base grows we’re getting more exposure to intermediaries; they see our service and our happy clients. For intermediaries, they need to make sure they’re making the right recommendations as it reflects on them. As a result we have developed some great connections and relationships, not just in Jersey and the UK.

26 March 2021

HEAD OF FUNDS AT HIGHVERN

AIDAN O'FLANAGAN,

explains why putting clients, technology and staff first is a subtle but important difference in the fund administration space and outlines how their systems have been designed to cater for today’s requirements

Positive word of mouth is also playing a big factor. This can be a small industry at times and based upon feedback what we are achieving is getting around the industry.

TDD: Highvern uses very advanced technology, how did you go about setting up your systems?

AoF: We’ve been able to adopt and invest in new technologies so we don’t have legacy systems that require patch upgrades or suffer from integration issues. For now, we’re in a sweet spot where we can pick the most streamlined technology and applications that pick up on mainstream operating systems like Microsoft and implement similar methodology and technology to Amazon, Google and Spotify.

When we started researching what represents an optimal fund administration business, we were able to step back and really question why fund administrators operate the way they do. Thinking about the history of this market, a lot of firms have come out of non-fund administration organisations such as banks and professional services firms, so a lot of where the market is today was not hugely intentional.

With a blank piece of paper and the ability to question how things are being done, we identified the various elements a fund administrator has to deal with for a client, such as policies and procedures, regulation, LPA requirements; the known factors.

But it’s the unknown factors that can cause the biggest problems.

Work comes in from clients, lawyers and investors, meaning there can be hundreds of tasks coming in everyday, but how is it all tracked? With so much information coming in, the very real risk is that you’ll miss something.

We viewed this workflow situation like a raincloud, with all the raindrops falling down and the administrators running around trying to catch them all with buckets. Our biggest question was; how do we capture everything?

That’s where we started.

We're in a sweet spot where we can pick the most streamlined technology and applications that pick up on mainstream operating systems like Microsoft and implement similar methodology and technology to Amazon, Google and Spotify We mapped out where all the risks are in the delivery chain on a daily basis so that we can capture everything. That drove our systems selection and design.

Then applying agile methodology we built our workflows with controls on everything that could ever come to us.

For standard tasks such as basic transactions, capital calls and distributions, we have system based workflows. And for the unknowns; when things come out of the blue, there’s where the agile methodology comes in. We hold a scrum meeting every morning and discuss every client, look at our priorities and allocate out the work.

For every client our technology has a client dashboard with the relevant deliverables. For some of the deliverables we can build in code; on the ‘knowns’. And for the ‘unknowns’ it's entered onto that dashboard. This means our teams do not rely on paper-based checklists, outlook diary reminders or sticky notes to track workloads and all team members, especially managers and directors, can see in real time the tasks, deadlines and progress for each member of the team. And that is one of the biggest challenges for fund administrators; different people knowing different things and a lack of unification.

The other advantage of working

in this way means that we can better manage people’s individual workloads. Another big issue for fund administrators is individuals being overworked because it can be difficult to delegate and share tasks. Through our approach we can quickly move things around.

TDD: Sponsors are increasingly wanting more control over their data; does your approach satisfy this demand?

AoF: We provide access to our systems for our clients. Note this isn’t the same as a data portal, which involves the administrator uploading reports. This is real time direct access to the accounting system and their records. While we offer automated report generation, our solution goes a step further to allow managers to run financial statements, portfolio summaries and other tailored reports at any time and for any period, directly from the system with a simple push of a button. We offer this because we back ourselves; we have nothing to hide.

Typically, the client calls their administrator and requests their latest portfolio summary, for example. The admin then has to export that, get it reviewed by a manager, which can mean it takes several hours before they can meet

the request. Our system bypasses all of that.

TDD: Given the importance Highvern puts on its staff, how did you go about hiring team members?

AoF: We’ve been really lucky with staff in that we’ve been able to hand pick each member. We haven’t used recruitment agents; either they’ve approached us or we approach them. All of our team have come from larger fund administrators where they were being stretched too thinly, and wanted to work with us based on our values.

It goes back to that subtle difference, where other players may put margins first, that puts additional pressure on staff.

Whereas we’re 100% owner managed, which changes the emphasis but in the end, you still get the same or better results.

TDD: What’s your focus for 2021?

AoF: For us we want to start thinking about expanding into new jurisdictions. We’re doing great in Jersey but as well as extending offshore we’re going to need to be onshore at some point, as clients keep asking us.

For the time being, it’s about continuing to provide a really good service and winning new clients. ◆ March 2021 27