With so much consolidation activity taking place across the fund administration sector, we are beginning to see the emergence of several large genuinely global players. As that development takes hold, inevitably, smaller and more agile players are coming to market, taking advantage of rising discomfort levels, brought about by the tricky task that comes with consolidation – namely, integration.
Indeed, recent years have seen the arrival of more boutique offerings, including Highvern and Oak Group in Jersey, while very recently Khepri was launched following the management buyout of four of MJ Hudson’s operating subsidiaries.
We sat down with two of these newer players – Petra and Khepri – to find out their reasons for launching in this environment.
Petra Funds Group
Launched 16 months ago by two former fund CFOs and two former fund general counsels, Petra’s mantra is simple: listen.
“When I was a partner at a fund, our lawyers and bankers were treated as ‘trusted advisers’. But that wasn’t the case for fund administrators, there just wasn’t that dialogue,” recalls Stephen Coats, co-founder of Petra. “The private equity industry is trained to think of admins simply as processors of data and the admin industry has not done much to change that view. Our goal is to be a trusted adviser to every client, not just a service provider.”
In setting up Petra, Coats and his co-founders wanted to foster trust between the fund administrator and its clients. “We want to be available to answer questions, to talk about best practices and upcoming trends in the round, rather than just showing someone what a portal looks like.”
In order to facilitate those sorts of conversations, Petra set about building a team of highly experienced people. “As long as we can hire skilled people from within the private equity and private debt space, then we can provide the right service because we have sat in the seats of our clients,” says Coats.
And to do that, Petra sticks to its mantra; it listens. “Everyone has an idea about how to do this better but the most important thing is to listen to your teams. If you give people the chance to be heard, advance in their career and treat them as professionals they will stay. We’ve had very low attrition. Step one is not trying to build a vague ‘company culture’ – it’s just listening.”
In March 2023, Will Roxburgh and Mike Booth led the buyout of MJ Hudson’s UK regulatory and fund management business to form Khepri, a consulting and outsourcing partner to UK funds, fund managers and financial markets companies,
The deal was backed by a private investor, ensuring the company has regulatory and growth capital in place. And to provide continuous service for its circa 100 clients.
For Roxburgh, Khepri’s competitive edge in a market full of larger players moving towards high-tech offerings is to double down on people. “We’re not shying away from the fact that this is still very much a people business.”
And that focus on people is about providing support and care to clients. “Fund administration and regulatory hosting are just buzzwords for what is actually a support network. We are most valued by our clients when we are providing a proper level of care and problem solving.”
Despite operating in a hugely competitive market for talent, Roxburgh believes that this focus on support and individuals’ value is also key to attracting and retaining the right people. “It’s providing the proper level of accountability and personal worth, which means we need good people who genuinely want to add value and make the journey pleasurable for managers. With that, we provide a lot of internal training and support across various business lines to ensure everyone understands fund structures, and especially the pitfalls a fund manager might face in their growth journey.”