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« Services to asset managers are now the biggest growth driver. »
Christian Heinen, you have returned to Luxembourg beginning of this year after six years spent in Hong Kong and China, and joined SGG to take up the role of Managing Director responsible for Luxembourg. What are your first impressions?
During these years I lived and worked in Asia, Luxembourg has definetely undergone some developments. The streets are more crowded and it has become an even more international place. It has established itself as the alternative investment hub for European investments, next to Ireland maybe. But Chinese investors for example have always had Luxembourg on top of their mind when it came about their ventures in Europe.
On the regulatory side, things have changed as well over the past years. There are more CSSF circulars which tend to be longer and more complex, reflecting an increased level of regulations. A strong compliance department and governance framework are more relevant than ever. This also applies to our clients, as they face similar challenges. They need more than ever strong partners in the market to help and to guide them through these challenges. That is part of SGG’s mission.
What is SGG’s position in Luxembourg and in the rest of the world?
SGG is one of the leading investor services firms in Luxembourg and in the world with a presence in over 22 countries, with our headquarters located in Luxembourg, where we have over 300 people. We are among the top three investor services providers in a number of key jurisdictions such as Luxembourg, the Channel Islands, The Netherlands, Singapore, Mauritius and Curacao.
Our industry is in a phase of consolidation, which has led to a Big 6 or Big 8 industry landscape in the fund and corporate services sector. I believe that it will not stop here and SGG is clearly one of the market consolidators.
How has SGG managed to evolve along with the market in recent years?
SGG has a very rich and interesting story, and it has started to operate under the name SGG in 1998 following a buy-out from the Arthur Andersen Group. However, the history of the firm dates back to 1896 in the Netherlands and 1953 in Luxembourg.
The firm has experienced solid organic growth over its years of operation and since 2016 it has undergone an impressive global expansion through a number of recent key acquisitions; namely First Names Group, Iyer Practice, Augentius and Lawson Conner (with the latter two pending regulatory approval). These are exceptional businesses, regarded as leaders in their respective field, in terms of quality of people and work. They have experienced strong organic growth over the past years and are complementary to SGG’s current offering, both geographically and service offering wise.
Our most recent acquisition for example, Augentius, will reinforce SGG Group’s position as the 4th leading investor services firm with the deal growing its assets under administration to over USD 400 billion. Lawson Conner is also a great addition as it allows us to offer institutional clients a complete suite of compliance and regulatory services.
Following the completion of the acquisition of Augentius and Lawson Conner, the firm will employ over 2,300 people in 24 jurisdictions.
How about in Luxembourg? Have you a seen an evolution in the market and in the way SGG positions itself?
The market has definitely evolved and continues to evolve. Services to asset managers are now the biggest growth driver, and SGG Luxembourg has established itself as a provider of fund, AIFM, depositary and regulatory compliance services in Luxembourg. We have now a highly qualified team of over 70 professionals dedicated to the fund segment with strong experience across different asset classes.
The uncertainties surrounding Brexit are likely to further fuel the demand for these services in Luxembourg so we continue to build this out. Fund managers are looking to have a single provider who can provide access to a number of platforms. Thanks to our strong international footprint now and operational platforms in all key fund jurisdictions, we are able to provide truly global solutions to institutional clients.
What is your focus for 2018 and 2019?
SGG Luxembourg’s focus is aligned with SGG Group, that is retaining our staff, assuring service quality, and growing client revenues; not by changing fees but by offering them more tools and solutions to add value. We really focus on long-term sustainable growth, and not on short-term ‘cost cutting’, in order to achieve these objectives. There will be decent amount of effort on integrating the different firms group wise, but that is not going to distract us from what matters most – our staff and clients.
Published in AGEFI.