A few large corporate services providers tend to win the bulk of new SPV management opportunities related to securitisation and structured finance. However, size is not directly correlated with quality. Private-equity backed corporate services providers aim to make money as quickly as possible at the highest possible margins. Unsurprisingly, the persistent pressure to lower costs leads to providers focusing on delivering minimum acceptable service levels at the lowest possible costs. The first symptom of a developing problem is often a high level of staff turnover at the corporate services provider, as over-burdened, underpaid employees search for more rewarding careers elsewhere. This leads to inexperienced staff being assigned to complex SPV structures and a gradual downward spiral of deteriorating service levels, higher error rates and lower customer satisfaction levels.
Smaller, independent service providers, if carefully selected, can offer the best combination of quality, service and value. Before selecting a corporate services provider for a future SPV transaction, it is a good idea to check the skills, experience of those who will be acting as SPV directors and to be satisfied that there is an unequivocal commitment from senior management to delivering consistently high levels of quality, service and value. It is also a good idea to diversify the choice of service providers to enable service levels to be dynamically compared. Where a provider of corporate services fails to meet the required delivery standards, the transaction sponsor or originator, acting in conjunction with the Trustee, can usually arrange for a replacement to be made without incurring any significant costs.