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Disaster Recovery Remains Operational Priority, French Says

Gary French is the managing director of the investment operations unit at Zurich Scudder Investments. That unit is comprised of roughly 325 employees. He is also chairman of the board of the National Investment Company Service Association.

French discussed the 2002 NICSA Operations Conference, which is taking place this week in Miami, as well as current operational challenges for Zurich Scudder and the industry in general with Mutual Fund Market News' Andrew Brent.

MFMN: When did you become NICSA board chairman and how did that come about?

French: I became the chairman of NICSA's board effective May of last year, and it's basically a two-year term carved out of a six-year board member commitment. I guess it's the proverbial I forgot to step back when they asked for volunteers.' But in all seriousness, there is a nominating and governance committee of the board, which is comprised in part of former board members. They review the folks who have been suggested to them as possible chairmen. And because it is a voluntary organization, there has to be a certain amount of willingness on the part of the board member to actually function in that capacity. They asked me if I was willing to do it and I said, Sure.'

MFMN: Does being involved with NICSA and being chairman offer any advantages in terms of visibility for Zurich Scudder, or is it strictly a voluntary service?

French: I would characterize it as purely a volunteer service. I've been active with NICSA for a number of years. I chaired the operations conference committee for a couple of years, and I think it's an excellent organization and one I'm willing to devote time to. I'm thankful that my employer, and my former employer [United Asset Management] for that matter, were willing to allow me to devote the time to the organization because I think it's an outstanding group of folks. If there are any visibility issues, it's not why I do it.

MFMN: What are you looking for from this year's Operations conference? What do you think will be this year's hot topics?

French: I think first and foremost it's going to be disaster recovery and the ramifications of the September 11 and following days' events on our industry. I think there will be a lot of conversation around disaster recovery capabilities. In fact, our Monday keynote speaker is [Cristobal Conde] from SunGard recovery services, and so I think it's a timely topic.

Just as an aside, we on the board have been anxious about the attendance for the conference and our advanced registrations are off somewhat from prior years. It's hard to tell whether that's a result of normal budgetary limitations people are undergoing because the industry is not doing as well as in prior years, or whether there is a more conservative approach on the part of member organizations that have said, We need to be paying more attention to what's going on in our offices.

MFMN: When was the conference agenda put together? Was the topic of disaster recovery put in after the program was already set?

French: The typical process is that the program planning committee actually gets underway shortly after the prior year's event to recap and identify those things that went well and those things that need some work. Then there's a break in the action over the summer, and although there are periodic meetings that take place over the summer, the real effort gets underway in the August-September-October timeframe. They were, no doubt, right in the throes of setting the agenda and lining up speakers in September. Most of the keynote speakers are not paid speakers and sometimes it's difficult to get on their calendars, so we try to do it as much in advance as possible. But their schedules change and it's frequently necessary to make adjustments along the way. I think this one just fell into place.

MFMN: What are your responsibilities at Zurich Scudder?

French: I run a group called investment operations, which provides, to use the pejorative term, back-office support for the investment activities of the firm. That's anything having to do with portfolio investments that's post-trade execution, including settlement, custody, reconciliations, corporate actions, pricing, sub-accounting [and] NAV calculations for the mutual funds. We service all of the various distribution channels that Zurich Scudder has historically been involved in so that we can provide investment operations support for mutual fund activities as well as institutional separate accounts, high-net-worth accounts and co-mingled pools out of the Scudder Trust Company.

MFMN: Has the firm's corporate management paid more attention to investment operations and implementing some protection and/or disaster recovery initiatives post-September 11?