Betting on admin
June 01, 2011
Katrina Dean Allen
Citco tops the list of hedge fund administrators with $133 billion. But several competitors, particularly investment banks, are fighting hard to gain market share in the business by cross-selling their services
By Katrina Dean Allen
Citco remains the number one hedge fund administrator in the U.S. by some distance, but other administrators are fighting hard to gain market share. Among the hungriest new contenders are the investment banks, who were previously happy to leave the unglamorous back-office tasks like calculating funds’ net asset values and handling shareholder relations to a handful of independently run administrators while they focused on the then-lucrative business of prime brokerage.
Making money from prime brokerage has gotten tougher, however, and banks are fighting to make inroads into hedge fund administration at a time when that business is booming, thanks to the trend of more U.S. hedge funds hiring third-party firms for administration. Banks are wooing new fund administration clients partly by cross-selling services such as prime brokerage and fund administration.
The strategy is working. “About 60% of the clients we bring on board...
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