TMF Group announces 2021 full year results
TMF Group, a leading provider of compliance and administrative services, serving 8,000 clients in more than 85 jurisdictions, announces its full year results for the year ended 31 December 2021.
TMF Group produced a strong performance in 2021 as it delivered on its mission to become the way for clients to invest and operate safely around the world:
- Revenue growth of 8% to €650 million (2020: €6031 million)
- Adjusted EBITDA growth of 15% to €199 million (2020: €174 million)
- Lock up down by 9% to 63 days
- Investment in digitisation up by 38% to €29m
- Client satisfaction (NPS) up by 33% to 48
- Employee engagement up by 2% to 65%
Revenue growth in 2021 was largely organic, driven by a focus on serving and growing with existing clients as they consolidated more of their needs with TMF Group. At the same time, TMF Group grew fast in fund administration, strengthening its funds platform through the acquisitions of Selectra in Luxembourg and VBO in US.
EBITDA growth outpaced revenue growth, reflecting the simple operational leverage coming from more revenue being added to a relatively fixed global management structure. Alongside that a lot of improvements in delivery took place. Those include several hundred additional roles in regional delivery centres and several thousand users of our global orchestration tool, which will lead to even higher quality service and greater efficiency in 2022.
Clear and compelling strategy
TMF Group provides critical legal, financial and employee administration to many of the worlds’ leading funds and corporates. It plays a key role in client governance by ensuring that client entities around the world are operating efficiently, correctly and compliantly.
TMF Group is one of the largest players in its sector, yet has just 3% share of what is a very fragmented market. That reflects the fact that clients have historically had to patch together coverage via many local firms to manage their administration. TMF Group’s aim is to give clients a simple, single, trusted global solution. Its investments in global service teams, global digital delivery and data insights give clients a strong control benefit from consolidating their administration with TMF Group. In 2021, TMF Group launched TMF KRAIOS, its new digital interface for clients that gives them access to data, regulatory monitoring and other risk insights.
As a result of that focus, TMF Group’s new business in 2021 was 39% up on 2020. That includes a number of totemic wins where TMF Group was appointed by leading asset managers and corporates to be their global partner for managing their SPV portfolio. Typically around two thirds of the revenue from new business begins in the following year, pointing to strong momentum heading into 2022.
Investing in people
TMF Group is a technology-enabled service business. As such, its client care and performance rest on talented, engaged employees. Employee engagement has risen at TMF Group during the Covid-19 pandemic, with actions to improve career opportunities through internal promotion, the associated build of the TMF Academy, and a rapidly growing bonus plan.
Becoming a key part of client governance
TMF Group plays the role of first line of defence for its clients and regulators, ensuring that the right kind of business is done in the right way. As such ESG, and in particular strong governance, is key to TMF Group’s proposition.
TMF Group achieved a silver medal rating by Ecovadis for ESG, coming in the top 2% of legal and accounting firms for ethics. The firm also invested in new tools for regulatory monitoring and for entity risk benchmarking to help improve its governance capabilities for clients.
A resilient business model
TMF Group provides critical services in locations where the rules are complex, where clients lack scale or where their investment flows are large. As such, TMF Group has 95% recurring and reoccurring revenue. That allowed TMF to grow in 2020 and again in 2021 against the backdrop of a global pandemic.
Russia and Ukraine
TMF Group has an office in Kyiv employing 57 Ukrainian nationals. A number chose to be relocated before the attack by Russia began and are safe and well, working from TMF Group’s Warsaw office. Support is being provided to those choosing to stay in Ukraine and the firm is in regular contact with them to check on their wellbeing.
TMF Group acts as the first line of defence for its regulators, ensuring that the standards they set for those investing and operating in their jurisdiction are met. TMF Group’s global compliance team is monitoring and acting on sanctions against Russia as they emerge. All services to newly sanctioned individuals and clients are immediately frozen pending discussion with TMF Group’s regulators on the appropriate course of action.
Given the complex interplay between individuals, institutions and government in Russia, TMF Group has decided to exit all work for clients with a Russian UBO. That decision will now be worked through our global offices. Separately, TMF Group has offices in Russia helping our North American, European and Asian clients operate there and will continue to maintain services to them, reflecting their dependency on TMF Group as a provider.
2021 was a pivotal year in which our focus on becoming a single, global partner for our clients started to come good. That points to a high growth future for TMF Group. We are a service business reliant on our people around the world for their daily care of our clients. In that context, my thoughts at this time are with our people in Ukraine and the extraordinary support being provided by their colleagues in neighbouring countries. A few years ago, we made integrity one of our five values for TMF Group. Our decision to stop serving Russian UBOs shows that we will live those values, even if it carries a cost to us.
We finished the year ahead of forecast, marking eight continuous quarters of revenue, EBITDA and cash growth. We are in a high recurring revenue, highly predictable business and set a lot of store in living up to our commitments. We enter 2022 in great shape with a tailwind from 2021 sales growth, higher colleague and client engagement and the operational leverage from putting more revenue into our global delivery engines.
While the Russia – Ukraine conflict will impact the global economy and therefore the markets in which TMF Group operates, our business model is resilient and we expect the conflict and our decision to exit Russian UBOs to have a limited impact on performance.
Download the full report and read more on our performance.
Giampaolo Arghittu, Senior Global External Communications Manager,
T: +39 334 947 95 84