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Outsourcing asset servicing activities: a winning strategy for investment managers

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Interview of Alexandre Meyer, Chief Operating Officer, Lombard Odier Investment Managers

In 2017, Lombard Odier Investment Managers and CACEIS celebrated 20 years of working together. How has this relationship grown?

Alexandre Meyer - It began in 1997, when Lombard Odier selected Indosuez Luxembourg (now CACEIS) to administer part of its Luxembourg fund range. At the time, Indosuez had developed a cloning technique, which enabled a management company like ours to manage a single portfolio (for example in European equities) on behalf of several different funds or sub-funds. This technique was particularly innovative and at that time allowed us to offer white labelling solutions to major European distribution partners.

Alexandre MeyerOur partnership has grown progressively and, in 2010, was strengthened by our decision to create our management company in Luxembourg. For its part, CACEIS decided to establish a presence in Switzerland by acquiring a management company in Nyon and subsequently obtaining its depositary bank licence in 2015. This provided new opportunities for working together in the administration of our Swiss public funds. 

In 2016, you launched a request for proposals after which CACEIS was chosen as asset servicer for your Swiss retail funds. Why did you decide to group all services for your Swiss and Luxembourg funds with a
single provider?

AM - As regards our Swiss retail funds, we had a hybrid set-up with two separate service providers for the depositary bank and fund administration functions. We were primarily looking to simplify our operational and administrative processes and the decision to delegate the depositary bank and fund administration functions to CACEIS for our Swiss funds range was a clear fit with this strategy. During the request for proposals process, we realised the major synergies within CACEIS group in a variety of areas such as securities custody, NAV calculations, reporting, etc. Being able to rely on a single service provider for our Swiss and Luxembourg retail funds not only helps to significantly improve internal efficiency but is also an advantage for our clients who only have to interact with a single transfer agent for our entire range of retail funds.

Once the request for proposals process had been completed, we launched the migration of our Swiss fund range and I noted the high level commitment of the CACEIS employees during the entire project. We were thus able to migrate our Swiss funds on 1st June 2017. The project has fully met the targets we set when we initiated the request for proposals procedure. 

What do you particularly appreciate about CACEIS?

AM - What I most appreciate about CACEIS is the combination of highly standardised procedures and systems (meaning you can calculate the daily net asset values of more than 1,200 active classes for our Luxembourg fund range) with the flexibility it has retained to adapt to the requirements and specific restrictions of its clients. Of course the general quality of the services offered to clients remains the key to success, but the ability to listen and having an innovative approach are also very important.

A very concrete example of this can be found in the “share class hedging” offer that CACEIS has developed in recent years, which is the perfect response to a need raised by some major clients.