Magazine Issues » June 2019

Sponsored feature: IQ-EQ test

Justin PartingtonFunds Europe talks to IQ-EQ’s Justin Partington about the investor services group’s recent expansion and rebrand, as well as the importance of investor relations.

In March, the Luxembourg-based investor services firm SGG Group rebranded as IQ-EQ, bringing together many of its recent acquisitions under a new name. The acquired companies include First Names Group, Iyer Practice, Viacert and Augentius, all of which will come under the new IQ-EQ brand while some other recent acquisitions – First National Trustee Company, Lawson Conner, Equitis and The Private Office – will retain their standalone brands.

IQ-EQ now has a workforce comprising more than 2,450 people in 23 countries and assets under administration of USD 400 billion. The expansion strategy is part of an objective to bring more service quality, breadth and scale to the specialist administration sector. The purchase of private equity and real estate administrator Augentius brings undoubted scale while the acquisition of First Names has seen the group further expand within the private client’s space.

“This rebranding exercise was more than just changing our name, we have integrated seamlessly a number of large, well-established businesses with some smaller but reputable brands under one name,” says Justin Partington, group head of funds, IQ-EQ. “Our new name unifies our brands under a unique and vibrant new identity. It bonds our staff under one promise: global technical expertise combined with a deep understanding of the needs of our clients.”

Shortly after announcing the new brand, IQ-EQ published the findings of its industry report based on a survey of more than 120 international fund professionals. Whereas the previous three surveys showed a steady optimism among managers, this year found a levelling of that optimism. In 2018, more than 50% of the money raised went to the 50 largest private equity funds and 30% of respondents expect 2019 to be even more challenging when it comes to fundraising, up from just 18% of respondents.

According to Partington, the competition for fundraising should lead to a greater attention on investor relations, despite the fact that just 2% of respondents mentioned it as a focus for 2019. “It is clear from the survey findings that building and developing strong investor relationships will need to become a priority,” says Partington. “Improving this through class-leading transparent financial reporting and access to portfolio data will put managers in good stead to gain that crucial edge in an unpredictable environment.”

Partington says that IQ-EQ’s alternative assets reporting business has seen increased interest from private clients that are looking for more information regarding their investments but have not traditionally been strong users of technology. “Many of them are looking at a third-party reporting platform that allows them to focus on their strengths, which is managing their investments. They don’t just want a bland document. They want dashboards, information portals and self-service reporting.”

Improved investor relations would also help meet the ongoing push for transparency, says Partington. “We have seen continuous pressure on fees, more attention on deal costs and monitoring of performance fees. Investors want to know how managers generate fees and create value. The more information managers can provide, the more comfort their investors have with the risk and reward.”

Partington says that a greater breadth of reporting, covering qualitative as well as quantitative issues such as ESG and reputation, is a sign of growing maturity in the industry and a willingness to look beyond the numbers. “There are still a number of costly operational challenges connected to reporting, such as the lack of standardisation and the sheer amount of data out there. This is particularly challenging for smaller firms but technology and the availability of third-party reporting services is the best way to level the playing field.”

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