Sheila Dean - The Interview, by Nick Kirby, Editor-in-Chief of BL magazine

Monday 25 January 2016

Sheila Dean, Global CEO of Equiom Group, has overseen Equiom's rapid expansion in recent years. Nick Kirby of BL magazine asks: what has Sheila learned from the experience and are the crown dependencies at all alike?

You have one minute to tell us about Equiom – and the clock starts now…

Equiom is a multi-jurisdictional trust and corporate service provider, focused on delivering bespoke ownership structures and professional tax advice for a broad range of companies and clients, including ultra-high-net-worth individuals, across a variety of specialist markets.

Our history is something we’re very proud of. We were part of the Ernst & Young Trust Company up until 2002, when we were sold to Anglo Irish Bank. We became an independent company in 2006, having completed a management buyout, and we completed our secondary management buyout in 2013.

Since 2011, we’ve completed 10 acquisitions, which has led to us opening offices in Jersey, Guernsey, Malta and Hong Kong.

We currently have 327 employees working  across our five offices in Europe and Asia. Our total assets under management are in excess of US$23bn.

I believe you’ve effectively been with the company since the start of your career?

Pretty much. I started working for Ernst & Young straight after graduating. Along the way, I qualified as an accountant and when E&Y was acquired  by Anglo Irish, I stayed with the company. When Anglo Irish decided to sell the trust arm of the business, I led the management buyout and Equiom was born. So this really has been my entire career.

Jersey and Guernsey are often lumped together, whereas the Isle of Man sits well outside, despite being a crown dependency, and seems to plough its own furrow. Is that a good or a bad thing?

The Isle of Man is bound to be viewed differently to the Channel Islands to a certain extent. It has a very different government system and there are differences in the taxation and business rules across the islands too. Also, to state the obvious, we’re geographically quite a distance away – we certainly don’t benefit from the same climate!

VAT is probably the main thing that differentiates the Isle of Man from Jersey and Guernsey. In the Isle of Man, VAT is charged and legislated almost exactly the same as it is in the UK. This is because the island has a VAT revenue-sharing agreement with the UK, so it’s considered part of the common VAT area of the European Union, giving it full access to the EU for importation and EU trade. The Channel Islands, on the other hand, are only part of the EU in terms of customs, which can cause limitations with the importation of goods.

That said, there are some massive similarities between the islands. They are all crown dependencies; corporate income tax rates are all zero per cent; and all three islands now have a financial ombudsman. None of the islands operates capital gains tax, and there’s no denying they have all been affected by the recession.

All the islands benefit from the flexibility enabled by their independent governments. This independence from the UK has allowed them to proactively introduce changes to their regulatory and legal systems to embrace, for example, the Foreign Account Tax Compliance Act (FATCA) and Tax Information Exchange Agreements with a host of countries.

As a business. we’ve built very strong relationships with the Isle of Man government over the years, having worked closely on joint initiatives. We’d like to replicate this with Jersey’s and Guernsey’s governments.

Is being private equity-backed – through Lloyds Development Capital (LDC) – a help or hindrance? Can PE be too short-term focused?

We wouldn’t be in the successful position we are in without the backing of a private equity company. We’ve worked  with our current PE company, LDC, for a number of years.

The LDC strapline is ‘Private Equity less ordinary.’ This is without a doubt our experience of them. Yann Souillard (Managing Director) and his team at LDC have exceeded our expectations – their support has been all-embracing. With such a broad portfolio of businesses under management, they have a network of solutions at their fingertips, all of which we can dial into and use to support Equiom.

LDC’s management style is very much relationship driven, and this philosophy of putting relationships first is mirrored at Equiom. As we have grown, our relationship with LDC has strengthened. The team at LDC has been incredibly supportive throughout and they’ve delivered on everything they promised – and more. When professional firms work in conjunction with private equity, it’s important for clients to know that neither the service nor the cost is going to be adversely affected. We’re proud to have delivered a seamless service to our clients through the initial and secondary buyouts, without the loss of any clients as a direct result.

There’s been a significant amount of M&A activity in the financial services sector in recent years – what is your take on that and do you see it continuing?

M&A activity is indeed flourishing  again in financial services, which is strong evidence of renewed economic confidence globally.

A substantial contributor to this, in our sector in particular, has been the increase in regulatory and compliance requirements within the industry. This has made it very difficult for the smaller trust companies to continue to operate because they just don’t have the resources to cope with the additional administrative and regulatory requirements.

In order to continue, they need to become part of larger companies, with large established compliance, legal and operational risk teams, and the systems and processes in place to ensure adherence to regulations.

In addition to this, banks are streamlining their operations to reduce costs while at the same time reducing their exposure to risk. This has resulted in a number of banks selling off their trust businesses, which have become acquisition targets for the larger trust companies.

As regulation within the industry continues to tighten up, I don’t anticipate that this M&A activity will slow down. Equiom is particularly active on the acquisition front and we do see this continuing over the coming years.

Your expansion has been quite ‘aggressive’ in recent years – tell us about that.

The business has grown from 80 staff in the Isle of Man in 2012 to 327 staff across five jurisdictions. Seven acquisitions have taken place since the secondary management buyout in September 2013, five of which took place in the six months up to May 2015.

Our strategy is focused on creating a business of scale and substance in both Europe and Asia. This is best achieved by concentrating on establishing and developing successful businesses in a small number of jurisdictions. The purpose of our strategy is to provide increased opportunities for our clients and staff. Having a number of offices allows us to offer a wider range of solutions to our clients, and to tailor services to their specific needs.

Does growing quickly put pressure on the business – from client service and compliance perspectives, for instance? And how difficult is it to meet those challenges?

Yes, it inevitably does put pressure on. The five acquisitions we completed in the past year certainly tested everything we’ve got to give!

Acquisitions  particularly affect the central Group support functions, such as compliance, finance, corporate communications and IT. However, all areas of the business are impacted, particularly by all the travelling that myself and the senior team do in the lead-up to an acquisition in order to form integration plans and build relationships with our new colleagues.

Our priority throughout the acquisition process is to ensure that everything happens as seamlessly as possible for our clients. It’s also critical to establish 'buy-in’ from the staff throughout the Group. I always make sure that we regularly communicate internally throughout the acquisition process to ensure that all staff are aware of the progress we are making. All Equiom staff are familiar with the acquisition process and are well accustomed to the continually evolving and fast-paced world that we work in.

Our IT and communications infrastructure has particularly been tested in recent months. The IT team works exceptionally hard to ensure that our systems, data and communications networks are integrated effectively. We’ve recently invested heavily to increase the level of support within our IT, Integration and Change functions, including upgrades to our core IT infrastructure and employing additional staff.

Even after an acquisition has completed from a technical point of view, the work continues to ensure that the acquired business and the employees are integrated into Equiom from a cultural perspective.

We have a ‘buddy’ system, where we pair up any new employee with a current  team member at their equivalent level – sometimes in other jurisdictions – to ensure that they are made to feel part of the wider Group and to give them a point of contact for any questions. Training  is also an essential part of the process.

The Compliance team has an important part to play in acquisitions – from overseeing the due diligence prior to the completion of the acquisition, to playing a role in the integration and harmonisation projects post-acquisition and communicating with the relevant regulatory authority.

So, in summary, yes – growing quickly does put pressure on the business, although we plan these projects well, resource accordingly and most of the time, things go smoothly.

A number of fiduciary companies have either made acquisitions or opened offices in the Far East in recent years – Equiom bought AFP Group  in Hong Kong at the start of 2015. Why? And what is the strategy?

We’ve always viewed Asia as a key market as part of the company’s ambitious growth plans but, as with all of our acquisitions, we had to find the right business, with the right people, to blend with the overall culture that we promote throughout the company.

With AFP Global, we knew that Roddy Sage (Executive Chairman of Equiom Hong Kong) and his team would bring that ‘can do’ culture that Equiom has, as well as the huge experience that we needed with our first Asian acquisition.

The strategy in Asia mirrors the strategy for the rest of the Group, in that we continue  to follow the twin-track method of acquisitional and organic growth, within clearly identified markets.

At BL, we often hear about the lack of suitable skilled staff in small jurisdictions such as the crown dependencies. What’s your take on this? And, indeed, how should it be dealt with?

It’s a problem that needs to be addressed – particularly in the Channel Islands, where strict employment and housing restrictions are in place to limit the size of the population. If these rules aren’t going to be relaxed, the islands need to focus more on education and training locally to attract young people to return beyond graduation and make the islands less dependent on immigration.

At Equiom, we wholeheartedly support training, exams and external courses – it’s important that our staff are qualified and continually develop in the area of the business in which they work.

We’ve also trialled a new programme where we employ school leavers as Assistant Administrators within the Client Services team, providing ‘roots up’ experience. They’ve also been given the opportunity to sit exams, which will help with their professional development and career progression.

Where do you stand on the subject of the lack of senior women in business? Is too much attention given to it? Is there a danger of promoting women purely based on gender as opposed to merit?

Yes, it’s something that’s talked about  a great deal, but, if I’m absolutely honest, this ‘issue’ has never really been apparent to me. Many of the businesses I deal with employ women in senior positions. Likewise, there are several women occupying board positions at Equiom.

Personally, I don’t think my gender has ever had an impact on my career and it certainly hasn’t held me back. I’d like to think that I’ve achieved what I have because of my skills and experience, rather than my gender, and I’ve never had any negative (or otherwise) experiences as a result of being female.

This interview appeared on pages 16-20 of the January/ February 2016 issue of BL magazine.

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