Apex weighs US deal to break top five

The chief exec of Apex Group has said he may buy a US firm to realise the fund admin giant’s plan to become a top five player in the world’s largest investment market.

Speaking to Global Investor, Peter Hughes, the chief executive officer and founder of Apex Group, said the Bermuda-based firm has done a fine job of digesting three big takeovers in the past two years and is looking at its next deal.

He said: “The US is one market where we feel we are underweight. US fund administration is not regulated so it is a disjointed market. In Europe for example, we would find ourselves competing with maybe 20 firms but, in the US, that number could be as high as 100.”

Hughes added: “It is possible we may enter into more M&A to add to the product mix in the US where we are aiming to be a top five player.”

Apex has changed beyond recognition in the past two years with the October 2017 deal to buy Deutsche Bank Alternative Fund Services, the January 2018 acquisition of MM Warburg’s asset management and servicing business and its January 2019 takeover of Link Asset Services.

The group now has 3,000 staff in 40 locations handling over $650 billion of assets. Apex also now offers the full suite of fund services and has identified the world’s largest, multi-jurisdiction funds as key targets.

Hughes said: “A priority for us is new clients, particularly those firms that are cross-border rather than based in a single domicile.”

With that in mind, Hughes said Apex is looking at opportunities presented by the gradual opening up of the vast Chinese market: “We are also interested in working with outward-bound investment flows out of China. We have big teams in Shanghai and Hong Kong but businesses like this take time and investment to build.”

Apex, like most of its peers, is also looking at opportunities presented by the apparent rise and rise of environmental, social and governance-based (ESG) investing.

Hughes said: “When it comes to ESG, I think Apex can play a role in helping firms measure companies’ performance on the E and S which could ultimately force firms to change their behaviour.”

Apex Group said in a statement on Wednesday it had created a Shadow Executive Committee comprising non-executive high-achievers with diverse backgrounds to offer different perspectives and encourage dynamism.

Apex was also selected on Wednesday by Assembly Funds Management and AMAL Trustees to provide administration services for a new Australian real estate fund.

US analytics firm eVestment published in July a report suggesting takeovers in fund administration were likely to continue, adding “we continue to see the same rationales for further consolidation”.