Video Transcription

Alan Meaney: Welcome to the first episode of Dublin Fund Talks, hosted by Alan Meaney of Fund Recs. Today, I'm delighted to welcome Shane Brett of Global Perspectives and Gecko as our primary guest. Nice to see you, Shane.

Shane Brett: Thanks for having me out, Alan. Great.

Alan Meaney: So this whole series is a little bit about the people in the funds industry in Dublin, how they got into funds, what they're working on, and really, it's an informal chat more than an interview. So I'll kick it off, Shane.

Shane Brett: Yeah.

Alan Meaney: Tell us a little bit about yourself, your companies and how you got into funds.

Shane Brett: Absolutely, absolutely. Yeah, so Shane Brett, I work in funds, God, for the best part of two decades now. So currently, I run two different companies, and I'm the founder of a consultancy mainly focused around hedge funds called Global Perspectives. Do a lot of work out of here, and in Dublin and London, as well. And also, last year, I co-founded a tech company as well, called Gecko, which is definitely keeping me busy at the moment, as well.

Alan Meaney: Sure. Yeah, yeah.

Shane Brett: So as I said, probably 18 or 19 years in hedge funds. Started way back on the fund administration side.

Alan Meaney: Yeah.

Shane Brett: Back in Dublin, like you know it's-

Alan Meaney: Like myself.

Shane Brett: Absolutely. Straight out of college, on the fund accounting. Dublin market was a lot smaller then, you know?

Alan Meaney: Yeah.

Shane Brett: And over the intervening years, probably spent maybe 10 years or so on the administrator side, and then traveled a bit around the world, went over to, did the Australia thing. And worked in Edinburgh for a while, and in London for many years. And that was mainly around the manager side. A number of years ago, I kind of realized what I had. Maybe the best parts of a decade on operations, but then also experienced working with the managers, particularly alternative managers.

Alan Meaney: Yeah. That's a great perspective to have.

Shane Brett: Yeah, it was great to see things from both sides, and understand their pain points and their challenges as well. So then back about... kind of on the back of the financial crisis in 2008, I was in London for all of that. Actually my first day working in London was the day Lehman's collapsed, which was September the 10th 2008. I'll never forget that day as long as I live. But basically, I realized as the markets were being abandoned, that it was going to be a whole avalanche of regulation, which is going to hit the fund industry. And especially European regulators are really going to use that as an opportunity to try-

Alan Meaney: They definitely did.

Shane Brett: Yeah, this is it exactly. Regardless of whether it was the hedge fund industry's fault, when they were going to use it as an opportunity to try and regulate as much as possible. And I could see, particularly in London, that unlike here, where we have a really strong operational centre, particularly in asset manager centers like London and New York, there's really less emphasis, and certainly less resources, put into the operational areas. And I could see with new regulation coming out, AIFMD, USITS, FATCA. I could see that these guys are going to have to beef up their operational areas substantially.

Shane Brett: So what we tried to do, going back to 2011, when I set up Global Perspectives, was really to try and I suppose, bridge that gap, to be able to advise managers, and also, administrators as well, about how to implement these new regulatory requirements. Not from a legal perspective, or, you see, a high level of consulting, but the actual, the...

Alan Meaney: The operational day-to-day.

Shane Brett: Yeah, exactly. The 2,000 odd view, not the 30,000 view-

Alan Meaney: How we want this happen.

Shane Brett: So really, but what new reported on had to go in place. What exact data feeds are going to have to be built? And also then, to advise them how to build a really good business on the back of it. That they could use this regulatory compliance as an actual asset to their business, and advise them what they will need to have, to offer as a service. Maybe, to be best in breed in five years time.

Shane Brett: So it's been a lot of, on the Global Perspective side, it's been great. It's mainly been European, some U.S. managers and administrators, but also, interestingly, as well, it's been a lot around technology companies, which I didn't expect at all. And that really has been as more, and more regulations has been requiring things like regulatory reporting, better capture of data, if you like, for both investors and regulators. Things like factor, for example, screening U.S. investors.

Shane Brett: There was a gap on the technology side, which loads of vendors, obviously, were trying to fill. And often, they were just worried that if they built something for their key cornerstone clients, it wouldn't be suitable for the wider market. So because we were independent and we were obviously working in the industry, they'd often ask for our advice about building out the product, and then managing that delivery, if you like, as well. That's been really interesting because technology was certainly not an area that I know anything about.

Alan Meaney: Yeah. You're knee deep in it now with Gecko, right?

Shane Brett: I am actually. Yeah, so that's interesting. So on the back of three or four years running the consultancy, which was great, I kind of, I suppose, experienced a bit of a challenge around trying to simultaneously be responsible for multiple different client engagements. So different things happening around Europe, or the U.S. for different clients.

Shane Brett: You might be doing a project, managing a project, helping build an IT product, you might be doing, say, some sort of regulatory analysis. And they would often be taking place in different countries and I would have different people on the ground helping me with them. So they might be the managers, but at the end of the day, when you're running your company, as you know, your neck is on the line to the client, right?

Alan Meaney: Yeah, exactly.

Shane Brett: So that the challenge I had, was trying to find a piece of software to manage all of those simultaneous engagements from one place. Loads of great project management software out there, but everything I tried to use, was on a project by project basis. And also, everything was very granular. So we'd have thousands of tasks. Whereas I, as a senior manager over sighting maybe half a dozen project managers, I wanted to be able to know the key milestones. "Please give me a dashboard. Show me what's green, and red and orange," kind of traffic light. "What's the percentage completeness? Are we making any money here on these engagements?"

Shane Brett: And I wanted that centralized in one easy to see view. Went to a lot of consultancies, particularly in London, and asked them, "What are you using for this problem? Because, you're managing a lot more engagements than I am." And a lot of people said they were using Excel. And I said, "Well, that's not scalable." So basically, sat down with a really good friend of mine. We were in school together and he's a great programmer. And I also went to Enterprise Arden's, and got incredible backing from those guys, and basically, built the first kind of version of Gecko, which we're calling a program management tool. And by that I mean, an easy way to manage a portfolio of projects.

Shane Brett: And yeah, so on the back of that, we basically were over in the US with Enterprise Arden's, as part of Access Silicon Valley, which their program for high tech startups in November. And we got to meet Google and demo to their senior management. We've just signed a partnership deal with Dell to help us with the support and a lot of the security, because it's kind of on the back of that, that we're getting the product into ground to warrant in here, as our first key pilot user.

Alan Meaney: That's great.

Shane Brett: Which is brilliant, because there again, these big consultancies have the same challenge as well. And I'm literally, right at the moment, we're just putting in our US patent, which is obviously very exciting. We should be patent pending in a couple of weeks.

Alan Meaney: Yeah. So busy, busy man.

Shane Brett: That's all ongoing. Absolutely. And we've just taken on a new investor, as well, to help us with the business development. And we've actually, the guy's from the Web Summit this week actually, who invited us over to their Hong Kong summit in July called Rise.

Alan Meaney: Excellent.

Shane Brett: ... which is brilliant. So that's happening as well. And we'll have to go back to Silicon Valley hopefully, later in the year, too.

Alan Meaney: Yeah. So the trend I'm seeing is, spotting a problem early, experiencing it and then solving it. Solving it for everyone else, right?

Shane Brett: Yeah. Exactly, exactly. Absolutely. Well, that's exactly it. The problem was tried. I didn't necessarily want to build it, I just want it to buy it. And I was like, it wasn't because I'm an incredibly creative person at all. It was because I just had a pain, and I needed some way to resolve it.

Alan Meaney: Yeah. Yeah. Make a value for others.

Shane Brett: Exactly.

Alan Meaney: That's great. So I guess, back to the fund stuff, since you first started in funds in Dublin, there's been a lot of change.

Shane Brett: Huge, man.

Alan Meaney: So pre-financial crisis.

Shane Brett: Yeah, absolutely.

Alan Meaney: I mean, you're here from the early days, right?

Shane Brett: Yeah.

Alan Meaney: Back in '98, was it?

Shane Brett: Yeah. February '98. Absolutely.

Alan Meaney: Really the Genesis of the IFSC and fund administration?

Shane Brett: Yeah.

Alan Meaney: So yeah, from your experience, I guess, and the other international cities you've been to, how do you see Dublin has changed in the past, well, 10, 15 years?

Shane Brett: Yeah. I mean, it's changed. It's changed hugely. Obviously because, if you look going back to the late '90s, when essentially, there wasn't really, you see, an alternative, so much business here. And on the fund side, it was a very specialized, or a very narrow, in terms of just fund administration on your kind of transfer agency, so that's nearly what everybody did.

Alan Meaney: Yeah.

Shane Brett: Also, when I would have started out, we were doing everything for our particular funds. So you're doing all the pricing, and you're looking at all the valuation stuff and all the corporate actions, so immense. I mean, the first year was pretty tough actually, because it was you were getting it, you were a very wide bread of knowledge and again, work with demanding clients. And obviously, a lot of the funds then as well, because they were more mutual funds or retail funds, you were doing daily evaluations, so you we're really on the hamster wheel.

Alan Meaney: Constant. Constant.

Shane Brett: And I mean, like even the first type of fund accounting systems I would have used, didn't have the windows GUI. They were back...

Alan Meaney: You were back in MSDOS.

Shane Brett: Under MSDOS ,I, literally. I mean, that's how long ago it is. You know?

Alan Meaney: Yeah.

Shane Brett: But I mean, the changes have been pretty astounding in that. I mean, Dublin here, has grown such a much wider breadth of experience, knowledge. Obviously, it has a specialization around hedge funds, which is, I mean, really internationally respected. And I mean, we can definitely grow on that hugely. But really, whereas having worked in some other cities, say Sydney, for example, where they do also have, what they call their superannuation funds. Again, its mutual funds. It's a less complex and diverse kind of industry over there. Here in Dublin, we're doing an awful lot more, particularly on the hedge fund side, whereas you never find that really.

Alan Meaney: Yeah. I'm seeing it like administrators are providing regulatory reporting-

Shane Brett: Yeah, absolutely.

Alan Meaney: ... risk analytics now is another big thing. It's just an expanding list of services that are being requested by managers, and administrators need to fill the gap.

Shane Brett: Absolutely. And going back to my point, around why I set up Global Perspectives, it was that I could see as well, is that the managers were going to have to depend on operations more heavily to make them compliant and to keep investors happy. Now, if they don't want to necessarily build up big operational capacity, the best person for them to do that with is obviously the administrator, as the official books and records.

Shane Brett: So definitely, I can see, and I think we're in a strong position here in relation to the growing importance of the administrator, or not only them, the depository, the custodian, those fund service providers, the importance is growing all the time to enable the manager to focus on risk and research, in terms of asset allocation on their returns, as well.

Alan Meaney: Yeah. Great. So I guess that leads us nicely into how do you see things evolving over the next five years?

Shane Brett: Oh, yeah, yeah, yeah.

Alan Meaney: ... with specifically related to Dublin? What new services could we be providing here? Could we be getting a new demographics of funds, new industries? What sort of stuff do you see happening?

Shane Brett: Yeah. Actually, well, you mentioned a couple of things already. Even as the market, or potentially, say fund any NAV calculation, might have maybe commoditized, if you like.

Alan Meaney: Yeah, definitely. Yeah.

Shane Brett: So I think it's been great the way people have really tried to move up the value chain. For stuff like the risk analytics, collateral management, more dynamic hedging options, which I will be... Something we're actually involved in talking about this week with a client of ours. The management company type aspect, as well. Regulatory reporting is a big and growing one. And I think we're well-placed to meet that. I mean, even you'll see more technology companies, no more than your own. But even foreign ones setting up offices here to service clients on the administrator side, who are serving their manager clients over there.

Alan Meaney: Sure.

Shane Brett: And traditionally they would have just stayed in London. They wouldn't have opened an office on the ground here. So that's a testament to the growing footprint of Dublin, if you like. Also, but in terms of where things are going to go. I mean, just take a step back as a kind of a wider picture globally. I mean, the economy, the global economy is definitely recovering and it is going to still be going through a volatile few years between now and 2020.

Shane Brett: But really, if you look at asset managements... And one of the reasons why I like this industry is because people will always need to save. They will always need pensions. In actual fact, because of the decline of defined benefit pensions, and also, this very, very remarkable low year of interest rates, people are looking for a return. And that low interest rate environments, even though they're going up in the US shortly, it's still going to be with us for the remainder of this decade.

Alan Meaney: Definitely, yeah.

Shane Brett: So that means that the flow of money, be it institutional, retail, it will continue to go into asset management. And because of that, it will be regulated more tightly, because of that, people will want to see more diverse fund structures. And again, here in Dublin, we were in a strong position then to be able to service that, as well.

Shane Brett: But also, something I think that's interesting here too, is that we're starting to see more managers actually set up here. I mean, a client of ours ML Capital recently moved from London and Malta back to Dublin. If you look at the list of regulators and approved alternative investment managers with the central bank, since, AIFMD has come in, you'll see more and more managers actually setting up here.

Alan Meaney: Yeah, definitely.

Shane Brett: I was at the launch of a new Italian manager up in Harcourt Street only a couple of weeks ago. So I think Dublin has a potential to look at broadening its asset management base, as well.

Alan Meaney: Yeah, definitely.

Shane Brett: I mean, if the UK ends up committing economic suicide and leaving the European Union, if I was an asset manager sitting in London, you'd have to think seriously about the only other English speaking jurisdiction with the same legal system in Europe.

Alan Meaney: Yeah. It's one of those ones where, is it a good thing or a bad thing for us? Right?

Shane Brett: Yeah.

Alan Meaney: So if it happens, it creates loads of opportunity.

Shane Brett: Yeah, yeah.

Alan Meaney: All these middle office functions, front office functions-

Shane Brett: Absolutely.

Alan Meaney: ... that could then transition to Dublin.

Shane Brett: Exactly.

Alan Meaney: Can we get them organically anyway, if England stay in Europe? Perhaps.

Shane Brett: Yeah, you just don't know. I mean, it's funny. When Malta, I remember, joined the Eurozone only a couple of years back, I remember thinking, "Well, this is another potentially English speaking country in the Eurozone." Obviously, we're the only one. And in actual fact, it hasn't really taken away from Dublin's growth as a fund center. If anything, it's kind of complimented it.

Alan Meaney: I think that critical mass is already here. So I think-

Shane Brett: Yes, yes.

Alan Meaney: ... it's a bit like, I suppose, the tech companies here, that critical mass sucks in everyone else.

Shane Brett: It does. Exactly.

Alan Meaney: So if we can get to that volume that we have for ten funds being administrator of Ireland in the hedge fund space, that knowledge base doesn't just easily get replicated. That's right.

Shane Brett: No. Exactly. It takes time. Exactly. And I think that's the way I think it's great that even the governments and the Enterprise Ireland are focusing a bit more on FinTech. I know it's a very-

Alan Meaney: It's a buzzword.

Shane Brett: It's a buzzword, but at the same time, it does make sense here. If you have nine of your top 10 largest tech companies within 10 minute walk of where we are here, and you also have nine of the 10 largest financial companies within 15 minutes walk, it makes sense that as software eats the world, as they say, that we look at ways to kind of integrate that. And certainly, I mean, I was involved in MDRC's... I was a mentor for their FinTech pre-accelerator program. And it was really interesting to see the ideas coming out of that. And certainly-

Alan Meaney: It would be fantastic to see more and more.

Shane Brett: Yeah, yeah, yeah.

Alan Meaney: I mean, all that knowledge we have here in Dublin, surely people are just itching to start their own thing?

Shane Brett: I definitely see more and more of it. And one thing I've really liked about moving into the technology space a little bit, is that people are so incredibly... willing to help each other. For a nation that had a reputation for begrudgery, God, I haven't seen that on the... Like in the startup business, people will come and meet you for coffee, give you advice. I've been assigned to that. The people I've been able to meet at senior levels here and in the US.

Alan Meaney: Oh, it's very open. I mean, we see it on our side, as well. We can get meetings with people. They're very open to it, and supportive, as well, which is great.

Shane Brett: I mean, I would have done that in London, on the back of Global Perspectives too, but that was coming... In the city, it wouldn't be as easy to get, you know. People want to see if you've written articles, maybe a couple of books, so then they know they're meeting someone credible. Whereas, one thing I love about technology, if you have an idea, people are just, if it sounds like it's interesting-

Alan Meaney: Yeah. Well, it's technology is solving problems.

Shane Brett: Exactly.

Alan Meaney: Everyone's interested in someone who can solve their problem.

Shane Brett: Yeah. Take their pain away.

Alan Meaney: Yeah.

Shane Brett: Yeah. So I mean, I suppose a kind of a summary in terms of Dublin, I think we're in a very strong place long-term.

Alan Meaney: Yeah.

Shane Brett: I mean, as long as we have a responsive regulator, which we do, the industry that's works well together, which I think the IFIA does a great job, and I think, and I suppose focused on our strengths, which to me, would be obviously operations as a kind of a core. But I do think when you see companies like Credit Suisse, potentially looking at more of their front office roles here, even on the banking side, that there is an opportunity...

Alan Meaney: Has huge, huge potential for...

Shane Brett: Huge, huge. Yeah, exactly. So yeah, they're the kind of areas I see it in the future-

Alan Meaney: Great.

Shane Brett: ... all of these other, what do you call, peripheral type of services which administrators can offer, which are going to grow drive growth and revenue long term. Hopefully, employability as well.

Alan Meaney: Great. Well, that was a very informative chat.

Shane Brett: Cheers. Great. Pleasure.

Alan Meaney: Thanks very much, Shane-

Shane Brett: Thanks very much.

Alan Meaney: ... and stay tuned for episode two of Dublin Fund Talks. Cheers, Shane.

Shane Brett: Cheers.