growing bigger by staying small
Although Madrid-based independent consultancy firm Peraita y Asociados started operating under this name not more than six years ago, Manuel Peraita has been a reference within the Spanish actuarial industry since the beginning of the 1980s when he first established himself as an independent consultant.
In this first period of his career, Peraita advised consultancy firms wishing to enter the Spanish market on how to establish and develop their operations in the country. He joined William M Mercer in 1986 as responsible for the firm’s operations in Spain. “All the clients I had when working on my own were transferred to Mercer,” he says. From there he moved to Arthur Andersen were he worked until 1996 when he set up Peraita y Asociados.
“Although it’s just been six years since we set up the company, it can be said that I’m one of the pioneers in this field and a lot of people that today are in the consultancy area in Spain have worked with me at some stage of my career,” says Peraita. Today, five people – four actuaries and a lawyer – work at Peraita y Asociados on a permanent basis, although a larger group of professionals collaborates with the company when a specific project requires them to do so. “My philosophy when I set up this firm was to grow not in terms of staff but in terms of networking,” he says. “We are a group of professionals, actuaries and lawyers, that get together to develop specific projects. Some times there can be up to 12 people working on an account but when there is not a particular reason for us to work together each person continues developing their own activities.”
The reason for this can be found in Peraita’s past experience: “When I first started in Mercer we were a group of nine people and in two years this figure went up to around 50. This is not a problem when the business is going well but at times when things don’t go that well, the cost of maintaining permanent staff is too high. This I don’t want to see happening to this company which will be always small but very specialised.”
Peraita y Asociados has now around 40 clients. “With some of them we work on a continuous basis and with others sporadically.” The services demanded from regular clients are those related to actuarial evaluations, including preparation of companies’ reports and mathematical work. “The services we provide to these clients is more to do with the functioning of the plan, whereas the strategic projects we do for other clients are more related to plan designing,” Peraita says.
“Those clients who come to us sporadically asking for strategic advise want to know how they should adapt social provision issues to their human resources policies. They want to know the cost involved in introducing these policies, how future developments in legislation could affect the plan or how the EU normative is evolving.” He adds: “In Spain there are a lot of cases of companies with badly designed plans which are now finding serious problems to deal with. We help our clients to set up the right strategies to avoid future problems.”
Peraita finds this strategic consulting as a very attractive area to develop and also believe that in this respect his company is ahead of some larger consultancy firms with more staff but less experience in the field. “However we don’t get this kind of projects all the time, so we have to combine both the actuarial work with the strategic one to avoid periods of inactivity.”
Thinking of the future, Peraita believes that in order for the Spanish pension fund market to grow there is a need for further changes in legislation, less control from the financial institutions and professionalism and more awareness in the comisiones de control – board of trustees.
“The growth of the consultancy market depends in the nature and size of the pension fund industry itself,” Peraita says. “And in this respect Spain is still years away from the anglo-saxon approach.”