Administrators feel the heat as assets dive and demands grow

Wed Jun 24, 2009




The fall in assets in 2008 has dented the profitability of hedge fund administrators at the same time as regulatory and investor demands on them are starting to grow dramatically

Hedge fund administrators are caught between a rock and a hard place as the alternative investment industry undergoes a period of far-reaching change.

The plunge in industry assets has dealt a substantial blow to the profitability of an industry where fees are usually charged as a basis-point percentage of client assets.

And the problems of the past year in the hedge fund world, meanwhile, are triggering a very significant increase in the demands and burdens on administrators from regulators and investors - potentially increasing costs sharply, just as their profits are shrinking.

The Madoff disaster at the end of last year has caused investors of all shapes and sizes to become increasingly vigilant about where their assets are held, how they...

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