A self-confessed adrenaline junkie, John Sergides likes to keep active. “I swim six kilometers a day, I kitesurf, I free dive and every year I’ll go heliboarding or heliskiing,” he tells The CEO Magazine.
He understands that risk is par for the course when participating in such activities. He also knows that the same can be said about a role in the C-suite.
“The fundamental principle for being a CEO is that you are there to take risk, to take responsibility, to be accountable,” he says. “If you’re not taking on risk, if you’re not focusing on top-line growth, then this is not the right job for you.”
“I spend a lot of time thinking about my decisions before they are executed.”
What is key, he cautions, are the foundations laid in advance, through planning, preparation and practice. These are traits he implements daily, as the CEO of MUFG Investor Services, a division of Japanese banking giant, Mitsubishi UFJ Financial Group (MUFG). The business was born in 2013 when MUFG acquired Butterfield Fulcrum Group, and in keeping with the culture of the parent company, Sergides quotes a Japanese proverb that best describes his approach to risk, both in and out of the boardroom.
“You’ve got eight hours to cut down a tree and you spend the first seven sharpening your axe,” he explains. “This is the same with business. I spend a lot of time thinking about my decisions before they are executed.”
A Point of Difference
Since becoming CEO in 2018, Sergides hasn’t shied away from taking risks. “When I took over, the business was a break-even business,” he says. But he knew if it wanted to be more than mediocre, bold decisions were required.
Along with smart hiring decisions that put the right people in the right roles and the adoption of leading-edge technologies, Sergides spotted and executed opportunities to diversify its product offering.
Fund financing, securities lending, currency (FX) overlay and, most recently, payments, were some of the teams brought into the fold, as he looked to build out MUFG Investor Services’ offerings beyond what is traditionally offered by fund administration and asset servicing companies.
These moves allowed the company to position itself for growth in a market where growth can be slow.
“The fund administration business is becoming more and more of a commoditized business and a bit of a zero-sum game between us and other providers. For us to win a client means someone has to lose a client,” Sergides notes.
“So where we differentiate is on the services side of things. In addition to asset services and fund administration, the services our clients need are balance sheets, transference of risk and transference of liability,” he explains. “And these things come along with cash, with payments, with FX and with financing.”
Those clients, he explains, are tier-one names, not only in size but in quality and character. It’s a small but carefully curated client base of hundreds and that selectiveness has been critical to MUFG Investor Services’ growth.
“A good client base will do more business with fewer partners, and that’s where we come in,” he says. “Instead of two or three services, which is where it was when I took over, we now have a suite of more than 20 services and most of our clients use more than 70 percent of those services.”
“We now have a product set of more than 20 services and most of our clients use more than 70 percent of those services.”
One achievement Sergides is particularly proud of is the fact that MUFG Investor Services doesn’t lose clients and maintains a nearly 100 percent client retention rate. “This is absolutely critical,” he says. “Our partnership with our clients is the most important thing we do.”
Now, thanks to these changes he has spearheaded, clients are highly engaged. “They’ve got our ear on a constant basis to bring them much closer to us,” he explains.
In it for the Long Run
From a small fund administrator, administering a few hundred billion in assets, Sergides has guided MUFG Investor Services toward the trillion-dollar mark. “We are nearly a billion-dollar top line company. We’re hugely profitable.”
As well as diversifying its product portfolio, he has also focused on expanding its geographic footprint. In the past 18 months, the company has opened offices in Cyprus, Australia, Canada and Malaysia, and next up is the Middle East. The latter, he says, is especially significant, given the value of the sovereign wealth funds that flow in the region.
“The Middle East, specifically Abu Dhabi, is the next piece of the puzzle,” he explains.
“The Middle East, specifically Abu Dhabi, is the next piece of the puzzle.”
As the market enters what could be a substantial period of dislocation, there are some in the industry that may need to slash products and services, geographies and people. This makes MUFG Investor Services’ ability to expand while others contract particularly critical.
“Our clients are looking for partners who are reliable and who are going to be there for the long run. And that’s us,” Sergides says. “We are very much a unicorn in this regard.”
A Lasting Legacy
Sergides, who hails from Cyprus, has found a lot of common ground between his home country and MUFG’s Japanese roots, especially in terms of values placed in building long-term relationships and trust in your word.
“Being at MUFG has felt very comfortable for me,” he says.
And, while there’s an inherent advantage that comes from MUFG’s 350-year history, he knows that there’s also the future to secure by building the asset services and administration business of this legacy brand.
“My own legacy is not the most important,” he says. “The firm’s legacy is much more important.”
Already, it’s clear that under Sergides’ stewardship, the future is in strong hands. “If we maintain the culture that we’ve built, which is a collective effort to continue fueling growth and stability, and most of all, do right by our own people, then I’ll be happy,” he says.