Monday 20 February 2017 by At FIIG

Meet the team – John O’Dowd

Much goes on behind the scenes at FIIG. Here we interview John O’Dowd, who has a busy and sometimes stressful role as Head of Custody, but also a wealth of industry experience

john o dowd

Thank you for allowing us to talk to you John. Could you tell us a bit about yourself?

I work in FIIG’s Brisbane office as Head of Custody and have over 30 years industry experience. Previously I held a number of senior operational and middle office roles in Australia, Singapore, New York and London working for Merrill Lynch, Citi, Aspect Capital and QBE Group Investments. This is my first job in Brisbane, having moved my family from Sydney in September 2015 when I first joined. 

In a sentence, how would you describe your role?

I’m the guy whose sole job is to make sure clients get paid and their assets are protected.

John, custodial services are quiet achievers – if everything goes well, no one notices. But if things go wrong everyone points the finger. Can you please shed some light on what you and your team does?

I am responsible for managing all the operational controls in custodial services. My teams settle trades, makes payments and receives funds from clients, perform cash and position reconciliations with our sub custodian, reconcile and process coupons (interest payments) and other corporate events. I oversee this, and make sure that the data is available for accurate statements and other reporting. All of our operational controls are also validated yearly through a GS007 audit performed by PwC. 

Custodial services are, in a sentence, “the protection of client assets”. What happens is a client buys a bond from a dealer. Once the deal is done, then that transaction moves away from the dealer and to us. The client pays money into a trust account with us, and then holds that bond. We act as the custodian, and JP Morgan – one of the world’s largest global banks – is the sub custodian.

So you’re like a safeguard for a client’s assets?

We are. It’s actually called “safe custody”. The bond(s) are held in safe custody and protected, regardless of outside circumstances – they’re completely separate to FIIG’s assets as a business. As part of that bond being held in custody, we also look after associated income, such as coupon payments.

My team processes bond coupons every day. When a coupon comes up, we receive that money into a coupon trust account and then pay out the client who is the beneficial owner. At the moment, about 6,200 clients use our custody service.  

Why JP Morgan as sub custodian?

A client’s assets actually physically sit with JP Morgan, somewhere in the world, as they are one of the world’s largest global banks. They work with me and my team to, as you said, safeguard the client’s assets while giving us the ability to enter into pretty much any market globally.

For example, if we wanted to start trading in Japan, or Hong Kong, or Canada or New Zealand we have the potential through JP Morgan to do that, since their scope is so wide.

How much money do you and your team manage, on average?

We’re managing $3.2bn of assets under custody. On any given day, we deal with upwards of 200 settlements across Australia and internationally; we’re probably processing anywhere from five to 30 coupons, which expands to anywhere from 100 to 2000 individual coupon payments.

Those figures are quite substantial. How do you keep on top of it all?

There are a large number of operational controls in place to ensure that the day to day running of the custody team is compliant with our ASIC license obligations. These include (but are not limited to) segregation of duties, daily cash and custody reconciliations, minimum two step approval process for all cash payments, monitoring of failed trades, management of corporate actions and income and management oversite, and sign off on all reconciliations and key control functions. We also use daily control checklists with management sign off to ensure all tasks are effectively completed on a daily basis.   

What are your best memories of the time you spent internationally?

I have been very lucky to work in Singapore, New York and London. Working in both New York and London – for a total of 15 years – was very challenging but in a very positive way. I now live in Brisbane but have also lived in Sydney and Melbourne.

I understand you were living and working in London during the GFC?

I was working for a large hedge fund in London during the GFC where I was responsible for the operations’ teams as well as firm wide operational risk. The best way to describe it was very stressful. We traded equities, fixed income securities, exchange trade derivatives and FX, so there was a very broad range of risks that needed to be managed. The almost overnight change in banking, other counterparty risk and how credit was viewed and managed was the biggest challenge.         

What attracted you to FIIG and the world of fixed income?

The ability to provide fixed income products to a very broad range of different clients and not just institutions was a key driver. I like that we have broader range of different products and services – not just bonds – offered through our Debt Capital Markets, Managed Income Portfolio Service and Short Term Money Markets teams.  

Thinking outside the (work) box now – what are your hobbies?

I spend a lot of my time driving my two teenage daughters around Brisbane (most parents can relate to this). Apart from that, I like watching most sports and more recently started doing some running again to try and stay fit.     

What’s your favourite movie and book at the moment?

My favourite movies of all time are Life of Brian and Pulp Fiction. More recently, I thought Michael Keaton was very good in his three recent movies Birdman, Spotlight and The Founder. Most of my reading relates to sport. I’m currently re reading a book that details the rivalry between Sebastian Coe and Steve Ovett in the late 70s and early 80s.

Last but not least – how do you define success?

The definition of success for me is watching people that I have worked with and help develop move on to achieve bigger and better things with their careers.   

John is based in the Brisbane office.