Growing a Bespoke Treasury Team with Dean Byrne

Hello, it's Mike Richards here from the treasury recruitment company. I hope you're enjoying the Treasury Career Corner. If you are great news, perhaps you give us a rating on itunes or wherever you consume your podcast content. This means that even more treasury professionals can benefit from finding out or by finding out about how treasurers have achieved their career goals. The link to rate our show will list at the bottom of our show notes. And please remember as well, the show itself is as much about you as it is about us. There are specific questions you want us to ask or there's feedback you want to give. Please drop me an email. My direct email is mikeresuryrecruitment.com inventibly enough, but anyway, that's enough from me. Let's get on with the show. So welcome to this week's Treasury Career Corner podcast where I interview treasury professionals about their treasury careers, how they got their first start in treasury, where they are now and where they see both themselves and the treasury profession. Going to next this week's show, I'm delighted to be joined by Dean Byrne, the Group Treasurer at JLT Group. Jlt, or Jarli Lloyd Thompson Group, is a British multinational corp. They have headquarters in London, England. They provide insurance services, reinsurance, employment benefits advice and brokerage. And they're a constituent of the FTSE 250 top 250 companies in the UK. Dean's a career long treasurer with experience a number of sectors including manufacturing, shipping, logistics and more recently financial services, insurance. But what I want to do as I do all the time, is, you know, take Dean back to the dim distant past. We will start with how Dean got his first start within treasury as a Treasury Assistant at the London Clearinghouse. His progression through to his current role as the Group Treasurer at jlt. Dean, take us on the journey and how far back do you think we should go?

Thanks very much, Mike. I mean, that's a bit of a loaded question really in terms of how long, how far back do I go? So my career started with no real kind of plan to get into corporate Treasury. I mean, it was a chance introduction to a job. I left school after my A levels. I was looking for my first job, hadn't given a lot of thought particularly to what I was going to do longer term. And it just happened that I found myself at an interview for a role as Treasury Assistant, as we called it back then, with what was then known as ICCH or the London Clearinghouse, and again, very much a chance landing offered the job in the Treasury Department as such, which was Then responsible for calculating positions for the various commodity and financial futures brokers in the city. Margin calling, funding and you know, I had a couple of years there which was a fantastic opportunity to get a good grounding in some of the basics one on in the early embryonic days of some of those markets but also latterly into the what they called the banking section in the clearinghouse which basically dealt with their more wholesale funding dealing with banks and money market lines. My particular role also included going to fetch the sandwiches and making the coffee for the more experienced members of that team. Stayed there for a couple of years and then thought actually quite liked this kind of world. It was interesting, it was finance, but it wasn't accounting. The commerciality of it looked quite exciting. There was a lot going on in, in that world. Moved into my second role at the, what was then the Chloride Group plc. They had a formal corporate treasury department run by one of the very early members of the act. Worked for some great people there. So I went there as a Treasury assistant again actually had a version of a TMS and worked there with an assistant group treasurer, a group treasurer on what would kind of become a fantastic grounding in cash management, early netting, foreign exchange management. And I spent three years actually at Chloride kind of learning really the basic in a kind of proper corporate world. I mean Chloride back then was a much bigger kind of more established blue chip plc. And then an opportunity came along for me to move up to another kind of level within a team in a. In a more of a startup situation. So I left to join Air plus, which I think most people recognize now as a T and E card program for a number of the airlines. But back then this was a startup by British Airways to establish a competitor for American Express and Diners Club. So there was some really interesting treasury challenges that came along with that. In terms of international funding, that program would be managed from a financial operations perspective but some interest in foreign exchange implications come along with that. It was exciting to start up. I was quite young, it was international and I stayed with them best part of four or five years having a really interesting time, a lot of travel time to get back into a more formal or more traditional corporate treasury role. So I joined in 1991 I joined EAC or the East East Asiatic Group, which was a Danish multinational with a big shipping operation as divisional treasurer to effectively build a Treasury function for the group that would underpin, you know, an international container shipping line. I mean it was really around kind of getting the basics kind of tied down around first of all, you know, the cash and liquidity for the group to negotiating banking arrangements, cash pooling, all of the kind of things that you'd expect with a, a corporate treasury team. EAC decided that they were going to divest that business to Maersk A.P. muller. So essentially, you know, I faced an uncertain future at eac. Opportunity came back kind of strangely enough and you never know what might kind of turn up one morning to go back to Chloride. So Chloride were looking for a Treasury manager. I mean the group had shrunk a little bit. They repositioned themselves from there. I would kind of lead acid, lead acid battery manufacturer and other electronics into a provider of UPS equipment, standby power supplies. So they'd repositioned the business quite successfully and they were looking for someone to head their treasury function. I guess the fact that I'd been there before picked their interest. But I went and had a chat with them. They were looking to kind of move their treasury function on a bit. And so I decided, you know, to do something I thought I wouldn't do which was kind of almost go backwards. Stayed with them actually for about four years working you know, with them as they kind of went through a slight expansion program. Having repositioned the business and that, you know, position was your classic treasury manager's role. Had a, had a really interesting kind of role there actually. I mean, you know, the group, the group I felt I'd taken the role as far as I wanted to take it. Wanted to move my next role. Opportunity arose to go to Tenneco. Joined Tenneco as assistant treasurer and their London or their international treasury was based in London in the uk. I mean by this time Tenneco had kind of been through a bit of a reshaping. They were an automotive component and packaging manufacturer, had quite a sophisticated treasury function, based in London which basically ran their international cash management, their cross currency pooling netting system and reported into a US corporate treasurer.

It was actually a us.

It was a US conglomerate. Yeah, yeah. Based in Delaware at the time. They'd been through a kind of navel gazing exercise I guess around where they wanted to restructure until I kind of went on a summer break about four years into the role and about halfway through my summer break it was actually about have a family barbecue. Got a phone call actually from someone who said, had some kind words said about me and asked me if I was interested in a role with Williams holdings, which was a group treasurer's role. Williams were going into the process of a demerger. They basically had A fire protection business and a security business. They'd been a very large UK conglomerate and they were looking at the merging into the two businesses which became Kidder PLC and Chubb plc. Looking for a group treasurer for one of those businesses. I went to have a chat with them. Within a day or so they come back to me and offered me the role as group treasurer of Kidder plc, which was an interesting conversation. When I went back to my job at Tenneco on the first Monday after my holiday where I found myself in a situation where I was resigning from a role and the treasurer there was telling me that she was about to go on maternity leave. So that was all a little bit of an inconvenient discussion. Well, I joined Williams and worked with them for a six month period on the demerger planning. I mean, one of the key challenges there was looking at how the two businesses would be financed. So they entered into a syndication process which unfortunately one of the challenges in that syndication process was that they hadn't made participation in the credit facilities of both businesses on an independent basis, contingent on being in the deal at all. So unfortunately they had a situation where lots of the banks went into one company and left the other one slightly underfunded. So one of my first challenges as group treasurer of Kidder was to prop up their syndicated rcf, which was bit of an eye opener in terms of how to kind of not do a demerger. So joined Kidder, worked with the group FD Kidder to prop up what was a kind of, you know, a challenging financing. Not because the business wasn't a good proposition, it's just that, you know, the capital appetite of, of the banks was really targeted on an exposure to one of those businesses. But we developed great relationships, actually came out of that, so successfully pulled that together and then worked to build a Treasury function at Kidder PLC as a new business which had previously been a divisional business.

And how big was the treasury team there?

Or five people or so, wasn't a huge team, but hired some good people, worked with some, some, some good banks. We put some systems in, covered all the basics, cash management, you know, got to know, you know, the businesses that, you know, made up that group and developed, I think, what was quite a well regarded function internally by kind of embedding it as actually, you know, part of the business. You know, that's about really seeing treasury not as a kind of isolated corporate function, it's about seeing treasury as a support to the business that can add a value, add.

How long have you been there at Kidder?

I spent five years at Kidder, Mike to 2005. So 2005, United Technologies Corporation, big American kind of Goliath UTC. Basically they'd acquired the Chubb business which had kind of split out our sister company about 18 months before. And ironically as these kind of things go in investment banking and the city came on board Kidder and put the two businesses back together again. So it was the reunion of the old Williams businesses. But as part of that process I worked with UTC to transition. I had a couple of other opportunities come along during that process, but the acquisition basically crystallized an exit for me from, from Kidder plc. I had had a couple of opportunities and I was, I was offered a role with another traditional kind of manufacturing, FTSE plc, which I'd been minded to, to accept. And then kind of out of left field came the role at jlt. So I didn't know I'd never worked in financial services before as kind of you would know it now, certainly not in the insurance world or for an insurance broker. The role at JLT came along, I came along, met the folk at jlt. There was an established function here. It wasn't particularly big function, but the company wasn't in the same shape or size it is today. I thought it would be a really interesting thing to do and learn what a corporate treasury could do for a business like this.

Big shift from traditional industrial corporate to financial services. Sort of regulation regulated?

Oh, absolutely, yeah. I mean, JLT was a kind of combination of a number of businesses. It was a specialty insurance business which kind of deals with high end kind of risks for large corporates, the aviation market, marine market, financial services. There's a reinsurance business, there's an employee benefits business which is basically, you know, an admin provider for big pension schemes and also has a consultancy which advises on pension scheme kind of risk management and those kind of things.

When you started out though, it wasn't quite like that, surely. I think when we first used to speak about the role it was a bit more traditional insurance and then those sort of things came on board. Or how would you describe the small business?

Well, it was more traditional insurance in the context of the, I mean the reinsurance piece was a, was a growing piece. There was a wholesale insurance broking business but in essence it was a, you know, an international insurance broker that dealt primarily with corporate clients and had, I mean, from a Treasury perspective, kind of some very interesting challenges. With regulation came a lot of risk and compliance considerations, client money on the face of it their business was a business of a size in terms of fees and commissions. But actually the fiduciary client money aspect of it was really interesting in terms of the investment of those funds which all sat within treasury and regulatory capital requirements, liquidity requirements and how it was risked, et cetera. This was kind of all fairly new to broking, but also fairly new from a Treasury perspective. So that's the big difference between if you're thinking about cash management, risk management, funding that you might kind of encounter. Whereas traditional treasury function, traditional corporate, it's quite different. And a lot of, if you think about how treasury sat back then, I mean I'm talking, I mean I came in 2000, 2005 and thought that I would maybe stay four or five years and I'm here 14 years nearly later. You kind of have to kind of wind the clock back and think about what it looked back then was a small function wasn't, you know, it was certainly a corporate level function, wasn't necessarily embedded across the business. There was a lot of treasury activity that kind of sat outside treasury within the businesses and a lot of, I guess historic kind of practices around a broking business that people would kind of explain with the introduction. It's very complicated. There's a lot of barriers to break down in terms of how you might transition what is essentially a cash management function with a bit of risk management bolted on into a, if you like, what I thought ought to be a full service treasury team in a business which was, had been quite challenged. I mean the business had gone through some management changes, had issued a profits warning. I mean, you know, a number of people that I spoke to at the time about should I do this or should I do something else had said to me that you know, you must be mad or that's a big risk. And I thought well yeah, but it will be interesting and you know, I can always do something a bit more boring later. So I came to JLT and yeah, I mean been a fantastic, it's been a fantastic business from a Treasury perspective. It's been, there's been some really interesting challenges along the way.

I would say when you've brought people into the function, as you say.

Yeah.

What have you said to them about, you know, I, why would someone come in and join JLT Treasury? You know, what is it about it for people's treasury careers? Maybe junior guys or mid level guys, they coming in, it's different but it's financial services treasury, is it? Or how would you describe it to those guys?

Some of it is very consistent with the kind of challenges you'd expect in any business. There's a balance sheet capital structure to be thought about in terms of how that kind of has evolved with the business. There's been funding requirements over the years. We've gone from a business which historically didn't have JLT has grown quite kind of fast over years through M and A. Most of that has been either financed through our own cash resources or through debt. So we've gone from a business which had no debt at all to a business which has geared up to an appropriate level of net debt in terms of its balance sheet. And that's for a cash generative business. Then that's all been kind of self and reinvested. So if we think about all the kind of the usual kind of challenges that you might find in our business, there's funding, there's cash management, there's liquidity, there's the kind of risk management around FX and around interest rates. I mean all of those are the usual challenges that you find in any corporate. It's just that they're kind of driven by different drivers. I mean our business is a people business. From a tangible asset perspective it's pretty light in terms of assets, but it's a cash flow based service business. The challenge business is one, you know, you've got the kind of the dual cash throughputs in the business which would be fiduciary funds and client funds on the one hand, but also the regulatory requirements around how we manage that and then how we extract our own income from that in terms of fees and commissions. And then, you know, that's your kind of traditional corporate cash management challenge. And how do you challenge that? The channel that liquidity up through the group whilst you kind of manage the fiduciary side of the business, which you wouldn't. They'll be financially literate. And then a significant proportion of our UK revenue, I mean, JLT is a global group and we've got businesses from Latin America through the US out through a very strong business across Asia into Australia. So, you know, you've got some really interesting currency exposure challenges. I mean predominantly transactional exposure management. You know, we've been very active around or. One of my early challenges was getting people to think more proactively around how that is managed. So we have quite a proactive hedging program that sits around currency denominated revenues that goes out, you know, three, four years. So in terms of attracting people into the team, the challenge has not been about attracting people into the team. It's been about the people with the right attitude to be in our team. I mean typically JLT is kind of a fast moving place. You never quite know what's going to come across the desk on any particular day. Got to bed that down with all the kind of Treasury 101 things that you need to think about in terms of basic controls, pretty demanding exec management that sits at our board level. I mean it's a busy, fast moving place as you've seen with a company that's grown kind of best part of four, five fold the last 10 years.

And with those people that you're attracting facting in, what are you looking? You know, you've talked about attitude, but what else are you looking for in terms of, you said you're not a qualified accountant, but is that something you look for or what sort of qualifications.

Or varies, I mean, varies, you know, I mean, I think there's a baseline typically. I mean most of the folk in our team have degree educated. It's not exclusively around that. I mean in terms of our core treasury team, you know, we've got a mixture of people that we've kind of homegrown through our grad program or found them in other parts of the business and thought that they've got potential. I think the most important things for us are one is that they're really interested in what they're doing. Commitment, flexibility, silo people, you know, it's not, you don't do one line of work all day long. I mean you're going to expect it to kind of get involved in quite a lot of different things. Now I think that's quite attractive certainly to people who are trying to broaden their experience as they grow in a Treasury team which has become very well established throughout the group. It's certainly a bit bigger than when I first arrived, but it's taken on quite a lot of responsibility and activity from around the group. So we've done our fair share of centralization which has been a challenge. People can be quite parochial about the functions that sit within their individual companies. But we've got to a place now, I think where team engage well internally and externally. You know, it's an interesting, it's been an interesting place to work within a kind of treasury environment and found that people have responded, you know, well to variable kind of responsibilities, you know, and occasionally throwing people in at the deep end and giving them some real challenges.

And you and I have talked in the past, you're slightly unusual in that a lot of Treasury Departments, all for big technology, must get in this big system, must do that. But you've got a much more sort of real world ethos or just explain to the listeners how it's a bit different with you guys, because part of.

It is around the fact that like a lot of broking businesses that's grown through acquisition, we've got some quite bespoke kind of back office systems. I mean, one of the things that we've kind of bolted onto our treasury responsibilities. And I'm also responsible not just for corporate treasury here, but also for some of the financial operating teams that support the UK broking business. For example, which is kind of, you know, credit control functions, we call it iba, but it's basically back office finance operations, but kind of fits straight into settlements to insurance market, which is essentially a cash management function. So we've got some centralized service functions that now form part of the Treasury Group. You know, fitting. The various systems that we've got together don't necessarily lend themselves to a kind of off the shelf TMS package. So, you know, we deal with a kind of. And I think, you know, it's worked for us. We've been, you know, we got a, we've had a project running to look at, you know, taking that to the next stage. But we've automated quite a lot of activity between our back office systems and our kind of banking systems. So it is kind of rather more bespoke than plugging in a TMS that you've bought off the shelf for, you know, developing what is part of your kind of wider financial accounting or financial enterprise system.

Yeah, just expecting it to do everything sort of.

That's right. So, but that, but again that that means. And also, you know, you've got a whole raft of FCA client money regulations that you have to be compliant with around how we handle quite a big balance of other people's money that sits on our balance sheet. So in any one time we'll have a billion or so of what we call client funds that we're investing alongside the funding and liquidity requirements of our own business. So in terms of the day to day operations of our treasury, you know, team, I mean, it's mostly centered around all the things you'd expect to find in a traditional corporate treasury team. For example, you know, cash and, you know, the daily cash and liquidity requirements of the business, how we move money around the group, how we manage our external banking relationships and funding relationships, you know, and we've had to kind of, I think If I was to look back and think about, you know, one of the things that we, that I think I'd be proud of over the last 10 years is how we've built a fan base of debt investors. We've done four private placement issues. We were the first non financial, non bank financial into the private placement market back in 2010 sort of post the financial crisis. We've grown our bank group and our revolving credit facility that supports that, you know, successfully over the years and some great external sustained relationships which has underpinned quite a lot of growth in our business. And you know, the team that, I mean, certainly the current team that we've got, I mean, I've been lucky over years, I mean, you know, I think I've been happy to, very happy to kind of have worked with some great people in the teams I've had here and they have their natural kind of lifespan and people have wanted to move on and you know, take on sort of bigger jobs that might not have been an opportunity within the group. And you know, I've had some great people come through those teams and there's kind of a generational change every now and again and I think that the team, you know, so the current team I think does a terrific job. Part of that is kind of, if you like self grown, part of that you've helped me with over the years. Mike, in terms of bringing in some people, I mean, JLT is not the kind of environment where if you want routine and if you want to, you know, have a nine to five kind of existence, it's probably not the place for you to work as you know.

I think you just described how when I recruit for you, it's like, do you want to, do you want the same thing day after day and nine to five, right, Great. No, you're not good for this job.

You know, that's right. But as you know, I mean, develop some great people. People have gone on to great jobs from JLT and I think that's always an attraction for the candidates who are kind of looking for that kind of role. So I would say to anyone that's kind of out there working in a traditional kind of manufacturing function, be imaginative and explore opportunities in different sectors and don't necessarily kind of be put off by the mysterious world of insurance and insurance broking. It can be really interesting and you.

Talk there about the development of the team and everything else, but with treasury development, that's one of the key things that I've been at so many conferences, spoken to a thousand People this year at different conferences in total and next year we're going to be doing a lot about the future of treasury and stuff, but just taking an eye to the past and as you look at the past, present, future, you joined it, you were strong, operational and everything else, you've seen it straight through process everything else. Where have you seen it go from to and going, you know, the from to future something would you say?

Well, I think it's come from a, I mean if we think about where corporate treasury kind of management from a technology perspective was, you know, back at the beginning of my career, I mean, you know, I remember the days when you know, you kind of have a runner go over to the bank and bring back a printout with the bank balances on in the day. I mean, you know, a big printer that, you know, an online banking portal back in the day was kind of revolutionary and we've gone from there through to, you know, all sorts of opportunities in terms of automation, interfacing. I mean I don't even think that, I mean if I think about, you know, the business that we're in, you know, I think that we've started to move along that path but an awful lot more opportunity for us to get our, to get our hands around in terms of how we, how you automate back office functional systems, you know, from a business perspective into kind of a front end treasury world, you know, where you know, you're taking out your kind of manual intervention, you know, all the way along the chain. And then of course there's the, the big challenge of that is achieving that with, you know, the right level of control because you know, from a risk and compliance perspective, you know, that's a kind of world, certainly it's the fastest, you know, expanding part of our business in terms of how it interfaces with us. Yeah, you know, I mean, I think that, you know, there are a lot of people way ahead of us on that journey in terms of, you know, where treasury management systems have gone. I mean that's part of the kind of skill set that you know, we would kind of bring into our team at the moment, people with experience across those areas and trying to encourage people to kind of, not necessarily when we've made an acquisition, for example, not just lift and shift what they do on a day to day basis into, you know, mold it into our world, but actually step back and kind of scrub the white ball clean and think about, you know, where, where do we want to end up and maybe start re engineering, you know, periodically what, what we do, you know, don't just try and retrofit new opportunities into the kind of, you know, the infrastructure that we're working with. You know, I think we're, we've still got a lot to do in terms of how we drive payment processes through our kind of banking portals and things like that. So, you know, the holy grail is that kind of, you know, that, that, that one treasury hub that kind of drives all of that for jlt. But again, we're not, it's not a straightforward business because, you know, we're not just looking at how we do our own kind of currency management, how we do our own, you know, liquidity and cash management, how we manage our, you know, banking database. All those kind of things on a day to day basis have got to sit side a client money portfolio and you know, a function that's settling large volumes of payments to and from the marketplace for clients and insurers.

Before we wrap up today, Dean, you started originally as a Treasury assistant. You've achieved career success and become the global treasurer of a JLT group. What advice would you perhaps give to our listeners if they wanted to follow your career path?

If I'm honest about it, I don't think I kind of sat back at any point in time and mapped out that I'd want to go through those kind of classic, the classic ladder progression. Yeah, I've been lucky to over the years have had some of those opportunities open up and I've worked importantly, I've worked for some really good people, you know, worked for some kind of, you know, great mentors who've guided me well actually, and not necessarily kind of always encouraged me to play too safely. I would say wide opportunities, you know, be patient and don't be too keen to kind of keep moving on, you know, for big titles in small companies. I think that you get groundings in the basics and work in interesting places. It sounds quite obvious. Obviously learn as much as you can along the way, but, but try different sectors. Don't get kind of rooted into a silo or a comfort zone that you end up staying in for a long time. I think a broad skills base and being flexible is more attractive than narrow specialisms.

So, Dean, today before our call, we discussed that the world for JLT has changed a little bit recently. Can you just perhaps explain that for.

Our listeners a little bit more? That's right, Mike. As you may have seen, Jalti in September announced it as being acquired by Marshall McLennan. The deal was approved by our shareholders in November and we expect it to clear regulatory approvals, etc. Probably sometime during the first half of 2019. So we'll be working on the combination of the two treasury functions with Marsh and McLennan. Should be an interesting project. And I think that there'll be some opportunities that comes out of that process for our staff. In the meantime, I think that it's business as usual for us at JLT and we'll look forward to, I think, what's going to be some pretty interesting activity in 2019 with respect to your.

You know, you've had this very successful treasury career. Any final words of advice you'd say to people?

I mean, I think that, look, I would say that if people are thinking about, you know, a career in Treasury, I've really enjoyed it. It's got a commercial kind of application that, you know, an accounting career, whether you're an accountant, whether you're a banker, whether you just want to get into corporate treasury and you want to qualify as a treasurer, it's certainly been an interesting and enjoyable and kind of fast moving area to work in. It's got a commercial application across the business, it aligns with the business. You can add real value in a business. Certainly I'd say to anybody that corporate treasuries, it's a fantastic career. It's a much more expanded and varied career now. Probably was when I began my career. Mike, don't be shy, but people should pick up the phone to you and they can ask your advice. You know, a lot of people in the market, you know, a lot of companies known you for a long time, certainly, you know, whether it's just advice on recruitment, whether it's advice on a next role. Found it very easy to pick up the phone to you. Yeah. So, you know, that's kind of how I've looked at where we've, where I've been, it's been great. I've had some great challenges, been hard work at times. I've loved building teams, I've loved working externally facing. It's a good role to be in.

Let's see where the world goes from here. Lots of, lots of things coming along in 2019 and. Well, that's right, you can see, but it's been great, great. As always chatting to you and thanks for your time.

Thanks, Mike.