From competitor to country head

Feb 11, 2019
Tadhg Young, State Street’s Global Services Country Manager, reflects on his career, the crisis and his positivity for the future.
 
When State Street Global Services country manager, Tadhg Young, looks out from the company’s office on Dublin’s Sir John Rogerson’s Quay, he can see the Central Bank headquarters across the river, a growing number of new apartments and commercial developments, and the original IFSC up-river. “We have a growing community here and it’s great to be part of that,” he says.

Young has been part of that community for more than two decades, having worked in both Dresdner Bank and Allianz Global Services before joining State Street in 2007. He began his career with PwC in the 1980s and moved into industry to gain wider experience. “I had specialised early and young in tax,” he recalls. “I was just 21 or 22 years of age and I felt that it was too early. I wanted to see what else was out there. I probably took the first job that came up and that was in W&R Jacob, the biscuit manufacturer. I was never going to stay there for long, but I enjoyed it. I left to join Dresdner after just over a year.”

After several years with Dresdner and Allianz, he joined IBT Ireland as Head of Trustee, Custody and Middle Office Servicing. That company was acquired by State Street in 2007. “Any person who gets acquired with a company has to go through a period when the new organisation gets to know them,” he notes. “I had the fortunate experience of moving from being a client to a competitor to an employee of State Street within 24 months. We knew each other quite well already so it made the transition quite easy when I joined.”

The financial crisis

That aspect of the change might have been easy, but the onset of the global financial crisis was about to change everything. “It was a bit different for us here,” he points out. “While almost everyone was preoccupied with the domestic situation, we were preoccupied with the international situation. You learned more than you ever thought you were going to learn. Everything that was tried and trusted had to be questioned – liquidity risk, counter-party risk, everything. All these things we had relied on had to be questioned from the ground up. State Street had a group of risk management experts to manage our way through that, in Ireland and globally.

“By 2010, the worst was behind us and we started growing in Ireland again,” he adds. “They were a very intense few years, having to deal with the challenges of the acquisition and the crisis. In hindsight, they were great learning opportunities.”

Winning trust

Young’s modesty becomes apparent when he is asked to describe his career journey in State Street. “Since 2010, we won a number of significant mandates here in Ireland. I was put in charge of on-boarding one of them, then I got another. I got more and more challenging work to do. I ran a group, then a bigger group, then became COO, then became country manager. It was a question of showing what you are capable of and winning the trust of management and staff.”

That matter-of-fact recollection belies the scale of projects he undertook, which included on-boarding the largest exchange traded fund (ETF) platform in Europe at the time. “That was a hugely significant transaction for State Street in Ireland,” he says. “ETFs have different characteristics to other funds. They are traded on the stock market, so the level of precision required for valuations and so on is very high. I got to understand State Street from end-to-end and got exposure to senior management and investment managers.”

He quickly shifts the focus back to State Street. “In Ireland, we offer depositary, transfer agency and fund administration services,” he explains. This sees the company hold trillions of dollars worth of assets for clients across the world and value them every day. 

“That’s why we have about 2,000 people in Ireland,” he continues. “We do business across every kind of investment product including ETFs, tax transparent funds, hedge funds, alternative funds and so on. Ireland has built an industry here over the past 25 years, which allows investors across the world to invest in products that are domiciled and administered in Ireland but managed globally.”

State Street has a 38% share of the global investment funds market here in Ireland. “We service some of the world’s largest and most successful fund managers,” he says. “It’s been very intense and rewarding work. It’s a great way to develop your skills in areas like project management. You also develop inter-personal and technical skills.” But it isn’t all about business. “We have a social purpose as well. A large proportion of our business is servicing people’s retirement savings. That’s very important.”

Positive outlook

Looking ahead, Tadhg believes State Street is set to continue to grow on the base of the solid platform it has built. “At present, investment funds regulated by the CBI (Central Bank of Ireland) total $2.8 trillion and State Street services over $1.1 trillion of that. I am really convinced that we have the best workforce in the sector in Europe and globally. The team here services complex investment funds as well as anyone on the planet.”

He is also positive about Ireland. “It’s fantastic to see how Ireland responded to the crisis,” he says. “I have three children and it’s great to see them grow up in a country with so much to offer compared to the mid-1980s. IBEC has done some fantastic work on projections around housing, education and so on. Social capital is what’s going to drive Ireland and help the country to continue to grow in a reasonable way.”

Tadhg is also quite open in his admiration for the Central Bank and the work it is doing. “It goes back to what this business is about – managing other people’s money. That requires regulation. You have to give credit to the Central Bank for developing the sector in the first place. For example, Ireland hosts 54% of the assets held in exchange traded funds across Europe. Internationally, the Central Bank has taken thought leadership positions in many forums and it is widely respected for that. It hasn’t been a passive supervisor. It is very active in the space and is committed to being a forward-thinking regulator. Of course, there will be times when we think regulation might be too constraining but ultimately, these things find equilibrium.”

The role of the Central Bank will become even more significant in the wake of Brexit, he believes. “It will be the only English language regulator in Europe. It’s very important to recognise that. The roles that individuals from the CBI have filled in ESMA (European Securities and Markets Authority) and other bodies will also be very important.”

On tax, he points out that the 12.5% rate is of secondary importance to the funds industry. “Tax certainty is key,” he contends. “State Street is in Ireland because international investment managers decided to domicile funds here. They didn’t come here for the 12.5% rate; they came here for the ability to passport funds to the EU and globally. We came here to service clients. The investment funds themselves are tax neutral and operate in a tax environment that is clear, transparent and compliant with OECD practice and EU law.”

Inclusion and diversity

Inclusion and diversity are topics close to Tadhg’s heart and he describes the organisation’s commitment to them as “one of the most attractive parts of working for State Street.” Under the wider banner of global inclusion, State Street offers programmes such as flexible work, which allows five possible options: flexible place (remote working), flex time, compressed schedules, reduced schedules or job-sharing; a global mentoring programme; a wide variety of employee networks and affinity groups; sponsorships of external events and organisations focused on diversity and inclusion; a formal work/life programme to help balance professional life and personal responsibilities; a recognition programme for employees who display best-practice inclusion behaviour; inclusion-focused leadership initiatives, with a 30-member global working group; performance goals focused on inclusion-related behaviour; a Global Employee Engagement Survey; and a ‘Voices of Inclusion’ programme and other opportunities to share feedback. “We don’t want to blow our own trumpet,” he adds. “Lots of companies are doing things. But it’s not about ticking a box. This is something we want to do, not something we think we must do. You have to work really hard at it. It’s a very complex topic. You have to be sensitive about it. If you are well-intentioned and work at it, you will get a better outcome.”

Future leaders

When asked for his thoughts on leadership, Young’s self-deprecating nature is in evidence once again. “I am not the most self-reflective of people,” he says. “For anyone who wants to be a leader, if you plan things out, you have a better chance of success. You need to grasp opportunities and take an element of risk. Don’t go for perfection; 80% is probably as good as 100% in terms of the information you need to make a decision. Make the decision based on facts, but trust your instincts as well. You also have to explain why you are making decisions; if you have good people, they will come with you. You also have to be self-aware and know what you can’t do.” And he has no concerns about the next generation of leaders in State Street. “I was at a management update with 50 of our vice-presidents recently and I saw five or six people in the room with the ability to do my job in five or six years’ time.”

Tadhg Young is Global Services Country Manager at State Street.