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At one with Ireland’s funds ecosystem

Meliosa O’Caoimh, Northern TrustAs Northern Trust celebrates 20 years in Ireland, Funds Europe speaks with country head Meliosa O’Caoimh about the firm’s journey in the country, and what her hopes are for the future.

In the two decades since Northern Trust has operated in Ireland, both the firm and the country’s fund industry have been on a constant growth trajectory.

When Meliosa O’Caoimh first joined the business back in 2003, it employed 80 people – now that figure is in the region of 1,600.

Similarly, the country head has seen assets under administration grow from $20 billion to around $600 billion. Today, Northern Trust is among the three largest fund administrators and custodians in Ireland by total net assets 1.

The bulk of this growth has been organic, with some acquisitions along the way, including the purchase of Bank of Ireland Securities Services in 2011. Not only did the deal further expand Northern Trust’s fund administration business in Ireland, but it also added exchange-traded fund administration services for the European marketplace to its offering.

“But it’s not all about being the biggest, that’s not our modus operandi,” O’Caoimh, who was appointed Irish country head last year, tells Funds Europe. Nevertheless, the firm’s growth story is far from over.

“Under my watch I plan to continue the growth momentum we've seen over the last 20 years,” says O’Caoimh.

Technology, which has always been a core part of Northern Trust’s business model, will play a major role in this and is a key focus for the firm over the coming year.

Embracing change
Northern Trust has invested heavily in technology to stay ahead of the curve as the funds industry continues to digitise.

“In an age where data and digital technology are now central to success, it's fair to say that historically the funds industry has lagged behind others in deploying it on significant scale – there’s a catch-up ongoing. The future is about better access to data, and improved reporting and communication with investors,” O’Caoimh explains.

One such development that addresses these issues is Northern Trust Matrix – its enhanced technology platform designed to further digitise its asset servicing business.

Through the platform, people will ultimately be able to view their business with the click of a button on their phones, eliminating bureaucracy and administrative frictions.

“What we're really trying to do is implement new ways to work together, to ensure greater efficiency in how our clients and their investors can use their data, and provide heightened information for our investors and for our clients.”

Having the right technology is becoming increasingly important in the funds industry. To a certain extent, clients are helping to drive this technological revolution. They are constantly looking to execute tasks in faster and smarter ways.

For many years now, the industry has been focusing on reducing risk and streamlining business, O’Caoimh says, explaining that she has seen a definitive shift in this space over time.

“More and more people are looking for a model that enables them to focus on their own investment management businesses and the core values they can bring to their clients,” she adds. This is especially the case at present where there is an increasing amount of downward pressure on fees and margins.

A tale of two cities
The pace of change that Northern Trust has experienced has been “phenomenal” – but it’s also been exciting experiencing the investment management industry in Ireland evolve as a whole, O’Caoimh says.

The investment management landscape in Ireland has been undergoing significant change. In a way, the growth of the Irish funds industry has mirrored Northern Trust’s own continued expansion in the country.

“What is going on in Ireland is so pivotal to all those investment solutions around the world. ;We are part here of a significant fund ecosystem,” O’Caoimh explains, adding that Northern Trust is an active participant in the Irish funds industry, and a major presence in the country.

“Our mind-set is very much to be joined up with other industry participants with regards to the latest developments in Irish funds, and work with them to effect positive change. Looking to the future, we aim to ensure that we're ahead in terms of the latest product or the latest legal structure, for example,” O’Caoimh says.

Northern Trust’s clients come to Ireland from all over the world, bringing with them their latest ideas for strategies they feel will bring value to their own investors.

They come to Northern Trust and work with O’Caoimh and her colleagues to effectively package these ideas as Irish products for worldwide distribution – “in that sense we really are a global funds hub.”

Thanks, in part, to Northern Trust’s strong focus on its people and its ability to retain staff, the Dubliner says the firm has the expertise to be able to hit the floor running when any further evolution in the sector comes along.

It’s a nimble business. One where the bulk of the taskforce is located outside of the capital, in the city of Limerick, where over 1,000 people are employed by the firm.

“Back in the day, Ireland’s financial services sector was all about Dublin, now it’s more of an all-Ireland story which has been a great development,” O’Caoimh says.

For Northern Trust in Ireland, its operating model specifically draws on the “strategic importance” of Limerick as a centre of excellence supporting the Irish industry. This is another key differentiator that sets the business apart, she adds.

The fund administrator has nurtured links with the University of Limerick, ensuring a steady stream of new talent.

Its significant presence in the midwestern Irish city, aside from being fundamentally different to how Northern Trust’s competitors operate, is also favoured by the business’ own clients. “That substance on the ground has been really important for us,” the firm’s country head says.

Lockdown in Ireland
Meliosa O’Caoimh speaks to Funds Europe from Northern Trust’s office in Dublin, having returned to the workplace following months of working from home.

“What was once before a beehive of activity is now sparsely populated due to the circumstances of the pandemic.”

Since lockdown in Ireland began, Northern Trust has been working closely with its clients to adapt to new ways of working and, as their fund administrator and asset servicer, to continue helping clients progress their businesses. 

“I'm so proud of what everybody achieved, because it really was a team effort,” O’Caoimh says.

Northern Trust had previously carried out a lot of work on business continuity solutions for any unexpected crises, and this paid off when the coronavirus struck. Feedback on how Northern Trust has handled Covid-19 has been positive, according to O’Caoimh. And the speed at which the industry adapted to the ‘new normal’ is a testament to its agility.

Ireland has cemented itself as a crucial element to this international industry, integral to its evolution. The Irish funds ecosystem nurtures a symbiotic relationship between the network of tax firms, legal companies, fund managers and providers that operate within it. Over the last 20 years, Northern Trust has proven seminal to this ongoing growth story.

1 25th Monterey Insight Ireland Fund Report, 24 February 2020

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