Having captained rugby teams at both Oxford and Auckland Universities, Fraser Gemmell, CEO of Pepper European Servicing, has spent decades proving his mettle as a strong leader on and off the pitch. His appointment to the head of the pan-European Servicing and Asset Management company just two years ago has provided the stage for Fraser to confirm that strength, having led the company through its best year yet in 2020, despite the challenges presented by Covid-19. Now, named the Most Influential CEO of 2021, Fraser tells us more about Pepper European Servicing and its successes under his leadership.
Established in 2012 with €0 Assets Under Management (AUM), Pepper European Servicing (PES) is today a diversified and independent, pan-European Servicing and Asset Management business that currently boasts more than €40 billion in AUM and employs a team of approximately 850. Operating in the UK, Ireland, Spain, Greece and Cyprus, PES is growing, with the acquisition of a small business in Italy that is due for completion at the end of May 2021.
Fundamentally, Pepper is an outsourced credit solutions provider for a host of different clients, managing credit investments for institutions that have originated those investments and require expertise in managing certain aspects or elements of their portfolio, and institutional investors, such as private equity firms or hedge funds, which have acquired portfolios of mortgages, commercial real estate, buy-to-lets, auto loans, personal loans and more, sold off by other institutions.
Serving a variety of large firms and financial institutions that operate in a heavily regulated and operationally intensive industry, Pepper has rooted itself in an entrepreneurial mindset that is highly ambitious and growth oriented. Uniquely built from scratch, unlike many of its competitors which have typically been spun out from large banks during deconsolidation processes, PES operates in strict adherence to its own values – Can Do, committed to delivering innovative opportunities and solutions; Balanced, that handles the relationship between opportunity and risk to create solutions for success, even in adversity; and Real, Pepper’s guarantee of respect, honesty and integrity in dealing with its network of clients and partners as well as its employees. Driven by those values, the PES team, led by CEO Fraser Gemmell, adds value to its clients via innovative, proactive and data-centric solutions.
Formerly the team captain of the Auckland University rugby club, of various Auckland Provincial representative sides, of the Oxford University team, and an occasional player for the New Zealand Barbarians, Fraser Gemmell has long been regarded as a competent leader. “I have been in leadership positions, both professionally and in an extracurricular sports-based environment for many, many years,” Fraser tells us. “Leadership comes quite naturally to me and is something that I think enhances the way I operate, be that on the sports field or in a professional context.”
His appointment to CEO of Pepper European Servicing in 2019 therefore may have been his most overt corporate leadership position to date, but it is a role he immediately took to magnificently. Having been a major player in the PES team since day one as the primary business plan builder for Pepper across Europe, armed only with a laptop and a mobile phone, he was able to hit the ground running when he took up the CEO role.
Just as he did on the rugby pitch, Fraser has spent many years refining and developing his leadership styles, adjusting them dependent on the contexts he is operating in, but always rooted in the same core principles. Absolute transparency; enormous trust in the team; total clarity and conviction in the direction of his company and what it seeks to achieve; the creation of a very robust culture; and decision making that is grounded in data and analytics are all embedded into Fraser’s mentality as a leader.
This mentality is combined with the ‘lenders’ or investors’ mindset’ that is adopted not only by the executive team but through the entire organisation. It is a mindset that has been developed through PES’s own heritage as part of a global company (the Pepper Group) that owns multiple lending businesses around the globe. As a result, the PES team seeks to constantly go beyond the role of a pure service provider – thinking and acting like an asset owner, underwriting, managing and constantly refining operating strategies just as an asset owner would do.
This enables PES to meet and exceed the expectations of its clientele that is predominantly made up of highly sophisticated, institutional credit investors. Employing an extremely data-intensive approach that comprehensively uses data and analytics to demonstrate both capability and value-adding, PES seeks to operate with absolute transparency, focusing on the underlying performance of a position that is rooted in data. It is a unique approach that sets Pepper apart from its competition, and one that drives the firm to push itself further by asking itself hard questions about its strategic goals, and by striving to contribute to the broader momentum of its market, rather than waiting to play catch up.
In Fraser’s view, the proactivity that is such a key driver of PES’s development would not be possible without the teams located across the continent. “If the culture wasn’t what it was, and our people weren’t who they were, then we wouldn’t have achieved the successes that we have,” he asserts.
While technology and robust processes are integral to PES, as a human capital-intensive business, it is the people and culture that are truly vital to the company’s successes. “The culture is entrepreneurial and ambitious. We roll up our sleeves and get on with what is required, again a legacy of where we’ve come from – no one’s too big for the job. We also have a growth and learning mindset, constantly seeking to understand what we need to do to be better. I like to think we are very open and very transparent in the way that we ask questions of ourselves to enhance and grow the business. That permeates throughout the organisation.”
Fraser continues, “We hire for culture, we don’t hire for talent. Talent is important but you’ve got to look beyond the CV at what the individual can bring to the business. If they can enhance or contribute to what it is that we’re building at the cultural level, and if the core values are in place, talent will look after itself.”
Once recruited, PES employees are offered extensive training and development, as well as opportunities to have their say in how the business can be better through weekly pulse checks that are part of the firm’s award-winning employee wellness programme, “PES People Matter”. The programme, which was built by employees, for employees, gives Fraser and his executive team insights into the issues that are affecting their teams and take efficient steps to resolve those matters.
“PES People Matter” was just one of the outcomes of the last year brought about by the Covid-19 pandemic. Like so many other businesses, Pepper saw the impacts of the pandemic but unlike many, it reacted immediately and early, moving 95% of its employees to remote working in only a matter of days with a seamless efficiency in which Fraser takes great pride. It is likely that PES will maintain this more flexible working structure throughout the pandemic and beyond, broadening its recruitment net as well so it is no longer limited to the catchment area around its offices when seeking out the best new talent.
In a wider context, Fraser sees Covid having a material impact on the broader European financial sector. Similar to the wake of the 2008 Financial Crisis, this will require European servicing platforms to deliver innovative and proactive solutions that meet the needs not only of their clients but also that of regulators across the UK and Europe. PES is spending significant time and capital in looking at ways it can drive innovation and deep insights into the impact of Covid on the portfolios it manages.
Despite the intensity of 2020 that was caused not only by the pandemic, but also by a takeover approach from one of its competitors that ultimately fell through and a rapidly changing macro environment, the last year was PES’s best yet. So while Fraser and his team are focused on PES’s recovery from the intensity of the last year, they have also embarked upon an in-depth review which will set out the longer-term strategic direction of the business, ensuring PES continues to deliver the best possible servicing and asset management solutions to their clients.
“Everything we do at Pepper European Servicing, right across the group, is driven by the quality of our people, the robustness of our culture and a myopic focus on data and analytics,” concludes Fraser. “We have a very client-centric and customer-centric view of the world, which is underpinned by absolute trust, transparency, accountability and challenge. While we are proud of what we have achieved since we started the business back in 2012, we are hugely excited about what the future holds. We will continue to set our internal aspirations high and work until we reach them. Then we will reset them and go again”.
