Appleby management in buyout of fiduciary business

Offshore law firm Appleby has announced the management buyout of its fiduciary business backed by private equity firm Bridgepoint. 

The deal, for an undisclosed sum, will result in the spin-off of the firm’s trust and corporate services business into a separate business that will be rebranded. 

The deal will affect about 250 staff. 

Farah Ballands, the global head of the group’s fiduciary business, will become chief executive of the new entity. 

“The Appleby Group has provided us with a solid foundation and enabled us to grow to the size, reach and scale that we enjoy today, but now is the right time to accelerate our growth plans,” Ms. Ballands said. 

“This is a really exciting step for our business, and the management team is delighted that we will be partnering with Bridgepoint. With Bridgepoint’s support and expertise in growing businesses successfully, we will be able to develop a greater range of products and services for our clients,” she added. 

Appleby’s trust and corporate services business administers more than 10,000 structures for just less than 6,000 clients from nine locations. The business has three core service lines: corporate administration, trust administration and fund services. 

In corporate administration, clients range from large multinational corporations to individual holding companies and special purpose vehicles established for holding investments such as real estate.  

Trust administration involves the creation of trust structures as well as the day-to-day services, such as acting as trustee, record-keeping and assisting with succession planning. Clients include high net worth individuals, corporations and financial institutions.  

In fund services, the business advises and assists in the launch and incorporation of funds. This can include fund accounting, valuations, secretarial services, and regulatory and compliance services. 

William Paul, partner and head of Bridgepoint’s financial services team, said Appleby’s trust and fiduciary business “is an exciting platform” with a reputation for high quality.  

“It brings significant opportunity as a standalone business to accelerate its growth organically and via acquisition, in what remains a strongly growing market,” Mr. Paul said. 

Bridgepoint believes that the global market for trust, corporate and fund services will expand at about 7 percent per year, as a result of private wealth growth, increasing regulation and larger foreign direct investment and trade flows.  

Bridgepoint said the key attractions of the Appleby’s trust and fiduciary business include its favorable historic earnings growth, strong new business flows, the opportunity for expansion through selective acquisitions in a fragmented market, as well as its leading positions in growing, niche areas such as employee benefit trusts in Jersey, the insurance market in Bermuda and collateralized loan obligations in the Cayman Islands. 

Completion of the transaction is subject to certain conditions, including regulatory and legal approvals. 

This investment was made by Bridgepoint’s 4 billion euro (US$4.4 billion) Bridgepoint Europe V buyout fund. Bank of Ireland, ING, Societe Generale and Unicredit are lenders in the transaction. 

Appleby’s Group Managing Partner Michael O’Connell, who will continue to lead the law firm post-completion, said the deal was an exciting development for Appleby. “The transaction will enable two strong businesses to grow and prosper independently, whilst remaining close where it suits the needs of clients,” he said. 

Appleby Chairman Frances Woo added, “Being able to respond to client needs by investing in the development of products and services for each business is a key part of our thinking here, coupled with providing essential continuity of service. With the existing management team taking the helm of the new fiduciary company this will ensure that existing clients feel it is very much business as usual.” 

Ms. Woo told industry publication The Lawyer that the group had been regularly approached by potential buyers of the business. Given the consolidation of the fiduciary and administration business, it would have become more difficult to grow the business for Appleby, she said. 

The deal with Bridgepoint followed a bidding process. 

Both Bridgepoint and the management shareholders intend to reinvest capital resources into the services of the new business.  

The new company will remain in Appleby’s existing offices for the time being. 

In 2014, law firm Ogier completed a similar management buyout by spinning off its fiduciary business into a new company called Elian. 

In 2012, Walkers sold its fiduciary business, with about 100 staff in six countries and annual revenues in excess of $50 million, to Intertrust, but in May the law firm announced it would relaunch its professional services business. 

The Appleby office in George Town. – PHOTO: TANEOS RAMSAY