Watchdog role puts Apex on top through turbulent times
The lack of regulation and oversight that led to the financial crisis has helped propel fund services firm into its current position
John Bohan: “There have been so many pyramid schemes for investment. There hasn’t been proper regulation in some cases or oversight. A fund administration company provides that oversight.” Photograph: Cyril Byrne
Ireland is known for a lot of things – Guinness, leprechauns, the Celtic Tiger – but in financial circles hedge funds are the words on everyone’s lips. Apart from a slight fall in 2009, the Irish funds industry has grown year on year for the past 25 years, and today Ireland is the number one hedge fund administration centre in the world, servicing more than 40 per cent of all global alternative investment funds.
At the centre of this industry lies Apex Fund Services. In the 10 years since its inception, it has become one of the world’s largest independently-owned fund administration companies, with approximately $25 billion in assets under administration and 32 offices across the globe.
“We started on a shoestring budget in a 4ft by 6ft office. We got all our furniture second hand but didn’t have the money for technology. Any time we needed to value a portfolio, we had to walk down to the local HSBC and use their Bloomberg machine,” Bohan says.
Bohan had moved to Bermuda in 2001 to work for small company in fund administration. He quickly discovered the country was like a mini-Ireland.
“The country has a population of 66,000 and 3,000 to 4,000 of that are Irish. We started the first Gaelic football team in Bermuda. There are six GAA teams now.”
The company opened its second office Dubai in 2006, becoming the first administration services company to be authorised by the Dubai Financial Services Authority, and established a European headquarters in Cork in 2007.
“I came back to Ireland eight months before the Lehman crash and chose to set up in Cork as the costs of setting up a business in Dublin at that time were huge. Property and real estate prices were at their peak and there was massive competition for staff.
“I couldn’t believe what I had to offer to get staff. They all wanted company cars and great gym memberships or they wouldn’t work for us.”
The following year – 2008 – was perhaps the most difficult for Bohan and Apex, with the global financial crisis beginning to show its effects. In September 2008, in the face of impending collapse of the domestic banking sector, the Irish government gave a blanket guarantee not only to depositors but to all bondholders of the country’s six main banks.
That same month Lehman Brothers filed for bankruptcy following drastic losses in its stock, a mass exodus of clients and devaluation of its assets by credit rating agencies.
“Lehman had a massive impact on the flow of business. In the six months prior, business was huge. In the 12 months after, we had negative growth. We had just signed a lease for an office building in Dublin and hired lots of staff.
“We had had five years of boom times. When 2008 hit, we had 13 offices open. We had done incredibly well in a short space of time. We suddenly had huge exposure and it was all personal exposure.