Vendor Analysis
published on Mar 17, 2016
Report Overview:
This NelsonHall assessment analyzes Capita’s offerings and capabilities in wealth and asset management services. Capita is one of a number of wealth and asset management services companies analyzed in NelsonHall’s comprehensive industry analysis programs.
Who is this Report for:
NelsonHall’s Wealth and Asset Management BPS Vendor Assessment for Capita is a comprehensive assessment of Capita’s wealth and asset management BPS offerings and capabilities designed for:
- Sourcing managers monitoring the capabilities of existing suppliers of capital market process outsourcing and identifying vendor suitability for Wealth and Asset Management BPS RFPs
- Vendor marketing, sales and business managers looking to benchmark themselves against their peers
- Financial analysts and investors specializing in the support services sector.
Scope of this Report:
The report provides a comprehensive and objective analysis of Capita’s wealth and asset management BPS offerings, capabilities, and market and financial strength, including:
- Identification of the company’s strategy, emphases and new developments
- Analysis of the company’s strengths, weaknesses and outlook
- Revenue estimates
- Analysis of the profile of the company’s customer base including the company’s targeting strategy and examples of current contracts
- Analysis of the company’s offerings and key service components
- Analysis of the company’s delivery organization including the location of delivery locations
Key Findings & Highlights:
Capita fund solutions (asset management BPS services for the funds industry) is part of Capita’s Asset Services division. Capita entered the W&A BPS business in 2002 with the acquisition of City Financial, which operated two businesses:
- City Financial Administration: back-office services for investment boutiques
- City Financial Managers: a marketing arm that offered unit trusts and open-ended investment companies.
Over time, Capita has grown the business by:
- Expanding the range of processes delivered (see Key Offerings section)
- Expanding its target client base from smaller fund managers to medium and large fund managers.
Capita delivers services from five delivery centers, to support clients around the globe:
- Leeds
- London
- Exeter
- Dublin, Ireland
- Luxembourg.
Capita delivers some work for W&A BPS from Mumbai, but is in the process of closing that center and moving the manual work (which Mumbai was delivering) to a third party service provider.
Capita’s primary targets for W&A BPS are wealth managers headquartered in the U.K., Ireland, Jersey, and Luxembourg. Capita targets all tiers of wealth managers. It intends to expand its client targeting to a pan-Europe geographic region, but does not intend to expand beyond Europe, for W&A BPS services.
In W&A BPS, Capita has focused on the U.K. market, and is now expanding its W&A target market to include Luxembourg, and eventually all of Europe. It has focused on a narrow range of services including:
- Fiduciary oversight services to funds: Capita provides a corporate director and associated regulatory compliance services
- Fund administration services: fund accounting and administration.
Capita’s approval by the FCA to act as a fiduciary is a key differentiator in W&A BPS, for the U.K. marketplace.
Capita uses only its own platforms and delivery capabilities to deliver services. However, it does partner with other vendors and clients, for services outside its core focus area. Capita’s decision to use only its own platforms provides it with operating leverage separate from labor arbitrage, and this technology leverage gives it high operating returns from the W&A BPS business. Without its technology leverage, the business would be low return (fund accounting) and/or high risk (fiduciary oversight).
Capita began its W&A BPS business focusing only on smaller fund managers, but has steadily expanded its target market to include the entire range of fund managers in the U.K. It is now expanding its geographic target to all of Europe, which should consume its expansion resources for the next five to ten years.