CACEIS

SFF Magazine June 2024

In this article, Alvaro Laorden, Global Head of CACEIS Group’s Market Solutions Sales, details the international expansion strategy of Crédit Agricole and Santander’s joint-owned asset servicing banking group. He also focuses on how its growing scope is driving broader securities finance coverage across new financial centres, and bringing key solutions to a wider clientele of asset owners.

Since CACEIS’ formation in 2005, resulting from the merger of two large French banks’ asset servicing divisions, the group’s expansion strategy has been built on seizing partnership deals and acquisition opportunities in combination with a sustained organic growth trajectory. CACEIS has played a major part in the European asset servicing consolidation trend, and today operates in 18 markets around the world, providing custody for some €5 trillion in client assets and administering in excess of €3.4 trillion.

CACEIS’ most recent and perhaps most transformative acquisition was the July 2023 purchase of RBC Investor Services’ activities in Europe, which added a major book of business to its operations and is scheduled for completion by the end of the year. The acquisition not only expands the group’s geographic footprint in Europe but also included an operations centre in Malaysia with over 1,200 staff.

“CACEIS’ most recent and perhaps most transformative acquisition was the July 2023 purchase of RBC Investor Services’ activities in Europe, which added a major book of business to its operations and is scheduled for completion by the end of the year.”

Back in 2019, CACEIS acquired KAS Bank, a Dutch custodian and pension servicing group and earlier that year, the group combined with Santander Securities Services (S3), the custody and asset servicing division of Santander, broadening its coverage in Spain and taking the group into Latin America, with fully-functioning entities in Brazil, Columbia and Mexico. CACEIS believes that consolidation in the asset servicing industry will continue and is keen to remain a key consolidator in Europe and abroad.

CACEIS group provides a full range of securities services to a varied international clientele including asset managers, insurance companies, pension funds, banks, private equity and real estate funds, brokers and corporate clients. While the backbone of the group’s offer remains client-focused asset custody, depositary and administration services, it promotes a vast range of additional solutions for clients through its network of offices across Europe, North and South America, and Asia.

While the CACEIS group is focused on increasing the scale and scope of its asset servicing operations, the Market Solutions division benefits downstream of this through access to a broader pool of international asset owners for its securities lending programmes and new markets for its securities financing operations.

Market Solutions Focus

CACEIS’ Markets Solutions division offers modular client-focused services and a secure gateway to the financial markets. It covers execution, through risk management and middle-office services, all the way to custody – an ‘execution-to-custody’ model, which is a unique in the market. The staff provide solutions for every aspect of over 1000 clients’ market needs, including all post-trade tasks. These clients benefit from a high level of transparency, enabling them to closely monitor delegated activities across the full range of execution, clearing, forex, and securities finance services.

Execution

The execution team enables clients to place orders on over 100 markets dealing in stocks, ETFs, bonds, futures and options, and on any underlying asset type, from rates, securities and indices, to raw materials and forex. All transactions are fully integrated with our custody platforms to boost clients’ operational efficiency and transparency.

Clearing

The fully-integrated global clearing offer plays a key role in streamlining clients’ post-trade workflows and optimising associated costs, covering clearing, settlement, valuation, confirmation and custody. CACEIS is a general clearing member on Eurex, LCH, ICE and other clearing houses, offering clearing coverage for some 97% of the volumes handled. CACEIS takes care of external capital flows and can pledge a wide range of collateral, including government bonds, corporate bonds and equities by leveraging our unique risk profile and a collateral segregation policy to secure the transactions.

Foreign Exchange

The Luxembourg-based Forex desk offers many client-oriented solutions for investment managers, and their middle- and back-office teams. Combining competitive pricing with a principal model, trading on all convertible currencies with extended cut-offs, and hedging via NDF and NDS on non-convertible currencies, allows us to meet most managers’ Forex needs. And on the back & middle office side, our full STP processes cover the entire flow, from negotiation to accounting, enabling clients to raise efficiency and benefit from an audit trail that ensures price traceability.

In addition, our solutions help clients to reduce fixed costs, as forex desk transactions are free of settlement, or any other additional fees. The desk covers Spot, Forward, Swap, NDF or option trades on any of the wide range of products and currencies. Clients also benefit from an Online Forex Trading platform which is available through FX-All, Bloomberg and 360T.

“CACEIS takes care of external capital flows and can pledge a wide range of collateral, including government bonds, corporate bonds and equities by leveraging our unique risk profile and a collateral segregation policy to secure the transactions.”

Securities Finance

The Securities finance desk provides solutions designed to help clients optimise portfolio returns or create necessary liquidity. Its staff has in-depth experience in setting up repo agreements, asset switches, and bespoke collateralised financing solutions, such as fund shares financing, to boost performance or create liquidity. Working on an agency, principal or remote basis, the desk lends idle securities to a select pool of counterparties in exchange for high quality collateral, and generates secure additional revenues for portfolios. The securities finance desk’s client-oriented solutions ensure safety and transparency of the activities, especially due to the automatic integration of operations data with post-trade custody services. With global market coverage, multi-asset capabilities and full custody service integration, the desk offers a high level of transparency combined with a strong recall process that even be automated for General Meetings.

The CACEIS group combines the expertise and efficiency of world-class trading operation with integrated services and financial stability of large, multinational asset servicing group. We believe we are on the right track to achieve our ambition of becoming the European leader in asset servicing by 2030 and are determined that our group will play a growing role in global asset servicing industry as we pursue our business development strategy.