Global Trust and Corporate Service Market (by Alternative Asset, Segment, & Region): Insights and Forecast with Potential Impact of COVID-19 (2023-2028)

Global Trust and Corporate Service Market (by Alternative Asset, Segment, & Region): Insights and Forecast with Potential Impact of COVID-19 (2023-2028)

Market Insight:

Trust and corporate services offer a wide range of administration services to help clients set up, structure, and manage their financial and investment decisions. The trust and corporate service market is primarily focused on stable countries with stringent regulations.

A highly qualified workforce, high-value services, personal relationships between clients and service providers, and increased globalisation have all fueled the market. Rising household wealth, increased corporate and tax regulation, and increased outsourcing of administrative services by private equity and real estate funds are expected to contribute to market growth in the coming years. The global trust and corporate services market value is expected to reach US$11.96 billion in 2023, growing at a CAGR of 4.98% over the projected period.

Segment Covered:

• By Segment: In terms of segment, the report offers insights of the trust and corporate services market into four segments: Corporates, Funds SPV, High Net-worth Individuals, and Others. Corporates held the largest share of the market, whereas funds SPV is expected to be the fastest-growing segment in the forthcoming years. The demand for services by corporates has continued to rise in the past few years due to the high value-added administrative services and widely needed support services provided by trusts and corporate service providers, such as business advisory services and compliance services. Funds Special Purpose Vehicles (SPV) have thrived over the historic period owing to global economic expansion and increased globalization, which urged the necessity for outsourcing fund administration along with the basic trust and corporate services and inclined the demand for funds.
• By Alternative Asset: The report also provides the bifurcation of the market on the basis of alternative assets. Alternative assets typically refer to investments that fall outside of the traditional asset classes commonly accessed by most investors, such as stocks, bonds, or cash investments. A surge in the global alternative assets market is attributed to the high performance of capital markets driven by accommodative monetary policies and substantial GDP Growth.

Geographic Coverage:

According to this report, the global trust and corporate service market is divided into five region namely, North America, Asia Pacific, Europe, Latin America, and the Middle East and Africa. The countries covered in North America region are the US, Canada, and Mexico, while Europe includes UK, Germany, France, Italy, Spain, and Rest of the Europe. Moreover, China, India, South Korea, Japan, and Rest of Asia Pacific are included in the Asia Pacific region.

North America held the major share of the trust and corporate service market. The robust tech sector fueled powerful wealth performance. Thus, the increase in the HNWI population is expected to positively contribute to the demand for trust and corporate services. Asia Pacific is expected to be the fastest-growing region in the forthcoming years. In coming years, private equity and real estate funds are expected to see strong demand for trust and corporate services because of their industry’s growth and the increasingly complex reporting requirements that spur outsourcing of fund services. In addition, the increased need to comply with regulatory requirements is one of the key drivers supporting the trust and corporate service market growth in Europe. In the European trust and corporate service market, the UK held the highest share of the market and it is also expected to be the fastest-growing region in the forthcoming years.

Top Impacting Factors:

Growth Drivers

• Growing Global HNWI Wealth
• Growing Opportunity in Pension Asset
• High Client Retention Rate
• Increasing Number of Sovereign Investors

Challenges

• Unstable Globalization and FDI
• Failure of Client Relationship

Trends

• Modifications in Regulations
• Political and Economic Ambiguities
• Improvement and Advancement in Technology Infrastructure
• Strong Culture of Excellence
• Driver: Growing Opportunity in Pension Asset

The industry is likely to be primarily motivated by governing alterations in both developed and developing markets which are in quest of getting more of their labor forces under defined contribution retirement plans. This upcoming financial segment, united with increasing levels of trust and corporate service outsourcing, is expected to create a great opportunity for various players to participate and generate new client profiles from exposure to another end market which is expected to enjoy structural growth.

• Challenge: Unstable Globalization and FDI

With the introduction of globalization, many commonly accepted and well-integrated policy frameworks and organizational structures have emerged. This has increased the inflow of foreign direct investment globally. But during the past few years, foreign direct investment has been displaying a fluctuating trend. The trust and corporate service marketplace is always compelled by increasing globalization and foreign direct investment. With fluctuations in FDI inflows, the trust and corporate service-providing organizations may observe certain challenges in the expansion of their business in their home countries as well as outside the home countries. Hence, if the FDI net inflows continue decreasing, trust and the corporate industry may face a major growth barrier during the forecasted period.

• Trend: Political and Economic Ambiguities

Both political and economic uncertainties are visible across the global landscape. Owing to these fluxes, the number of clients (from organizations, and companies to individuals and HNWI) in the requirement for trust and corporate services are also increasing. Considering the recent scenario, clients are demanding secured and innovative solutions for their wealth management. Furthermore, in the present situation, high net worth individuals (HNWIs) possess their assets across boundaries, and with the rise in political and economic instability across the world, it enhances the capabilities of the market to provide a wide range of solutions to allocate the HNWIs' wealth. In a nutshell, the market is anticipated to perceive an increased demand for their services to satisfy complex client needs.

The COVID-19 Analysis:

The COVID-19 pandemic has led to a considerable decline in business activities and hence a decline in the income of individuals. Therefore, demand for trust and corporate service providers observed a hit as the numbers of high-income-generating individuals plummeted. This has led to a slowdown in the demand for experienced personnel’s needed for the management of finances such as structuring of their wealth, tax fillings, administrative services, and much more, thus hampering the overall growth of the market in 2020. However, the market experienced growth in 2021 with a gradual resumption of business activities as COVID-19 cases declined.

Analysis of Key Players:

The global trust and corporate services market is highly fragmented. The key players in the global trust and corporate services market are:

• TMF Sapphire Midco B.V. (TMF Group)
• M&T Bank Corporation (Wilmington Trust)
• Intertrust Group
• Tricor Group
• JTC plc
• American Stock Transfer & Trust Company, LLC
• Cafico International
• Apex Group Ltd. (Sanne Group)
• IQ EQ Group Holdings S.à r.l.
• Vivanco & Vivanco
• Ocorian
• Vistra

Some of the strategies among key players in the market are mergers, acquisitions, and collaborations. For instance, in 2022, JTC announced that the company had completed the acquisition of New York Private Trust Company (“NYPTC”), a Delaware-chartered non-deposit trust company. On the other hand, TMF Group announced the acquisition of Etive Consulting, a UAE-based company providing compliance advisory, governance support, and AML services, among others.