JTC acquires New York based Essential Fund Services
LONDON, UK: JTC Plc, the global professional services business, announced the acquisition of New York based Essential Fund Services (EFS).
Essential Fund Services (EFS) was co-founded in 2009 by the present Managing Member and sole owner, Gerard M. Federici, who is a highly respected financial services professional with over 25 years’ industry experience.
Essential Fund Services (EFS) offers a broad range of services in the alternative assets space, including accounting, reporting and administrative services to investment partnerships and their investment managers. The consideration will be settled via cash and JTC equity.
Gerard Federici will continue to lead the business and all current EFS employees will join JTC, becoming part of the Group’s Institutional Client Services (ICS) Division. The transaction is not subject to any regulatory approvals and completes with immediate effect.
The acquisition of EFS is extremely complementary to JTC’s recent acquisition of SALI Fund Services. EFS is one of the leading independent providers of fund accounting services to the Insurance Dedicated Fund (IDF) market, where SALI is the established market leader.
Significant strategic benefits are anticipated for both businesses as they become part of the same Group, with the transaction enabling greater collaboration between the firms and a more integrated offering for IDF clients more generally.
More broadly, EFS will enhance JTC’s fund services presence in the US, providing additional scale and growth opportunities that complement the Company’s expanding US footprint. EFS currently provides services to 45 clients across 110 investment partnerships and has approximately $5.5bn of Assets under Administration (“AuA”).
The wider client book, which is primarily located in the Greater New York Region, provides further diversity to JTC’s ICS client base in the US and over time, these clients will have the opportunity to benefit from the Group’s global capabilities and offering.
The US is an important growth market for fund services, including alternative asset classes. The prevalence of outsourcing for fund services is lower than levels seen in Europe, offering opportunities for strong growth. EFS, with its reputation for exceptional levels of client service, is well positioned to capture new business with the backing of JTC’s global platform and capabilities.
In the financial year ending 31 December 2020, EFS delivered revenue of c. $1.7m with an EBITDA margin in line with JTC’s medium term guidance of 33% – 38%. The business has grown consistently over time and there are tangible opportunities to accelerate the growth trajectory by capturing a greater share of the IDF fund accounting market and through leveraging JTC’s network and capabilities, both in the US and internationally.
Nigel Le Quesne, CEO of JTC, said: “The acquisition of EFS is another high quality addition to our strategically important and fast-growing US business. Gerard and his team have a demonstrable track record of delivering the highest levels of client service and the existing relationship with SALI Fund Services will help to enable further growth for both businesses as part of the Group. We are excited about the future for EFS and extend a warm to welcome Gerard, his team and all of the business’ clients and partners.”
Gerard M. Federici, Managing Member of EFS, said: “I am delighted that EFS has the opportunity to become part of the JTC Group and play a role in its ambitious plans for the US fund services market. We share the same belief in the importance of exceptional client service and through our established relationship with SALI Fund Services, we will very much hit the ground running and look forward to accelerating our growth story.”
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