A Q&A with Oak Group (IOM) Ltd

John Hunter, Head of Banking & Fiduciaries for Finance Isle of Man, met with Tanya O'Carroll, Managing Director of Oak Group (Isle of Man) Limited, to discuss her career to date, her experiences in the trust industry and her time on the Isle of Man.

Tell us about your career to date?

I’m the managing director of Oak in the Isle of Man with overall responsibility for delivering high quality client services while balancing the strategic financial and operational requirements of the business in the island.

I’ve been working in the trust industry for more than 20 years. I joined the Oak Group (formerly Kreston IOM Limited) from Kleinwort Benson where I headed up the Isle of Man fiduciary and custodial offering. Prior to this I spent a nearly a decade working with one of the largest fiduciary service providers on the Isle of Man, during which time I spent 18 months seconded to the USA to establish a non-depository trust company.

How did you find yourself working in the trust industry in the island?

Having completed a BSc in Chemistry at University College Dublin I came to the Isle of Man originally only for the summer but was then offered a role as research scientist which led to various roles with a large multinational manufacturing company established in the south of the island.

After 10 years it was time for a career change and I started to explore the possibility of moving into the finance industry which was growing significantly at the time. What I discovered is that my scientific background lends itself to the finance industry. Each day is different, I enjoy the complexity and variety that the finance industry offers. My mantra is look at all options to find a solution, to question is key; I never feel embarrassed asking a question, if I don’t understand I ask.

Every day is a learning experience and the finance industry has allowed me to learn at every opportunity whether it be compliance, legal, corporate finance or family office solutions. Each client is individual and the work we undertake is getting more complicated as the years progress.

What does the Oak Group do?

Oak is a private client, corporate services and fund administration business with offices in the Isle of Man, Guernsey, Jersey, Luxembourg, Malta and Mauritius.

The company launched in March 2019 and was the consolidation of three existing businesses – Kreston IOM here in the Isle of Man, Consortia in Jersey and Oak Trust in Guernsey. Since then the company has also acquired International Administration Group in Guernsey and we now have more than 200 employees across our six jurisdictions.

At Oak our mission is to deliver financial solutions that exceed the expectations of our institutional and private clients worldwide.

All of our services are bespoke. We work with leading intermediaries to service complex structures and offer trustee, corporate governance, company secretarial and administration services among others. We serve our private clients in many areas from asset financing and investment monitoring to family trust and company administration. We also provide specialist fund administration and depository services to private equity, open-ended, listed and alternative asset fund structures.

What is unique about Oak’s model?

Oak has embraced a new way of structuring a fiduciary business rooted in long-term investment. The business has an innovative model which is an alternative to the more common leveraged private equity-backed deal. Oak is backed by the Financial Services Opportunities Investment Fund, a Guernsey-based, International Stock Exchange listed, closed-ended investment vehicle supported by Channel Island investors. The fund has the investment objective of attaining long-term capital growth and income streams by investing in a diverse portfolio; principally financial services businesses based in offshore financial centres.

Oak saw the opportunity to offer a new approach – this model allows us to grow steadily, placing an emphasis on client service and retention to create value in the business. For clients, the stability of an investment fund rather than a private equity-backed trust company is also a benefit as the business prioritises re-investment over delivering returns.

In addition, the model has proved itself to regulators. In the current economic climate, the role of fiduciaries in reporting and providing robust services in a licensed environment has never been more complex. A business that has set out to grow organically can provide the resources needed to manage complex regulations without the pressure to reduce costs. 

What are your thoughts on the rise of private equity investment in the fiduciary sector, specifically in the Isle of Man?

The emergence of larger multi-jurisdictional players in the financial services industry through mergers and acquisitions has become increasingly commonplace, a model often facilitated by private equity (PE) investment. The rise in PE intervention in the trust, fiduciary and corporate services sector has been driven by the maturation of the financial services industry which has made some businesses both attractive and receptive to approaches from potential buyers.

The industry has seen significant contraction as a result; compliance and regulatory pressures have added to the contraction which has seen a marked increase in recent years. 

Oak has been created by combining likeminded businesses with employee engagement and longstanding relationships. We pride ourselves on the level and quality of service we provide our clients but moreover we strive to work with clients to understand their immediate and long-term goals and objectives.

What do you expect to see in your industry in 2020?

Locally, I hope to see greater engagement across government, industry and professional bodies to enable us all to work together to promote the Isle of Man as a stable jurisdiction across the North West of the UK.

I expect to see an increase in digital enterprise in the island and I think we need to do more to capitalise on our reputation as a UNESCO Biosphere jurisdiction. This is a real differentiator for the island and we should shout about it more, so hopefully this is something we can do this year.

Regarding structuring of luxury assets, yacht and aircraft acquisitions have often been structured through the Isle of Man with its aircraft registry and shipping registry, but recently it’s been important for the island to clarify the processes. The Isle of Man Government offered HM Treasury to carry out a review on its VAT rules and procedures regarding aircraft and yacht importation and the review found that the UK and EU VAT law has been correctly implemented - offering further security to clients when structuring their luxury assets so we hope to see an increase in enquiries in this area.

Regarding opportunities in other jurisdictions, the Middle East is an area of significant growth and opportunity. The Isle of Man offers stability in terms of financial, legal, political and economic elements which are key factors required by individuals and families originating from the Middle East.  Also, the Kingdom of Saudi Arabia has been a jurisdiction which has had a change in its approach and there has been a number of local legal and fiduciary firms regularly visiting the region so I hope to see more opportunities there this year.

How is the Isle of Man (and Oak) adapting to a new generation and demographic of clients in the private and corporate space?

Single family office and multiple family office solutions are both seeing a marked increase.

With multiple generations the balance of ensuring that the needs of the greater family are considered is key but engaging with the next generation has seen that the focus is not always on the commerciality.

Whilst philanthropy has always been important the growing awareness of environmental issues has caused financial planning to extend beyond charitable works and contribute to the actual decisions over investment and portfolio construction. Increasingly clients are requesting that environmental, social and corporate governance (ESG) portfolios are created where social impact considerations are measured alongside financial return. This has been a major shift for our industry with social purpose having really evolved over the last 12-24 months.

Dealing with millennials and the digital generation is making the industry think differently about how it services clients too. Expectations on delivery are changing – clients want data quickly, they want accessible services and they want to receive information digitally. As a result, Oak is looking at ways it reports and responds to clients, investing in systems and apps that will enable data to be accessed and downloaded easier and quicker onto smartphone technology.

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