The “very tight strategic partnership” between took four years to come to fruition, tells Delano. “It’s not something we do every week or every six months,” so a lot of consideration went into the decision to accept ICG as a financing partner. “We knew ICG as a company and over the years we had contact with them in other contexts, and really the conversation developed itself and suited the thinking we were doing internally.”
We wanted someone who would be comfortable with trusting in us to keep developing the business, while being prepared to follow us on expansion plans with the financing we needed.
A key factor in the decision: ICG is a minority stakeholder and investor. “As part of our strategic thinking, we wanted to remain a majority. As for what we were looking for in terms of investors. We wanted someone who would be comfortable with trusting in us to keep developing the business, while being prepared to follow us on expansion plans with the financing we needed.”
Growing in market share, staff, locations
Mergers and acquisitions in the fund and corporate services have been exerting pressure to grow on the sector, but for Atoz, the demand comes from elsewhere. “There is clearly a demand for broader scope and broader geography [from our clients]. This is obviously creating growth.”
Atoz Services, a sister company of Atoz Tax Advisers, offers corporate and tax compliance services to Luxembourg-based entities managed by alternative fund and corporate managers. Currently managing 800 clients, the company through the ICG investment wants to expand both geographically and in terms of headcount.
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The firm wants to provide additional services too: “traditionally we were very concentrated in the non-regulated part of the business. We were doing special purpose vehicles that were non-regulated entities. We had quite a bit of demand from clients saying ‘Would you take care of the work for the regulated entities (which are often funds or regulated partnerships of various descriptions)? The second area was that we had some clients saying ‘Would you do this in other countries because we really like what you’re doing in Luxembourg’ so the geographic expansion was in demand.” Growing Atoz’s marketshare wasn’t a direct demand but would come quite naturally.
Careful selection for quality
Growth is part of the company’s mindset, says O’Donnell, but quality comes first. Though in the past, Atoz chose to maintain quality over fast expansion, the years of experience accumulated gives him confidence that it will manage to balance growth and quality.
Atoz Services currently employs around 140 staff between its base in Luxembourg and its near-shoring centre Casablanca. The latter was a response to the “insolvable talent equation”, O’Donnell explains. However, despite the challenge, “we are still looking to recruit locally.”
“Our plan is to take marketshare so all of that creates growth in Luxembourg.” This could come in the shape of M&A, says O’Donnell. “We’re clearly planning on growing. We’ve said that part of admitting an external financing partner is to allow us to grow, that means also by M&A.” Though the firm is “actively looking for interesting acquisitions and integrations,” they are currently focused on their partnership with ICG. “It’s a very tight partnership, so there aren’t any plans for another one in the foreseeable future.”