BNP’s portal to new markets

Sébastien Lecaudey is the man at the helm of BNP Paribas Securities Services, Luxembourg. A true European, he is well placed to implement the company’s proclaimed goal to “become the premier securities services provider in Europe”. The firm, which is most strongly established in Luxembourg, Italy and its home country France, is now focusing attempts to grow the business in Europe most intensively in Germany and the UK.

The latest client added to the BNP Paribas list was The Money Portal, one of the largest distributors of financial services to consumers in the UK, with assets under management of £1.5bn (?2.2bn).

BNP Paribas Securities Services was chosen by TMP to provide a platform for a new funds distribution offer aimed at retail investors.

The proposition, currently at the development stage, will enable the independent financial advice firm to distribute and administer client assets using its platform.

As head of global fund services, Luxembourg, Mr Lecaudey’s role in is to oversee a team of six, which works on product development. “Our mission is to develop new products and manage the existing ones, ensuring they meet customer’s needs and remain profitable for us,” he says.

His team forms part of the larger company division dedicated to products. It was formed following a reshuffle of the BNP Paribas Securities Services corporate structure last year into the three divisions: Products, Coverage and Operations.

The Product division creates and runs four main services: global equity services, global corporate trust services, global fund services and lastly clearing, settlement and custody. Mr Lecaudey leads the latter two products.

The Coverage division sells the products to clients, while the Operations division runs banking operations and fund services, including fund administration, middle office and transfer agency. All three divisions are represented in Luxembourg, where the firm bases 460 staff and claims to be the fourth largest administrator in terms of asset volumes.

“We aim to sell a bundled product of global custody, fund administration and transfer agency as much as possible,” says Mr Lecaudey. On top of this the firm aims to offer clients value-added services. “More and more, clients want to deal with one entity, a one stop shop. The drivers of this are costs, efficiency and decreasing operational risk,” he says.

The jewel in the BNP Paribas crown, which helps it sell the bundled service, says Mr Lecaudey, is its performance measurement tool. “We have hired engineers, mathematicians and statisticians from the fund management industry to develop a unique proprietary system. It is available online, fully integrated into our fund administration system and can go into the lowest level of detail.”

For private banking clients in particular BNP Paribas’s proposition is to take the operational side of fund management off their hands. “They are often working as fund managers, so we offer to manage fund administration, transfer agency and custody for their funds. Most have a lot of funds of hedge funds, which are complex to deal with. With our product all they have to do is send us an order electronically or by fax and then we deal with all the hedge funds. This is all fully integrated into our trailer fee calculation tool. “

BNP Paribas also helps private banks ascertain a clearer idea of their holdings in hedge funds, a notoriously grey area. While hedge funds tend to supply an official net asset value only monthly, BNP Paribas contacts hedge funds in order to calculate a weekly estimate for its clients. NAVs for traditional funds are daily.

Going forward, Mr Lecaudey says that no major changes are planned for the existing product. “Our platform is up to date and has been built with scalable technology,” he says.

One lingering problem is that a number of transfer agents remain non-compatible with Swift, the messaging system used by BNP Paribas and the majority of industry participants. But Mr Lecaudey is optimistic that this will improve, bringing benefits for both his company and the industry as a whole. “The more TAs that use Swift the better” he says.

CV: Sébastien Lecaudey

Education: BA from Manchester University, in European Economics and Finance, MA from Reims University, Brittany, France.

1997: Joined BNP Paribas on training programme for young executives as an account officer. Moved to Frankfurt to work for two years on creation of Depot Bank product for Germany.

2002: Took over control of both product and operations for Depot Bank and worked on Depot Bank product for France.

2004: Moved to Luxembourg to take over global fund services and global custody product and become member of board of BNP Paribas Securities Services, Luxembourg.

Lecaudey: platform is up to date