JTC Group’s offerings range from fund administration to tax-compliance services
Rupert Hargreaves Investment columnist
JTC Group (LSE: JTC) appeared on my radar screen two weeks ago when the company announced the acquisition of the First Republic Trust Company of Delaware, a subsidiary of JPMorgan Chase (JPM). JPM acquired the Trust Company as part of its rescue of First Republic Bank in May 2023. JTC offered $21m for the firm, which has $9bn of assets under administration and a dedicated team of trust professionals, all with significant expertise in the trust-administration market.
What attracted my attention to this deal was the fact that JTC, a British firm, was buying a business from a large US financial institution. Usually, it’s the other way around. Recently, the flow of deals between the UK and US has been a one-way street. However, JTC’s trade was one of just a handful of recent deals that have bucked the trend. So what was the company’s secret?
Defensive markets
Unless you work in the world of finance, you are unlikely to have heard of JTC. The best way to explain what it does is to look at its two main divisions: institutional client services and private client services. The institutional client services arm, which generated revenue of £163.3m for the group last year, offers services such as open- and closed-ended fund administration as well as corporate and trustee-administration services.
The other arm, private client services, serves the ultra-high net-worth (UHNW) market. Bringing in revenue of £94.1m last year, the private client arm offers services such as tax compliance, UHNW private office administration, and foreign-exchange services. JTC estimates the total addressable market (TAM) for these services (private and institutional) could be as much as $12bn (£9.7bn) a year. TAM figures are always worth taking with a large pinch of salt as they are estimates, and companies tend to inflate the numbers to look better to investors. But JTC only generated £257.4m in revenue last year, implying that even if its TAM figures are wildly off target, the group still has many years of growth ahead of it. Note too that the markets JTC’s two arms operate in are both relatively immune to economic cycles and interest rates.
The FTSE 250 company, worth £1.4bn, already has an impressive record. Over the past 37 years, it has grown from a start-up into a world
