New York, NY, USA
August 2, 2006Trends in
Hedge Fund Administration
Report Published by Celent
Hedge funds are increasingly
outsourcing, and the hedge fund administration business is flourishing.
A major transition is occurring in the hedge fund
administration market. Services are expanding from fund administration—
fund accounting, NAV calculation, secretarial services, and investor
relations, to name a few—to full business process outsourcing, according
to the new Celent report, Trends in Hedge Fund Administration.
The potential growth is looking good for the 70
hedge fund administrators across the globe. Leading the pack of
administrators, as measured by total assets under administration including
direct hedge funds and fund of funds, are CITCO, HSBC
Alternative Fund Services, and Fortis Fund Services.
Hedge funds continue to astound the
market with double-digit growth rates and global demand. As a result,
there is always more business for hedge fund administrators. Based upon
Celent analysis of data from Hedge Fund Research and EurekaHedge, the global
hedge fund market is approximately US$1.3 trillion in assets and is
expected to reach US$2.38 trillion by 2009, an annualized growth rate of
17%. European hedge fund assets will significantly increase their share of
the global hedge fund market, rising from 27% in 2006 to 35%; assets will
rise from US$397 billion to US$835 billion. Asia’s market share will
increase from just under 5% (US$74 billion) to 9% (US$215 billion). All of
this is good news for hedge fund administrators.
The hedge fund administration business may be heating up, but increased
competition has yet to lower prices. “As the competitive front garners
large firms with deep pockets, it would be natural to see price declines.
But not necessarily,” says Denise
Valentine, senior analyst and author of the report. “Most of the
pricing matrices are as complicated as the alternatives business itself.
The ancillary services blossoming in the HFA offering allow for a
multitude of pricing matrices.”
This report explores outsourcing in the hedge fund industry and its
impact on the evolution of hedge fund administration. Also included is a
ranking of hedge fund administrators and detailed statistics on the hedge
fund and fund administration markets.
The 36-page report contains 12 figures and
4 tables. A table of
contents is available online.
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