Luckily, Matthew Adams has at least two decades worth of expertise guiding him with each new policy shift and market shakeup. His resume includes various senior roles at major firms like State Street, HSBC, Northern Trust and BNP Paribas.

By 2022, Adams arrived at First Abu Dhabi Bank (FAB) where he oversees the bank’s international client base of global custodians, broker dealers and private banks.

Adams provided Global Finance with some insight on sub-custody services, his approach to client management, and the complicated nature of modern securities services. The interview has been edited for length and clarity.

Global Finance: What are the latest trends in sub-custodianship?

Matthew Adams: Sub-custodians are experiencing different trends based on regional factors, local economies and regulatory environments. There is often a disparity in how individual markets can keep pace with infrastructure developments. In the GCCE [Gulf Cooperation Council and Egypt] markets where FAB provides sub-custody services, we see a range of models. Some operate on a broker clearing model, while others have transitioned to true delivery versus payment and central counterparty [CCP] clearing models. This diversity presents a significant challenge as global investors seek uniformity in trading venues. Intermediaries and global institutions are looking for regional consistency in partnerships which can drive substantial commercial opportunities. One notable development is the emergence of the General Clearing Member [GCM] initiative. This allows international broker dealers to become remote trading members of the local exchanges. 

GF: How does that help?

Adams: There are multiple benefits to this. It eliminates the need for a local presence and the requirement to transact via a locally licensed broker. Direct connectivity with the exchanges is established to enable trading on both proprietary and client accounts using a licensed custodian clearing member. However, for the global broker community to move away from using established local broker relationships in multiple markets, we will likely need to see a standardized GCM concept across markets, with CCPs in place. The Abu Dhabi Securities Exchange and Dubai Financial Market are expected to go live in 2024, with the Securities Depository Centre Company [EDAA] in Saudi Arabia [owned by Tadawul] following in the future, promising wider adoption thereafter. To achieve post-trade efficiencies and foster commonality in post-trade processes, regional custodians can harness developments in infrastructure to reduce costs and improve overall market efficiency.

GF: Any advice for investment managers when selecting a global custodian?

Adams: The ultimate benefits of appointing a global custodian are efficiency, risk mitigation and cost savings—all captured under one contract. When selecting a global custodian, it is essential to review their due diligence policies with respect to the appointment and maintenance of sub-custodians, as well as their contingent and dual-network operations. Corporates, pension fund trustees and boards of directors should consider these aspects.

GF: Do corporates ever have a say in selecting sub-custodians?

Adams: It’s ultimately up to the global custodian to select and manage sub-custodians. What we do see is that many global custodians, in addition to running dual and/or contingent networks, may appoint an additional sub-custodian at their clients’ request. This typically occurs if the client is of a size and relationship that warrants such a request and has due cause for concerns regarding a particular sub-custodian, whether those concerns are related to risk or competition.

GF: Why are more companies seeking opportunities in emerging markets?

Adams: Many companies are looking to expand into these markets and rightfully so, when you consider the number of untapped opportunities. Many of the more successful markets in the region have a few things in common, such as having a relatively wealthy population—both domestic and foreign—large reserves of capital and most importantly, strong leadership.

To provide some context on why there is more demand in emerging-market expansion, all GCCE markets are currently classified by various metrics as emerging markets. However, each is in a different stage of development. Some, such as the UAE and Saudi Arabia, achieved significant economic progress in recent years. For example, Saudi Arabia’s stock exchange, Tadawul, has risen to take its place among the top exchanges globally since its founding 17 years ago. The market continues to expand and diversify, with around 40 IPOs in the last 12 months alone. However, it remains heavily concentrated in traditional oil stocks, with Saudi Aramco being the only Fortune 500 company in the region.

GF: What are some of the growth drivers?

Adams: Some of the factors driving growth in emerging markets include engagement with the market, pension fund reforms and a growing domestic investment fund industry. 

Strong local or regional financial institutions and service providers can engage with the markets and push for solutions in line with international investor requirements. Many GCC markets have seen a surge in IPOs — the majority of which have been vastly oversubscribed.

Regarding pension fund and saving reforms: The UAE is changing the existing end-of-service benefit, which will divert capital investment into domestic mutual funds. This move will shift multiple billions of dollars from what is effectively an accounting liability into the capital markets in the first year.

A growing domestic Investment Fund industry supports further capital investment, employment, and greater efficiency in relation to capital markets. In the UAE, there is a move to mandate for onshore licensed funds to act as feeders to what is currently and largely a distribution market for offshore funds. 

Progressive regulatory reforms are also driving growth. We expect that Saudi Arabia, the largest domestic fund industry in the GCC, to require independent fund administrators to calculate NAVs—a market standard in the larger global fund markets. This will bring further comfort to investors and lead to additional investment in listed securities.

The ability for sub-custodians to keep up with and manage these regional changes to facilitate clients’ entry into these markets is paramount. This is where institutions like FAB can play a pivotal role in assisting across the spectrum of the regional markets which are our “home” markets, promoting interoperability and consistency to increase accessibility and ultimately boost investor confidence. 

If GIX gets the green light from the US Securities and Exchange Commission, it plans to kick off trading in 2025. And it’s a global initiative, too. Labovitz tells Global Finance that while a security must be listed on another US exchange to list with GIX, he’s already chatting up counterparts abroad.

“Conversations with exchanges and broker-dealers in Europe and Africa” about potentially bringing equity-linked products, i.e., American Depositary Receipts and exchange-traded funds, from those regions to the US markets via GIX are taking place, he explained. “We’re still in the early stages of those discussions.”

As GIX waits for regulatory approval, Labovitz is mapping out a future where saving the planet is thought of as a savvy corporate finance strategy. The following interview is edited for length and clarity:

Global Finance: Who’s expressing interest in GIX and why?

Daniel Labovitz: We have spoken with hundreds of public companies. From our conversations, it’s clear that they understand the logic and importance of sustainability to their business and their shareholders. Company leaders know that significant portions of their investor base, employees, and customers care deeply about it and are looking for evidence that companies are not just greenwashing. If a company is perceived to be greenwashing, it puts them at a disadvantage when competing for the best talent and consumers—especially younger cohorts, who, more and more, are considering a company’s values as part of their employment and purchasing decisions. Ultimately, company leaders know they will lose access to sustainability-minded investors willing to trade short-term gains for long-term sustainable value growth.

GF: What were some of the questions that get brought up?

GF: Is there data to support that?

Labovitz: There is growing evidence that focusing on sustainability leads to the company’s stock outperforming the broader market. For example, a 2022 McKinsey study found that “green leaders” in the chemicals market doubled their total shareholder return compared to “green laggards.” A 2023 study in Britain found that a board sustainability committee positively impacted market value, while a separate study found that corporate environmental commitments can play a buffering role during disruptive market events. In other words, markets agree that sustainability investments and sustainability-focused corporate governance can improve returns and lower volatility. You’d be hard-pressed to find a CFO or CEO who said “no, thank you” to either.

CEOs and CFOs also like our trading model. It will help companies generally by incentivizing market makers to post liquidity on the exchange. Once the exchange is approved for trading, we plan to seek SEC approval for a market maker support program specifically for GIX-listed companies. That program would reward companies for making up-front investments in green transition by incentivizing market makers to add liquidity in listed stocks.

GF: How does GIX hold companies accountable?

Labovitz: Investors develop skepticism toward company promises, particularly in sustainability, due to the frequent abandonment of ambitious environmental commitments. This lack of accountability often occurs once the public attention wanes. GIX, however, is uniquely positioned to bridge this “trust gap.” We mandate our listed companies to establish a robust governance infrastructure, ensuring that their promises are not just words but deeply embedded in the company’s DNA.

GF: Has something similar been done before?

Labovitz: Incentivizing good corporate governance has been a core function of stock exchanges in the US for more than 100 years. In the early 20th century, there were little standardized accounting or financial controls inside companies, and investors were not entitled to the right to receive disclosures from the company. This allowed a lot of fraud to thrive. To combat this, the NYSE told companies that if they wanted their stock to be traded on the exchange, the company would have to abide by specific corporate governance standards, implement standardized accounting, and commit to regular disclosures to investors. As a result, an NYSE listing became the gold standard for public companies, so much so that when the SEC was formed, it incorporated many of the NYSE’s governance standards into the federal securities laws and rules that we still live with 90 years later.

Sustainability reporting is in a place where financial reporting was in the early 20th century. There is a lack of standardization, insufficient mandatory disclosures to investors, and a lot of greenwashing, whether unintentional or otherwise. To date, the NYSE and Nasdaq have not adopted corporate governance standards for sustainability, so GIX is stepping up to address that gap.

GF: How do investors benefit from GIX?

Labovitz: Regarding value for investors, it’s important to note that even when it was the gold standard for listings, the NYSE never guaranteed that a company would be profitable and did not anoint winners and losers. To the extent it guaranteed anything, it was that investors would get quality, timely, reliable information from which they, the investors, could make informed investment decisions. The same applies to GIX and sustainability: our role is not to anoint companies as “green” or “not green.” GIX’s listing standards ensure companies give investors quality, timely, and reliable information about sustainability initiatives and performance so they can make informed investment decisions. Efficient markets need transparent information; GIX ensures investors get it. After that, it’s up to the market—not the exchange—to allocate capital where it will be most productively used.

GF: What are your next steps?

Labovitz: Our first goal is to launch the exchange and build experience and credibility running a dual listing market. It’s not a small task—several exchanges have tried to launch a primary listing business right out of the gate and not succeeded, so we wanted to learn from those examples.

The timeline for our launch depends on securing SEC approval of GIX’s Form 1 application for registration as a national securities exchange. After approval, we will need approximately five to six months to complete all the pre-launch work that can’t be done until then. That puts us on track to launch trading in the first half 2025.

Once we launch, we’ll be better positioned to evaluate what’s next, including listing green derivative products: ETFs, ETNs, index products, and ADRs, and creating markets for innovative green equity products. Whichever way we go, we promise to keep you posted.

Toward the end of July, several companies looking to go public told vastly different stories than the one billionaire Bill Ackman weaved on social media.

The hedge fund manager grabbed headlines on Wednesday, July 31, when he decided to no longer plan an initial public offering (IPO) for his firm, Pershing Square USA.

In a prepared statement on X.com, Ackman posted: “While we have received enormous investor interest in PSUS, one principal question has remained: Would investors be better served waiting to invest in the aftermarket than in the IPO? This question has inspired us to reevaluate PSUS’s structure to make the IPO investment decision a straightforward one. We will report back once we are ready to launch a revised transaction.”

The withdrawal comes shortly after the fund announced plans to raise $2 billion—significantly lower than the previously touted $25 billion.

When valuations shift so drastically, it’s usually due to “a major event” or “a failed deal, or even a market correction,” Carl Niedbala, co-founder of risk management firm Founder Shield, said.

“It’s tough to pinpoint the perfect valuation,” he added, skeptical that it was indicative of a trend. 

Indeed, Ackman’s decision to scale back IPO plans seemed evident when reports suggested that Seth Klarman, a fellow billionaire investor, appeared to be committed to investing in Pershing Square USA but ultimately rescinded.

Calls to Pershing Square were not returned.

Meanwhile, other companies enjoyed better luck.

Lineage Inc., for example, raised over $5 billion and began trading 12% above its offer price as of July 30, making it the largest IPO of 2024.

In an email to Global Finance, EY’s Global IPO Leader George Chan noted that Lineage’s success underscored a “particularly active” July.

Chan also singles out the $564 million listing of KKR-backed OneStream Inc., which priced above its initial filing range and is currently trading 40% above its offer price.

Then there’s health services provider Concentra Group Holdings, which raised about $529 million.

“Valuations are more tempered compared to the highs of 2020 and 2021,” Chan says. “This indicates a balanced approach with sustainable pricing levels.”

Thus far, he adds, it’s been a good year for IPOs, even if activity didn’t surpass 2023.

According to EY, global IPO volume fell 12% for the first six months compared to last year. IPO proceeds were also down—by 16%—year over year.

The data appears to be far from the comeback dealmakers expected when they spoke to Global Finance late last year.

“The global IPO market experienced a mild downturn due to weak IPO activity in the Asia-Pacific (APAC) region, particularly in Greater China,” he says.

“Historically, APAC has significantly contributed to global IPO activity. Therefore, the decline in IPO numbers is more indicative of APAC’s underperformance rather than the below-average performance of other regions,” Chan adds.

However, he points to two other regions that witnessed a significant increase in IPO activity during the first half of 2024: the Americas and Europe, the Middle East, India and Africa (EMEIA).

EMEIA saw a 45% increase in IPOs and an 84% rise in proceeds, while the Americas experienced a 14% increase in IPOs and a 75% increase in proceeds.

“In stark contrast, APAC witnessed a 42% decline in the number of IPOs and a 73% drop in proceeds,” Chan says.  

Ryan Coombs, a partner in O’Melveny’s Capital Markets Practice, agreed that July was “a positive start to the second half of the year.”

“I don’t think the global IPO statistics reflect the health of the US IPO market,” he adds. “Year-over-year, the trends suggest there will be more US IPOs in 2024 than in 2023.”

Coombs says the US election and interest rate changes may impact the second half of the year. But he expects the same energy in the US IPO market in the first half of 2024 to carry through to the second half of 2024.

“I think the US IPO pipeline will continue to reflect the market’s preference for businesses with quality financials and demonstrated growth opportunities,” he said.

Adnan Bokhari knows how to balance a ledger. He’s a practicing CPA who was named CFO of JA Worldwide, a global nonprofit youth organization, about a year ago. His wife is also a CFO and a CPA. But their three kids? They have zero interest in following in their parents’ footsteps. It’s not just a case of rebellion, either. Bokhari has noticed a broader trend: Fewer and fewer young people are interested in his line of work.

“The risk/return matrix is not appealing,” Bokhari remarked during a recent webinar with The CFO Alliance, a peer group of some 9,000 finance pros.

Chief financial officers arguably have never had a bigger role. They oversee the entire financial operations of a company: from strategic financial planning and risk management to advising on investment decisions and ensuring regulatory compliance. And they typically boast a deep understanding of accounting principles, analysis, and business strategy—essentials in guiding an organization toward its goals.

There’s just one problem, Bokhari says: “We’re competing with glamour.”

Indeed, it’s hard to make accounting sexy when “Instagram influencer” is a viable career option.

CPAs, or certified public accountants—a prerequisite to becoming a CFO—meanwhile, are battling a low-compensation perception. If becoming a CFO is the goal, the average salary—at least within a private company generating less than $20 million in annual revenue—is $194,000. After all those grueling years of education, a CPA might well hold their paycheck up to those of other professions and think, “Was it worth it?”

As Bokhari puts it, “If you look at all the other professions that require similar years of formal education and the other barriers that are associated with it, [or] you get to the point of actually becoming an accountant and you compare yours with the salaries of others starting professions, it’s not exactly equitable at all.”

Many of the participants on the CFO Alliance webinar nodded. Bokhari’s observations, they agreed, highlight a serious issue in the corporate finance world: making numbers cool again. Until that is resolved, it seems the dream of inspiring a child to become a future CFO remains just that: a dream.

Bokhari isn’t alone. A recent survey conducted by the CFO Alliance of 450 CFOs revealed a surprising twist in their nightly worries. When asked, “What keeps you up at night?” the top concerns weren’t just usual suspects like revenue and operational efficiency. The true monster under the bed was hiring and retaining employees.

Over 50% of the respondents confessed that they are not just crunching numbers but also doing succession planning and ramping up their mentoring efforts. As it turns out, teaching the next generation of finance whizzes is a priority, but mastering the art of mentorship and delegating duties to up-and-comers is proving difficult—especially when they don’t want to show up to the office.

That’s just the post-Covid way, Joel Quall, CFO of tZERO, a financial blockchain technology company, laments. “A mere four years ago, everyone went to the office five days a week,” he recalls. “Now you have a different culture that—right, wrong, or indifferent—don’t want to come to the office every day. They want to be hybrid, or they want to work from home entirely, a hundred percent of the time.”

The situation is worse if a company pays exorbitant rent for a metro-area office and no one shows up, Quall adds. “There has to be a happy medium. It’s been a struggle to get everyone to come back to the office.”

Even when the talent roster is in place at the office, too often a tech-savvy team appears perfect on paper but lacks the crucial skills higher-ups would like to see.

Recall the many high-profile CFO announcements from the past year: SoundCloud’s Drew Wilson departed amid rumors of a potential $1 billion sale of the Berlin-based streaming company. Dennis Weber became CFO of Swiss International Air Lines, effective May 1. And Marc Page will take the role at London-based Metro Bank Holdings starting September 2.

Turnovers and new arrivals like these are happening at a rapid clip, underscoring just how tight the job market is at the CFO level. That’s also the case for steppingstone roles, such as vice president and executive vice president. The likelihood of these candidates getting hired or promoted should hinge not just on their qualifications to perform the function but also on their ability to create tangible value within the company, says Christian DeChurch, CFO of Centri Business Consulting.

Many finance and accounting professionals, however, are only “technicians.” That means “they’re really good with numbers but not able to connect the numbers to a strategic vision or value creation plan,” DeChurch adds. “Also, the pace of play these days is too fast, and waiting until you have all the answers will only put you more behind.”

Going forward, the best candidates will likely have a knack for wielding emerging tech. Automation tools and artificial intelligence will revolutionize talent acquisition and development strategies by radically expanding the CFO skillset.

“I believe it will have a major impact,” DeChurch predicts, starting from an implementation perspective as it pertains to finance and accounting—the CFO’s bread and butter.

“In order to become better operators, businesses are transforming their current tech stack into something more meaningful,” he says. “Secondly, the data output from the new tech stack will need an analyst mindset, not number crunchers. This will be new for many who are used to debits and credits, and now must tell the story through the numbers and explain the ‘why’ throughout the business.”

DeChurch posits a simple reason why CFOs across the globe are stressing out over hiring and retention. It’s “because many folks think of themselves as ‘the boss’ and not a mentor,” he tells Global Finance. “Work, like many other things in life, is an apprenticeship model with mentors and mentees. If people don’t sign up for your program or a mentee quits your program, then you need to look in the mirror.”

Many companies have used mentorship programs to foster leadership development to great effect, including Goldman Sachs, Procter & Gamble, IBM, and General Electric. If that doesn’t work, it’s on you, DeChurch concludes flatly.

“I don’t believe people are afraid to work hard and go above and beyond, but they want and need guidance, a voice, and an ownership or accountability stake in the project,” he says. “There are no bad teams, only bad leaders. We are responsible for mentoring folks into today’s demands and transforming them into analysts, [teaching them about] being more strategic and adding real equity value, what it means to project manage an IT implementation, how to have hard conversations, how to negotiate critical agreements, and everything else that might come out of left field.”

For Robin Helfer, a former CFO of clothing company Ashley Stewart, mentorship starts at the college level, because fewer students overall want to study accounting and finance.

“We’re seeing more people go toward other majors that really didn’t exist years ago, like business analytics, as an example,” she says. “And I’d say in general, attracting accounting talent is just an issue, because you need additional credits in order to be certified. I think that is a hindrance as well.”

But while the lure of new, trendy majors is a serious problem, she isn’t waving a white flag. Helfer is a committee member at her alma mater, Binghamton University, and its School of Management Alumni Advisory Board, which is tasked, among other issues, with keeping the talent pool from drying up. 

“It is one of the major obstacles that we, as CFOs, face,” Helfer says. “We have to figure out a way to continue to attract talented students into the accounting major so that it’s ultimately feeding the talent pipelines for our organizations.”

In the ever-evolving landscape of global finance, the once-muted lines of dialogue between corporates and sub-custodians have transformed into a vibrant exchange. As Richard Anton, chief client officer at CIBC Mellon, tells it, the most fundamental aspects of sub-custodianship have remained somewhat consistent over the years. Sub-custody providers like Toronto-based CIBC Mellon possess robust operational capabilities, strong connectivity to support effective cross-border processes, and deep local knowledge.

But in 2024, the environment within which sub-custodians function has become more complex. Geopolitical tensions, like Sino-US trade conflicts and the Russia-Ukraine war affecting energy markets and supply chains, combined with technological advancements such as artificial intelligence and blockchain, and a tangle of new regulatory demands significantly complicate and heighten the day-to-day competitiveness of global finance.

Corporates are no longer keeping quiet. They’re actively seeking out sub-custodians for their expertise in meeting these challenges.

As a result, “the relationship between sub-custodian firms and corporates has become more collaborative and strategic over the years,” says Anton. “Traditionally, sub-custodians were seen primarily as service providers handling transactional aspects of custody. However, in 2024, this relationship has evolved into a partnership where sub-custodians are viewed as key advisers in managing and optimizing the safekeeping and servicing of assets.”

Corporate brass increasingly rely on sub-custodians for insight into market developments, regulatory changes, and risk management strategies. There is also a growing expectation that sub-custodians support value-added services such as data analytics, environmental/social/governance (ESG) reporting, and digital assets like recently approved bitcoin exchange-traded funds.

“Anecdotally, we have seen instances where corporates have engaged with sub-custodians to develop bespoke solutions for their unique needs,” Anton notes. “For example, a corporate client might collaborate with a sub-custodian to implement a customized reporting framework that integrates ESG metrics, helping them meet investor demands for greater transparency and sustainability.”

Earlier this year, JPMorgan Chase decided to hand over its local custody operations in Taiwan to Standard Chartered. Despite being touted as the third-largest global custodian, the New York-based banking giant simply couldn’t hack it at the local level in East Asia—7,800 miles away.

Yes, JPMorgan routinely handles cross-border deals. But local custody is a different beast. With a whopping $520 billion in assets under management as a local custodian in North Asia, JPMorgan decided it was better off outsourcing services to a firm with a better sense of the goings-on across the region.

It was a “mandate win,” says Margaret Harwood-Jones, global head of Financing and Securities Services at Standard Chartered, that “significantly demonstrates the success of our focus and strategy in connecting our clients to local markets to support their business agendas, while delivering client-centric solutions that we can scale across the markets and relationship with our clients.” Standard Chartered is now “the top [foreign institutional investor] custodian in Taiwan,” she adds.

JPMorgan retreated from Hong Kong and Australia, too, but has kept its fingers in the global pie by selecting HSBC to provide sub-custodian services in Hong Kong and Taiwan. It  isn’t yet known which sub-custodian is stepping in for Morgan in Australia. But the bank’s strategic retreat highlights a growing realization: that the biggest global custodians sometimes just can’t handle the local flavor of certain markets.

JPMorgan, just as it does in Asia-Pacific with Standard Chartered and HSBC, has secured the help of UniCredit in the Czech Republic and the Central Eastern Europe region.

“The contractual setup is always between GC and sub-custodian,” says Júlia Barbara Romhányi, global head of Securities Services at UniCredit. “In this respect, GCs act on behalf of the corporate client and manage their assets with the sub-custodian.”

So, in the Czech Republic, it’s JPMorgan’s responsibility to monitor and mitigate risks associated with doing business in a certain region by picking the right sub-custodian, Romhányi explains.

Northern Trust and Societe Generale Securities Services, too, leverage an extensive network of sub-custodians to manage assets across multiple jurisdictions. That way, they can focus on their core global custody services. By tapping sub-custodians, the bigger firms can streamline operations and reduce costs without having to stress about the regulatory demands of countries they don’t know enough about.

In other words, sometimes you have to let go of the local to keep your global game strong.

The history of sub-custodianship in global finance has always been shaped by the evolution of international trade and investment. By the early 2000s, regulatory shake-ups like the US Securities and Exchange Commission’s Rule 17f-7 were placing more responsibility on global custodians to oversee sub-custodians, particularly in emerging markets.

Then there was the 2008 global financial crisis, which underscored the importance of robust custody services. In the years that followed, scrutiny of sub-custodians’ role in safeguarding assets has increased, leading to stricter regulatory frameworks and higher standards of operational due diligence.

GCs are conducting due diligence on their sub-custodian network “on a regular basis,” Romhányi notes. “They have the fiduciary duty [of] acting in the best interest of their clients, ensuring the safekeeping of the assets, adhering to all relevant regulatory requirements.”

Sub-custodians now find themselves on the verge of sweeping change once again.

“In the fast-paced world of finance, the role of sub-custodians has evolved significantly over the years,” Thompson says. “As we are midway through 2024, several key changes and challenges have emerged, reshaping the sub-custody landscape.”

This time, the technological advancements are far more daunting than the ones that preceded them. That includes finding ways to leverage AI and electronic ledgers like the blockchain to enhance operational efficiency and security, according to Alexis Thompson, BBVA’s head of global securities services.

The integration of advanced technology like AI algorithms will facilitate better data analytics, risk management, and decision-making processes, Thompson predicts. It’s something BBVA has already begun exploring, along with blockchain, advanced encryption methods, and multifactor authentication: all to safeguard systems.

“This technological evolution is helping reduce manual errors and operational risks, providing a more reliable and efficient service to clients,” Thompson says. “From technological advancements to regulatory shifts, the sub-custodian’s job today is markedly different from what it was even a few years ago.”

Regulatory changes are once again affecting sub-custodians profoundly. The European Union’s Central Securities Depositories Regulation (CSDR), for instance, requires sub-custodians to maintain higher levels of transparency, report more detailed information, and ensure better protection of client assets.

“These regulatory requirements have driven sub-custodians to invest heavily in compliance technology and processes,” Thompson says.

Sub-custodianship, in other words, has evolved from a bundle of informal arrangements to a critical, high-tech component of global finance. And the role of the sub-custodian can be expected to continue morphing as financial markets become ever more interconnected.

Corporates’ involvement at this level is deepening as well. While they do not have a direct say in selecting specific sub-custodians, they set criteria and expectations for their global custodian as it makes these choices, according to CIBC’s Anton.

“Corporates can ensure through their own due diligence that the global custodian maintains a proven robust process for the selection and monitoring of its sub-custodians,” he says. “Corporates often engage in regular reviews and maintain open communication with their global custodians to ensure that their standards and requirements are being met throughout the custody chain.”

Four days later, Canadian investment fund Brookfield Corporation agreed to evaluate a takeover bid for Grifols, with the intent to delist it. The Grifols founding family owns a stake of around 30%, according to the latest data from Spanish securities regulator CNMV.

Enter Srinivasan, whose dealmaking expertise will come in handy as outgoing CFO Alfredo Arroyo gets ready to retire after 17 years. Grifols CEO Nacho Abia, in a prepared statement, praised Srinivasan for his “deep knowledge of corporate finance” as well as “his strong performance-oriented culture.”

Srinivasan certainly brings with him an extensive career in financial services. Over the course of 25 years, he has held senior leadership roles at big-name firms including KPMG and Credit Suisse. Most recently, he was head of EMEA leveraged finance and capital markets at Bank of America.

Auditing and M&A are among Srinivasan’s specialties.

“I look forward to partnering with Nacho, his senior management team, and the Board of this venerable institution that has made a huge difference to people’s lives with its portfolio of life-changing medicines across a wide range of therapeutic areas,” Srinivasan said in a prepared statement.

His appointment is set to begin on September 16—eight months after law firm Block & Leviton began investigating Grifols over alleged securities law violations. Between January and March, Gotham City Research, a short seller fund, published a series of reports questioning the Barcelona -based company’s finances. The scrutiny wiped out more than $3.8 billion of Grifols’s market value and the stock hit a 12-year low in March.

The company denied any wrongdoing and blamed Gotham’s “malicious, false and misleading insinuations” for sowing doubt among institutional investors. 

The discussions between the Grifols family and Brookfield, if successful, would result in a joint takeover bid with the intent of delisting Grifols from the Nasdaq and the Bolsa de Madrid. Grifols currently boasts a total market cap exceeding $7 billion.

Then, with classically poor timing, a Boeing jet lost a wheel during takeoff from Los Angeles on July 9, further jeopardizing the 108-year-old company and its client relationships. The Defense Department will “make a determination as to what steps are necessary and appropriate to protect the federal government,” a Pentagon spokesperson stated afterward.

US government contracts account for 37% of Boeing’s revenue. In 2022, the Arlington, Virginia-based company secured $14.8 billion working for the Pentagon; its defense and space division drew $7 billion in sales for the first quarter of 2024.

The reverberations from Boeing’s malfeasance are being felt worldwide. The Canadian government, for example, is reportedly reassessing its dealings with the manufacturer. Meanwhile in Europe and the UK, regulations restrict contractors with criminal convictions from bidding on public contracts for specified periods.

As part of its plea agreement, Boeing is to pay a $243.6 million fine and commit some $455 million to enhance safety. Arguably, the company needs to do the latter anyway; this year’s mishaps started on January 5, when the door of a Boeing 737 Max 9 aircraft fell off just after takeoff from Portland International Airport in Oregon.

The crisis has taken a toll on Boeing’s financial health, with its stock plummeting over 12% in the past year. Still, the manufacturer has deals in the works; it hopes to acquire Spirit AeroSystems for $4.7 billion: a transaction that it insists will bolster plane quality. Already, a chorus of voices, including many of the families of people who died in the 2018-19 disasters, are criticizing the Justice Department settlement. Former Labor Secretary Robert Reich lambasted Boeing as a “sh—y company.” Reich’s scathing remarks on social media encapsulate the widespread disillusionment with one of the America’s storied enterprises: “Boeing’s descent reveals everything wrong with American capitalism today.”      

The Investment Banking unit, which sits within DBS’ newly formed Global Financial Markets group, has already marked a stellar year, further solidifying the bank’s capital markets presence in key regions like Singapore, mainland China, Hong Kong, Indonesia and Thailand.

Despite a challenging period for the markets in the past two years, DBS witnessed a remarkable rise in its equities capital markets franchise. Its Hong Kong market share surged from a mere 0.2% in 2021 to an impressive 6.7% in 2023; Indonesia’s share jumped from 2% to 8.8% in the same period. Notably, DBS was instrumental in Indonesia’s two largest IPOs last year, Amman Mineral and Trimegah Bangun Persada—both pivotal to the electric vehicle battery sector.

So far this year, DBS was the joint bookrunner for two of the largest ECM deals in Singapore: the follow-on placements of Frasers Centrepoint Trust (US$200 million) and Digital Core REIT (US$120 million). Both placements were meaningfully oversubscribed and remain the only ECM deals in Singapore year-to-date to have raised over $100 million.

Read on as we delve into Karoonyavanich’s insights on navigating the dynamic capital markets, DBS’ strategic initiatives and the outlook for key financial markets in Asia.

Global Finance: You’ve been with DBS for almost 10 years, what were the standout moments, successes or trends that you noticed throughout that time?

Art Karoonyavanich: Over the past two decades, Singapore has done a tremendous job in building the REIT market and ecosystem to become the largest REIT market in Asia ex-Japan. DBS was the pioneer in the early 2000s. By the time I joined the firm in 2015 and onwards, we saw a pickup of issuers from elsewhere across the globe looking to access the REIT market in Singapore. We had a diverse group of sponsors — with assets from the US, Europe, China and Japan, across segments such as data centers, logistics, offices and retail — calling the Singapore Exchange home.

GF: Did the recent real estate downturn in China affect DBS’ business in Singapore?

Art: Singapore wasn’t so affected because the exposure to real estate in China was minimal. REITs in Singapore are much more diversified and are backed by high-quality sponsors. While there was some exposure in China real estate for the REITs here, much of the downside was contained. In fact, certain REITs have gone on to do extremely well, including the ones in the logistics space or data centers that may not have much exposure to China. Hopefully, in China, the policies that they are rolling out will quickly revive the sector.

GF: Which areas of focus has DBS grown?

Art: Besides bringing REITs and business trusts to Singapore, we also spent time building our regional equities footprint. One market where I was hired into was Hong Kong, where a lot of Chinese companies were listing. We’ve been involved in many landmark transactions over the years, offering our entire product suite to clients and guiding issuers. In 2017 and 2018, we saw China continue to open up. As a bank, getting our foothold in onshore investment banking, equities and debt became more important. By 2019, we started to prepare ourselves to get a securities license on-shore in China and quickly build a team on the ground in Shanghai. DBS Securities China was officially launched in mid-2021.

GF: Was the timing of that initiative challenging?

Art: It was right in the middle of the Covid-19 pandemic. The transactions that we were working on to list in Hong Kong for Chinese issuers required us to be present onshore, hence making that investment and being on the ground with our clients in China helped a lot. With our bankers on the ground with the ability to do onshore and offshore deals, this allowed us to be much more flexible. From 2021 onwards, we were able to have more feet on the ground, reach more clients and provide them with solutions and support. That positioned us to help them raise capital.

Southeast Asia has grown in importance over the last several years. In Indonesia, for example, we’ve been able to double down on another core market for DBS and build a large capital markets presence there.

GF: Global IPO and M&A activity have been dismal. How have higher interest rates affected ECM activity in Asia?

Art: ECM volume in Hong Kong for 2021 was north of US$100 billion. Fast-forward to today, ECM volume in Hong Kong for the first quarter was just over $1 billion—a huge drop-off. You can attribute the slowdown, in terms of issuances across Asia, to a lot of factors. One big factor is a lack of risk appetite from investors. Another big issue is interest rates. When interest rates are lower, investors deploy capital or liquidity into riskier assets. 2021 was a good year; while 2022 and 2023 were slow, with a bit of a carry through from that in 2024. That said, in the last few weeks there has been a pickup of investors coming back to buy Hong Kong listed stocks. The Hang Seng surpassed the 18,000 points mark, extending gains. So, there’s a bit of momentum coming back into the overall market.

We’ll start to see some more capital or equity fundraising from REITs in Singapore later this year, which will help bring new equity capital back into the market. A couple of transactions were done earlier this year, including two REITs that raised acquisition-related capital in a secondary fundraise. In the near term, with rates having more or less stabilized, issuers are starting to position themselves again to raise capital.

GF: Where else has there been a pickup in activity?

Art: Over the last 18 months or so, there’s been a big push in terms of capital being deployed in India. It’s catching the wave. As indices continue to do well, and new issuers come to market, a lot of money is flowing into that market.

GF: Were you inspired by the recent election results? (In April, Prabowo Subianto was formally confirmed as Indonesia’s president-elect; he will take office in October.)  

Art: With the elections completed, we expect a pipeline of issuances to come back to the market by the end of this year or early next year. We see the progression of the capital markets build out in Indonesia to continue going forward.

GF: What about Thailand?

Art: In Thailand — being the most liquid equity market in Southeast Asia — we anticipate that the issuance market will rebound now that the country’s elections have concluded. For those two big markets — Indonesia and Thailand — deals will ultimately come back.

GF: How is DBS positioning itself for future growth and to help clients capture more opportunities?

Art: As risk appetite returns, corporates from other parts of the region, including China, will look to diversify and expand into Southeast Asia. Singapore is a natural landing point and because DBS is entrenched in Singapore, it’s a natural conversation that we have with a lot of our clients. We will continue to look at how we can help companies raise capital here. I think that that trend will continue.

Institutional demand for well-sponsored REITs with strong fundamentals will return. This demand will help support REIT equity fund raising plans to opportunistically fund acquisitions of good quality assets, which there are opportunities for now.

Eventually, we’ll also see follow-on issuances and quality IPOs return in Hong Kong, and a growing interest for secondary listings in Singapore from businesses seeking to expand their operations in Southeast Asia.

Among equity market league tables, we continue to be the top bank in Singapore. Last year, we were ranked fifth in Hong Kong and we’re number two in Indonesia. We will continue to be consistent in those key markets and help clients there because there’s a large number of them that will need equity capital as the market recovers in the next 12 to 24 months.

The rival quarterbacks, now retired, are emerging as likely bidders just as the NFL reevaluates its strict ownership rules.

For years, the NFL stiff-armed private equity firms that wanted a seat at the negotiating table. It also banned public corporations and sovereign wealth funds. And it required a team’s primary owner to hold at least a 30% stake in a franchise.

When NFL Commissioner Roger Goodell asked a committee to vote on tweaking those rules last month, a Who’s Who of NFL owners gathered in Nashville, Tennessee: Clark Hunt of the Kansas City Chiefs, Robert Kraft of the Patriots, Arthur Blank of the Atlanta Falcons, Jimmy Haslam of the Cleveland Browns, and Greg Penner of the Denver Broncos.

But they delayed the vote. Goodell subsequently confirmed, cryptically, that the group expects “something” by the end of 2024.

Specifics still need to be ironed out. How large a stake could a private equity firm buy? How many teams could a single firm invest in? How many firms could invest in one team? The answers remain unknown.

Several firms are reportedly discussing the change. They include Arctos Partners, Ares Management, Avenue Capital Group, the Carlyle Group, and CVC Capital Partners.

The private equity industry, which counts Manning’s Brand Velocity Group, has some $4 trillion in so-called dry powder at its disposal. Proponents of the rule changes argue that the new money could back large projects, like new stadiums.

Owners also think selling minority stakes to private equity firms—commonplace in other sports—could mean quicker exits and less tax. However, in recent years, the NFL has kept several deep-pocketed private equity investors on the sidelines.

Apollo co-founder Josh Harris offered to buy the Washington Commanders for $6 billion. There was also José E. Feliciano and Behdad Eghbali (founders of Clearlake Capital Group), who lost the Broncos auction to Walmart heir Rob Walton, for $4.65 billion. And Ben Navarro lost out on the Carolina Panthers to billionaire David Tepper’s $2.3 billion offer.

Editor’s Note: This article previously reported that Clearlake bid on the Broncos. This has been corrected.

But while patrons gorged on shrimp, they snubbed other seafood items.

The splashy marketing ploy scalded Red Lobster. It ended up losing more than $11 million in just three months. But the popular casual dining chain was already struggling, CEO Jonathan Tibus noted in the bankruptcy filing.

When Thai Union was a 49% stakeholder, it muscled out rival shrimp suppliers and inked an expensive—and more exclusive—deal for itself. This left Red Lobster, founded in 1968, with “burdensome supply obligations,” Tibus said.

But a private equity firm’s tactics had a hand in Red Lobster’s demise, too. In 2014, Darden Restaurants, which owns Red Lobster, Olive Garden and several other chains, sold off Red Lobster to Golden Gate Capital for $2.1 billion.

Golden Gate funded the acquisition by selling Red Lobster’s real estate as part of a sale-leaseback deal. This forced the chain to pay exorbitant rent on what Tibus called “a bloated and underperforming restaurant footprint.”

Red Lobster sank, Tibus explained, due to a decade of “failed or ill-advised strategic initiatives.” It has also cycled through five CEOs since 2021.

Thai Union, a Thailand-based owner of seafood brands including Chicken of the Sea, has since given up its stake. Golden Gate exited Red Lobster in 2020. 

Today, Red Lobster is saddled with more than $1 billion in debt but less than $30 million in cash. A “stalking horse” bid is reportedly in place. The hope is that the bankruptcy court discards some 100 leases and shutters a large portion of its restaurants. Tibus, a corporate restructuring veteran, has helped a long list of eateries through bankruptcy, including sandwich shop Quiznos in 2014; Ignite Restaurant Group, owner of Joe’s Crab Shack in 2017; Chevy’s parent company, Real Mex Restaurants, in 2018; Kona Grill in 2019; and fast-food joint Krystal in 2020.