Executing a £1bn UK Gilt Maturity – Operational Planning and Client Engagement

Background

This case study demonstrates how we supported our client through a corporate action redemption event, using a UK gilt maturity as an example. The approach and principles used can be applied to similar events.

Our client, a leading UK-based asset manager and private banking institution, engaged PryceWilliams to coordinate and execute a £1 billion UK gilt maturity exercise across its Execution Only and Advisory client propositions. The objectives were to ensure operational efficiency and to meet underlying client needs with the redemption proceeds.

Approach

We engaged key stakeholders across the relevant business areas and structured our approach into four key phases:

• Client Holding Analysis
• Client Communication Strategy
• Operational Readiness
• Resource Allocation

Analysis Performed

Collaborating with stakeholders from Client Coverage, Securities Dealing and Investment Operations, we led weekly working groups, tracked delivery against milestones, and ensured a smooth maturity and positive client outcomes. The key phases delivered were:

Client Holding Analysis

• Preparation of the underlying client holding MI across the gilt ISIN set to mature on the target redemption date.
• Review of a similar-sized maturity that took place previously, to identify challenges and incorporate lessons learned.

Client Communication Strategy

• Development and execution of a detailed communication plan to outline reinvestment options, with a focus on asset retention and growth.
• Client relationship directors were asked to facilitate this and proactively reach out to their clients to discuss options ahead of the maturity.

Operational Readiness

• Planning and preparation of Investment Operations activities to ensure timely settlement of the gilt maturity within the client’s core banking system.
• Operations teams were asked to test-run the activities required on the maturity date to identify potential issues and contingencies.

Resource Allocation

• Ensuring the Securities Dealing team was adequately staffed on the maturity date to manage the surge in client transactions.
• All teams were briefed on their respective tasks and the expected timelines. The custodian was engaged to confirm actions and the expected timing of the SWIFT message.
• The Operations team was also asked to prioritise the maturity event delivery on the day.

Conclusions

Our involvement achieved the following outcome for our client:

• Realisation of the commercial opportunities for the client, through proactive engagement with investors.
• Testing and enhancement of processes within the business.
• A replicable framework for success in the delivery of future gilt maturity events.

Recommendations

Based on the successful execution and lessons learned from this project, we recommend the PW Project Planning check to support any future change or similar initiatives.

For example, the PW Project Planning check covers:

• Cross-functional collaboration and stakeholder engagement to align expectations and operational execution capabilities
• Event testing and dress rehearsal in a test environment to simulate the corporate action delivery steps.
• A proactive approach on the maturity date to ensure a successful live execution

Next Steps

PryceWilliams provides specialist consulting and project delivery services for financial organisations with regulatory compliance needs. Our focus is supporting the project sponsor to ensure project implementation is delivered on time and within budget. Should you need support, contact us to make progress happen.