The third-party ManCo market is booming but Global CEO Derek Delaney (pictured) and Marketing Director Alison Mitsas explain what it is that makes Waystone distinct. Key differentiators include a truly global presence and a distribution support offering.
Bringing together three businesses to create one new, global brand can be a tall order but the integration of MontLake, DMS and MDO to create Waystone has now completed and the result is a truly global fund services provider with operations in eight key financial jurisdictions, including five European offices. Its operation in the Cayman Islands offers a full suite of services to assist with fund launch including independent directorships and a range of regulatory and compliance platforms designed to ease the burden on fund managers. Waystone currently oversees global assets under management (AUM) of US$1Tn and, in Europe, almost $100Bn.
The creation of Waystone came about when the three seed firms realised that their complementary services made for the perfect combination to meet the demand in the burgeoning third-party management company – or ‘ManCo’ – market.
Announcing the merger last year, Derek Delaney, Global Chief Executive Officer, said, “As our industry continues to evolve rapidly, we identified demand for a robust and institutional service provider. This is an opportunity to combine the expertise and experience of DMS, MDO and MontLake, to create a leading fund governance and third-party management company offering that is unparalleled in terms of the depth and breadth of services provided.”
The new Waystone brand officially launches in March 2021. The task of combining the three firms began last year and looking back on the process, Alison Mitsas, Marketing Director, said, “It took a lot of hard work, there were a lot of moving pieces, but the integration has been seamless – and this is a true testament to the teams that made it happen.
We realised from the outset that we shared similar values, such as being proactive, principled and inclusive. So, culturally, the three companies are a very good fit.”
Waystone operates from eight global jurisdictions, including five European offices that include Luxembourg, Ireland, Switzerland, and the UK. The firm specialises in institutional governance and third-party management services. Waystone was formed from the merger of; the DMS Group, a governance, risk and compliance business; MDO, a UCITS and alternative investment fund management governance provider; and Montlake, a UCITS management company and alternative investment fund (AIF) manager. The result is an extensive portfolio of services offered across multiple asset classes and jurisdictions.
Among these services are a range of Europe-focused support services, including, services assisting with the onerous requirements on asset managers stemming from MiFID II. Services also include risk management and regulatory reporting.
Beyond these ‘ManCo’ staple services however are more niche offerings including, consultancy for European structured finance, Swiss fund services, distribution, tax-compliance and specialist ESG services.
Summing up Waystone’s offering, Delaney says: “The three sides of the business all operate within the governance and compliance space, with a focus on European management companies. At the heart of everything we do is the investor and we now have an offering that allows us to deal with any requirements that our global, institutional clientele might have.”
The range of services provided by these three companies had also been bolstered by earlier additions to the fold. As well as combining DMS, MDO and Montlake, there were notable historical acquisitions. In September 2019, DMS acquired Host Capital, an independent Authorised Corporate Director (ACD), essentially a UK version of the EU’s ManCo model. The acquisition enabled DMS to expand its European products and bespoke services to asset managers operating UK-regulated investment funds and provide them with tailored solutions for any Brexit-related requirements.
In July 2020, it acquired Oligo Swiss Fund Services, followed in December by Azienda Financial Services, a firm specialising in administering investment structures for private equity, real estate and structured finance investments. Reflecting on the acquisitions, Delaney says: “The services that we gained have complemented our already broad range of services allowing us to extend our reach and be present in all the key markets with dedicated local licences. It’s one of our points of difference, that we are able to operate on a standalone basis in all major financial jurisdictions.”
Waystone has other strengths, Delaney adds: “One of our advantages is that we have a distribution operation, which comes from the legacy MontLake business. This includes the capital introductions business, which enables fund managers to access market intelligence, research and ideas on how to raise money and define their asset-raising strategy on a global basis.”
Distribution capabilities are a key market differentiator for Waystone, says Delaney, “We structure funds and vehicles and support clients with their asset raising plans and strategy. We have a distribution hub, providing market intelligence for managers and supporting them with research and tools for their distribution strategy. When clients come to Waystone, they don’t only come for the fund structure, but also for all these added benefits that will accelerate their asset-raising strategy and ensure that it is a smooth process for them.
In addition to this, we offer a sales team that is dedicated to raising money for a limited number of funds that Waystone acts as management company for. They’re based across Ireland, the UK, Germany and Switzerland, so they are very much a pan-European team.”
While Europe is a focal point for Waystone, there are also plans for expansion further afield says Delaney, “We’re looking closely at the US, where we are keen to develop our governance and compliance services, as well as Asia, particularly Singapore, with regard to its new Variable Capital Company (VCC) structures.”
The firm plans to grow both organically and through acquisition, says Delaney “This means we’re one of the largest third-party management companies in the market from a European perspective.”
The team has expanded to around 320 people and over 60% of the workforce is based in Europe. Mitsas says the firm has been “hiring steadily, even throughout the pandemic” with currently 20 open roles.
Mitsas says Waystone’s success is due to it being considered as a very safe pair of hands, “We carried out extensive research before creating the Waystone brand, asking clients, referrers and staff across the organisation to share their views on the businesses. One of the main points arising from the feedback, especially from clients, was that we provide peace of mind. Our clients reported that they feel reassured, knowing that we are at the helm, managing their structures and investments – and that we are not just up to speed with, but ahead of the game, on regulatory issues.”
This input helped define the new brand, Mitsas says, “That’s how our new tagline was born - ‘Certainty in your world’.”
Looking ahead, Waystone is well positioned for growth as it extends further into its key regions. It’s comprehensive range of services and key differentiators allow it to support clients and their investors, leaving them to do what they do best - focus on managing their investments and raising capital.
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