Q&A: Corporate Solutions in The Netherlands
Apex recently announced the appointment of Michiel van der Maat as Head of Corporate Solutions, Netherlands. In this role, Michiel is responsible for leading and growing Apex Group’s Dutch operations, as well as developing, planning and executing corporate strategies. Here, he offers his insights on the current dynamics driving the Dutch market, his growth plans for the business and outlook for 2022.
What are the current themes driving change in the Dutch market?
Legislative changes, in part driven by both political and public debate around the roles of corporate and financial service providers, have drastically changed the Dutch corporate and financial service industry in recent years.
Whilst traditionally, tax was often seen as one of the key motivators for structuring or locating companies in the Netherlands, that is no longer the case. We have seen that predominantly tax-motivated structures are being liquidated, restructured or migrated, and are making way for both corporate and fund services clients that require proactive and hands-on operational and administrative support when operating their business in the Dutch, European and global markets. The complexity of doing business abroad combined with an increase in regulatory compliance has resulted in an ongoing trend to outsource business administration services.
At the same time, the Netherlands remains one of the most attractive markets through which to enter Europe. On an ongoing basis we’ve seen the Netherlands benefit as a jurisdiction from Brexit, with companies that used to operate from the UK into the rest of the European market now selecting the Netherlands as the preferred location to set-up and register in the EU for a variety of reasons. Together with companies from the UK, we continue to see significant investments from North America and Asia into the Netherlands as a popular and preferred location for doing business.
This, combined with a robust return of economic activity in 2021 following the pandemic shock of the previous year, means that the Netherlands continues to rank high globally for foreign direct investment. Its strong reputation for a highly skilled and multilingual workforce, geographic benefits of being Europe’s leading logistics hub, as well as regulation and structures which value sustainability, technology and innovation, have all encouraged continued investment.
Following the changes in our industry, Apex Group has evolved its Corporate Solutions business in the Netherlands. With a focus on proactive and hands-on corporate support, we enable clients to successfully enter the Dutch and European market while they expand global business operations.
What trends have dominated in 2021?
In 2021, we have seen exceptionally high levels of M&A activity. Dutch deal flow in Q3 2021 was up 60% on the previous year as pent up pandemic demand for acquisitions, pressure for private equity firms to deploy dry power, and regulatory change drove a flurry of dealmaking.
2021 has also been a year of transition and transformation for many companies. We are seeing many corporates, as well as private equity investors, looking to realign their businesses and portfolios to benefit from the post-pandemic recovery and position themselves for future growth.
What do you expect to be the key themes in the market for 2022?
The supportive macro-economic conditions for M&A that we have seen this year, namely the lower cost of capital provided by the low interest rate environment enabling acquirers to raise net debt efficiently and the substantial amount of ‘dry powder’ raised by private equity will continue.
The Netherlands will continue to grow as a prominent destination for business expansion, capital raising and transaction activity. Many managers who have previously launched funds in offshore jurisdictions are now looking to come onshore, often at the encouragement of their investors. Furthermore, at a foreign investor level, the Netherlands will continue to benefit from Brexit in 2022 and beyond as businesses seek continued access to EU markets, especially now there is greater visibility over the regulations governing the operations of businesses in Europe.
COVID-19 has increased the need for flexibility and adaptability from businesses during the continuous uncertainty of the pandemic. Many firms have turned to outsourcing of administration functions as a more economical way of accessing wider resources, expertise and operating infrastructure or technology which they may not have the capacity to build or maintain themselves.
At Apex Group, we expect ESG reporting and compliance to become increasingly prominent, and are proud to actively support, enable and reinforce this focus, which we believe is here to stay. Private markets are actively seeking products and services which enable them to understand, quantify and improve their ESG credentials. Our ESG Ratings & Advisory platform manages the independent collection of data for investors from their underlying portfolio investments to deliver real time ESG analysis via a secure, intuitive and flexible online platform. The product aims to be a catalyst for behavioural change in the investment process by delivering ESG data in an efficient and usable format. We have been pleasantly surprised by the ravenous appetite of the market for this product and expect this momentum to continue in 2022.
What differentiates Apex Group’s offering from other providers in the Dutch market?
Apex Group’s particular strength is being able to offer clients the broadest range of services, delivered locally by an expert team, from a single source. This means that clients are able to access all the solutions they need within one organisation, from administrative and investor services for their portfolio, to the services needed at every other level in between (e.g. Manco, SPV, HQ, Opco). Our solutions stretch across banking, depositary, custody, fund administration, corporate solutions and ESG services.
Managers are now increasingly seeing the advantages to having one provider – primarily the cost and administrative efficiencies achieved, seamless integration and a single point of contact for ongoing relationship management – and are shifting their buying behaviours accordingly. It can greatly reduce time spent navigating through different set-up processes with multiple providers, which can be a source of great frustration for businesses.
Another differentiator is Apex Group’s digital banking platform. The frustrations businesses and asset managers face when trying to open a bank account is reaching new heights. Being able to open bank accounts for clients through our own European Depositary Bank shows that we listen to the market and are able to provide them with an efficient and modern solution.
Where do you see opportunities for Apex Group’s Dutch business to grow?
We recognise that the corporate services industry is rapidly evolving – especially in the Netherlands. With significant international and local legislative changes on the table, as well as an increase in regulatory compliance and complexity, clients need proactive, flexible and hands-on support when operating in the Dutch market, and beyond. By continuously differentiating our service model and evolving our client offering, Apex Group is able to respond to these clients’ needs.
We look forward to launching the new services we have planned for 2022. We see ongoing and constantly evolving opportunities to provide corporate support to both asset management and corporate clients looking to set-up and expand operational activities in the Netherlands. Included in this will be a new incubator style service that we plan to bring to the market in 2022, covering the full suite of services required to launch, operate and grow a business in the Dutch market.
We are excited for what lies ahead in 2022. The growth of our Corporate Solutions business in the Netherlands continues to be a key strategic priority and integrated with our Financial and Funds Solutions offering, it will allow us to showcase our truly pioneering single source solution.
To find out more about how Apex Group can help your business, contact our team.