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					Q2 2010 Hedge Fund
Administrator Survey


                 sponsored by Advent Software
HFN Q2 2010 Hedge Fund Administrator Survey




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                                                     2
                                                                                                         Advent Software
Advent Software is once again pleased to sponsor the Q2 2010 HedgeFund.net (HFN) Hedge Fund Administrator
Survey. Year over year, HFN continues to be an excellent source of current data, news and research for both investors
and funds alike. This year’s survey includes data from over 60 of the world’s largest fund administrators, and does an
excellent job of representing the entire marketplace.

Uncertainty in the markets has made a strong case for alternative investments and the mid-year 2010 data seems to
indicate hedge funds continue to attract assets and administrators continue to increase their important role in the
industry. Very few firms saw decreases in assets from the prior survey, and many of the largest firms reported meaning-
ful increases to their hedge fund business. The visible success across two consecutive survey periods is a welcome sign
following the asset destruction incurred following the financial crisis.

While the prior survey’s positive results were highly influenced by market gains and increased valuations, the current
results are indicative of the strength of the administrator’s role in the hedge fund business in the eyes of both fund
managers and investors. During the difficult times, the fund administration community kept a constant focus and
worked to improve service offerings and provide excellent value to their client base through additional service offer-
ings, enhanced reporting, and in some cases assistance with due diligence and investor servicing inquiries. This en-
hanced level of service and dedication to their clients helped the hedge fund community considerably during a period
of regulatory uncertainty, declining asset valuations, and significantly greater than expected withdrawals. The fund
administration community was up to the task, and they continue to serve as a key player in the hedge fund ecosystem.

At Advent, we are excited to display our continued commitment to the fund administration space by sponsoring this
report. For more than 27 years, Advent has been a leader in innovative solutions that help firms manage operational
risk, increase investor confidence, improve overall efficiency, and automate the portfolio management, accounting and
administration of complex investment products. Geneva®, Advent’s award-winning portfolio management, accounting
and reporting platform, and Partner ® our global investor reporting solution, are proven industry leaders within this
market, and serve as the platform of choice for over half of the top 25 fund administrators noted in this survey.

Advent looks forward to our continued involvement within this market, and we thank all of the administrators who
have shared their valuable information with HFN for this survey



The results of the Q2 2010 HFN            ed administrator assets to estimate
                                          the size of the hedge fund industry.
                                                                                   Growth during the first six months of
                                                                                   2010 in the industry was the norm,
Hedge Fund Administrator Survey
were 63 firms reporting $2.517 tril-                                               with only a few administrators re-
                                          For the second survey period in a        porting a decline in hedge fund AuA.
lion in single manager hedge fund as-
                                          row, the results indicate that assets    The top five firms all grew at a faster
sets under administration ($AuA) for
                                          under administration (AuA) grew at       rate than the hedge fund industry’s
11,986 hedge funds. HFN requested
                                          a faster rate than both performance      total assets grew in the first half. The
administrators report the most re-
                                          and net inflows increased estimated      top five grew at an average rate of
cently available figures through the
                                          hedge fund assets. This is an indica-    11% and the top 3 grew AuA at near-
end of Q2 2010. Additionally, HFN
                                          tion that, in the first half of 2010, thely 15%. The remainder of the indus-
requested administrators not include
                                          administration industry continued to     try grew at a more modest pace with
feeder funds and to report assets in
                                          increase its coverage of hedge fund as-  AuA increasing an average of 6.3%,
funds of funds, managed accounts,
                                          sets. The most likely reasons are that   still faster than the growth of total in-
hedge fund UCITS and any other
                                          large, previously self-administered,     dustry AUM through June. HFN es-
alternatives separately to ensure the
                                          funds have continued to move to out-     timated hedge fund AUM rose 2.2%
single manager hedge fund figure was
                                          sourcing and larger fund launches are    in the first half of the year.
as pure a representation of the current
                                          relying more on outsourced adminis-
state of the industry as possible. See
                                          tration to satisfy institutional investor The rates of growth, along with con-
“A Look inside the Numbers” for a
                                          demand for independent reporting.         solidation within the industry have
discussion on how HFN uses report-
                                                                                    led the largest firms to administer
                                                                   3                                          HedgeFund.net
HFN Q2 2010 Hedge Fund Administrator Survey
the vast majority of total assets. At                                                                                                 Average
                                                                                                     HF AUA ($b) Growth from Hedge   Fund Size
the end of Q2 2010, the Top 5 firms               Hedge Fund Administrators Ranked by $AUA            Q2 2010     Q4 2009    Funds    ($mm)
provided administration services to               Citco Fund Services                                   $ 420.00      6.33% 1942       $ 216.27
                                                  State Street Alternative Investment Solutions         $ 281.00     16.60% 606        $ 463.70
nearly 50% of administered assets,                BNY Mellon Alternative Investment Services            $ 206.36     21.18% 870        $ 237.19
up from 48% a year prior. While this              Goldman Sachs                                         $ 191.20      9.57% N/A             N/A
                                                  Citi's Hedge Fund Services                            $ 148.00      0.09% 910        $ 162.64
percentage has increased, percentage              HSBC Securities Services*                             $ 130.85         N/A 706       $ 185.34
controlled by the Top 10 and Top 20               GlobeOP Financial Services**                          $ 121.00     11.01% N/A             N/A
has not materially changed in the past            SS&C Fund Services                                    $ 106.00      2.91% N/A             N/A
                                                  Morgan Stanley Fund Services, Inc.                     $ 82.04      0.74% N/A             N/A
year, an indication of the consolida-             CACEIS INVESTOR SERVICES                               $ 81.15     -5.64% 697        $ 116.42
tion among the largest firms.                     Prime Fund Solutions***                                 $ 77.26        N/A N/A            N/A
                                                  SEI                                                    $ 75.20     10.59% 480        $ 156.67
                                                  Northern Trust                                         $ 67.01      3.67% 151        $ 443.76
The Rankings                                      UBS Fund Services                                      $ 61.45     -1.34% 315        $ 195.07
                                                  JPMorgan Hedge Fund Services                           $ 38.00      0.80% 236        $ 161.02
The composition of the five largest               BNP Paribas Securities Services                        $ 36.20      0.00% N/A             N/A
                                                  NAV Consulting                                         $ 35.00      2.94% 375          $ 93.33
firms remained unchanged through-                 PNC Global Investment Services                         $ 31.70     -7.85% 434          $ 73.04
out the past year; however there has              Custom House Global Fund Services                      $ 27.06      1.69% 257        $ 105.30
been a fair amount of deal activity               Butterfield Fulcrum                                    $ 25.00         N/A 335        $ 74.63
                                                  Omnium***                                              $ 21.93     -4.22%   39       $ 562.40
among the largest firms to keep pace.             AIS Fund Administration                                $ 20.00     17.65%   85       $ 235.29
Citco Fund Services continued its                 Trident Trust Fund Services                            $ 19.35     -5.63% 370          $ 52.29
                                                  Kaufman Rossin Fund Services                           $ 15.20      4.83% 152        $ 100.00
reign as the largest hedge fund ad-               LaCrosse Global Fund Services                          $ 15.20     22.58%   52       $ 292.31
ministrator reporting AuA growth                  Admiral Administration Ltd.                            $ 14.39     -3.26% 220          $ 65.40
                                                  Harmonic Fund Services                                 $ 14.04      3.69% N/A             N/A
of 6%. In May Citco announced a                   Maples Finance                                         $ 13.71    -17.13% 128        $ 107.13
strategic alliance with OpHedge In-               Meridian Global Fund Services Group                    $ 12.81     16.06% 171          $ 74.93
                                                  U.S. Bancorp Fund Services                             $ 11.38     12.25% N/A             N/A
vestment Services, a deal expected to             CIBC Bank and Trust Company                            $ 11.18     13.59% 220          $ 50.84
widen its range of specialized services.          Deutsche Bank Alternative Fund Services                $ 10.90     29.56% 160          $ 68.14
                                                  Apex Fund Services Ltd                                 $ 10.55     18.44% 231          $ 45.65
OpHedge previously reported hedge                 Nottingham Investment Administration                   $ 10.10     19.53%   50       $ 202.00
fund AuA of $38 billion.                          RBC Dexia Investor Services                              $ 8.18   -50.13% 319          $ 25.63
                                                  Conifer Securities                                       $ 5.90    24.21% N/A             N/A
                                                  ALPS Price Meadows                                       $ 5.85    13.04% 188          $ 31.12
State Street Alternative Investment               Swiss Financial Services Limited Holdings                $ 5.68   -36.72% N/A             N/A
Solutions retained second position                JD Clark & Co. (A Division of UMB Fund Services)         $ 4.73    13.62% 106          $ 44.65
                                                  Michael J. Liccar & Co., CPAs                            $ 4.33   -19.73% 191          $ 22.67
and reported very strong growth in                MadisonGrey Fund Services                                $ 4.32    21.32%   68         $ 63.56
the first half of 2010. Reported AuA              Columbus Avenue Consulting, LLC                          $ 3.80   -20.83%   67         $ 56.72
                                                  Cortland Fund Services                                   $ 3.80    40.74%   63         $ 60.32
rose 17% in the first six months of the           Caledonian Global Fund Services                          $ 3.72    -3.13%   60         $ 62.05
year and some of the increase was due             Amicorp Fund Services                                    $ 2.49    18.52%   48         $ 51.92
                                                  ISIS Fund Services                                       $ 2.09     4.60%   28         $ 74.55
to the firms closing on its purchase              INVESTMENT DATA SERVICES GROUP (IDS)                     $ 2.09     3.27% 127          $ 16.43
of Mourant International Finance                  RBC Offshore Fund Managers Limited                       $ 1.73    -7.78%    1     $ 1,730.90
                                                  IFCE FUND SERVICES                                       $ 1.73    25.91%   68         $ 25.37
Administration. The transaction has               Maitland                                                 $ 1.71    47.72%   65         $ 26.26
turned State Street into the leading              OPUS FUND SERVICES                                       $ 1.69     6.57%   41         $ 41.25
                                                  Equinoxe Alternative Investment Services                 $ 1.50    53.06%   54         $ 27.78
administration service provider across            Circle Partners                                          $ 1.45     3.87% N/A             N/A
all alternative asset types.                      Pinnacle Fund Administration LLC                         $ 1.40    -2.56% N/A             N/A
                                                  G&S Fund Services                                        $ 1.10        N/A  62         $ 17.74
                                                  Gravity Financial, LLC                                   $ 1.04    16.50%   36         $ 28.91
In the Q4 2009 survey, BNY Mellon                 Eisner Fund Services, LLC                                $ 1.00    17.65%   30         $ 33.33
Alternative Investment Services was               Trinity Fund Administration Limited                      $ 0.92        N/A  72         $ 12.71
                                                  Banque Privée Edmond de Rothschild Europe                $ 0.81    13.64% N/A             N/A
surpassed by Goldman Sachs Admin-                 BGT Fund Administration                                  $ 0.42        N/A  80          $ 5.25
istration Services for the third spot,            BDO Simpson Xavier Fund Administration Services
                                                                                                                $ 0.39 -9.78% N/A       N/A
                                                  Limited
but BNY’s growth of 21% in the first              Gemini Fund Services                                          $ 0.33 -2.65%   17   $ 19.33
half of 2010 helped regain its posi-              Close Brothers                                                $ 0.13 14.61%    3   $ 41.79
                                                  Totals                                               $ 2.516.51             11,986
tion in the Top 3. The firm recently
                                       *As of December 2009. June 2010 figures will be included when available.
announced that it closed on its acqui- **Does not separate hedge fund from fund of funds assets
                                       ***As of May 2010
sition of PNC’s Global Investment
Servicing business. PNC’s business was reported to have $32 billion in hedge fund AuA and $39 billion in
                                                                            4
                                                                                                                                Advent Software
FoF AuA. Goldman Sachs and Citi’s                                                                    FoF AUA          Growth    Funds
                                                                                                     ($b) Q2          from Q4   of      Average Fund
Hedge Fund Services rounded out          Fund of Funds Administrators Ranked by $AUA                 2010             2009      Funds   Size ($mm)
the Top 5 with growth of 10% and         Citco Fund Services                                          $ 115.00        0.00%     620      $ 185.48
                                         Prime Fund Solutions*                                        $ 98.75         N/A       N/A      N/A
1%, respectively in the first half of    UBS Fund Services                                            $ 86.65         -7.84%    377      $ 229.84
2010.                                    SEI                                                          $ 76.50         2.00%     460      $ 166.30
                                         Citi's Hedge Fund Services                                   $ 61.10         -0.47%    352      $ 173.57
                                         State Street Alternative Investment Solutions                $ 57.00         -8.06%    212      $ 268.87
Other notable results include            HSBC Securities Services**                                   $ 50.47         -7.21%    399      $ 126.49
GlobeOp Financial Services increas-      BNY Mellon Alternative Investment Services                   $ 45.37         12.33%    314      $ 144.49
                                         BNP Paribas Securities Services                              $ 42.00         -4.98%    N/A      N/A
ing AuA by 11% in the first six          PNC Global Investment Services                               $ 39.30         -1.01%    479      $ 82.05
months of the year, which follows        Butterfield Fulcrum                                         $ 35.00          -12.50%   277     $ 126.35
                                         JPMorgan Hedge Fund Services                                 $ 35.00         7.69%     203      $ 172.41
strong growth in the second half of      Deutsche Bank Alternative Fund Services                      $ 33.74         78.35%    240      $ 140.56
2009 when the company reported an        SS&C Fund Services                                           $ 30.00         7.14%     N/A      N/A
                                         Northern Trust                                               $ 18.79         7.99%     128      $ 146.80
AuA increase 27%. SEI reported its       CACEIS INVESTOR SERVICES                                     $ 17.67         -18.13%   313      $ 56.45
second consecutive period in which       Banque Privée Edmond de Rothschild Europe                    $ 17.32         12.79%    N/A      N/A
                                         JD Clark & Co. (A Division of UMB Fund Services)             $ 14.27         6.56%     129      $ 110.65
AuA grew at 11% and AIS Fund Ad-         RBC Dexia Investor Services                                  $ 12.90         -25.97%   115      $ 112.14
ministration reported 18% growth         Swiss Financial Services Limited Holdings                    $ 10.29         -17.93%   N/A      N/A
after reporting nearly 10% growth        Admiral Administration Ltd.                                  $ 7.30          6.50%     15       $ 486.52
                                         Custom House Global Fund Services                            $ 6.77          -21.90%   212      $ 31.92
in the second half of 2009. There is     RBC Offshore Fund Managers Limited                           $ 4.05          0.27%     15       $ 270.15
more detailed discussion on the fast-    Maples Finance                                               $ 3.34          -10.48%   54       $ 61.76
                                         Maitland                                                     $ 3.09          8.94%     116      $ 26.60
est growing hedge fund and fund of       Kaufman Rossin Fund Services                                 $ 2.20          15.79%    30       $ 73.33
funds administrators here.               CIBC Bank and Trust Company                                  $ 2.05          16.19%    25       $ 82.08
                                         NAV Consulting                                               $ 2.00          0.00%     29       $ 68.97
                                         ALPS Price Meadows                                           $ 1.89          6.90%     46       $ 41.09
In addition to reporting hedge fund      BDO Simpson Xavier Fund Administration Services
                                                                                                     $ 1.54           N/A       N/A     N/A
                                         Limited
results, administrators also reported    Michael J. Liccar & Co., CPAs                               $   1.53         -0.82%    47      $ 32.65
$940.9 billion in fund of funds AuA,     Meridian Global Fund Services Group                         $   1.34         -8.40%    32      $ 41.91
$33.6 billion in managed account         Circle Partners                                             $   1.30         -1.66%    N/A     N/A
                                         INVESTMENT DATA SERVICES GROUP (IDS)                        $   1.20         3.99%     34      $ 35.24
AuA, $55.5 billion in hedge fund         Equinoxe Alternative Investment Services                    $   1.00         -9.09%    5       $ 200.00
UCITS AuA and $743.0 billion in          LEGIS GROUP                                                 $   0.88         N/A       36      $ 24.43
                                         Apex Fund Services Ltd                                      $   0.81         -2.37%    60      $ 13.52
other alternative AuA. The total re-     Columbus Avenue Consulting, LLC                             $   0.80         0.00%     19      $ 42.11
ported AuA for the alternative invest-   Close Brothers                                              $   0.72         -8.80%    29      $ 24.88
                                         Trident Trust Fund Services                                 $   0.71         -64.63%   15      $ 47.28
ment universe was $4.290 trillion at     AMICORP Fund Services                                       $   0.70         32.78%    14      $ 50.14
the end of Q2 2010, an increase of       Trinity Fund Administration Limited                         $   0.59         N/A       15      $ 39.00
                                         Pinnacle Fund Administration LLC                            $   0.48         28.74%    N/A     N/A
12%.                                     U.S. Bancorp Fund Services                                  $   0.46         -7.60%    N/A     N/A
                                         ISIS Fund Services                                          $   0.41         N/A       13      $ 31.22
                                         Omnium*                                                     $   0.32         -22.52%   3       $ 106.41
                                         IFCE FUND SERVICES                                          $   0.28         -21.65%   12      $ 22.92
   DETAILED FUND OF FUNDS                MadisonGrey Fund Services                                   $   0.14         -47.43%   11      $ 12.56
                                         Harmonic Fund Services                                      $   0.11         -13.97%   N/A     N/A
   ADMINISTRATOR RESULTS                 Gemini Fund Services                                        $   0.07         58.91%    6       $ 11.98
                                         BGT Fund Administration                                     $   0.06         N/A       10      $ 6.00
                                         Eisner Fund Services, LLC                                   $   0.06         103.70%   4       $ 13.75
                                         Nottingham Investment Administration                        $   0.05         31.58%    1       $ 50.00

The results of the Q2 2010 HFN           Gravity Financial, LLC
                                         Total
                                                                                                     $
                                                                                                     $
                                                                                                         0.04
                                                                                                         940.85
                                                                                                                      285.63%   3
                                                                                                                                5,529
                                                                                                                                        $ 12.07

Fund of Funds Administrator Survey       *As of May 2010
were 54 firms reporting $940.9 bil-      ** As of December 2009. June 2010 figures will be included when available.
                                  the median change from the prior                                erage decline in assets of 1.7% in the
lion in fund of funds assets under ad-
                                  survey was a decline of 0.23% in FoF                            first half of 2010.
ministration (AuA) for 5,529 funds
                                  AuA. While the average AuA change
of funds (FoFs). This compares to                                                                 Declining FoF AuA was the norm
                                  was positive, the figures are skewed
Q4 2009 where 49 administrators re-                                                               across the industry and not the excep-
                                  by a few smaller firms that reported
ported $891.4 billion in 4,990 FoFs.                                                              tion in the first six months of the year.
                                  very large percentage increases. The
                                                                                                  Of the 45 firms reporting any change
Despite the increase in number of Top 10 firms, which collective ad-
                                                                                                  in AuA, 53% reported declining as-
firms reporting and reported AuA, minister 71% of FoF AuA saw an av-
                                                                        5                                                               HedgeFund.net
HFN Q2 2010 Hedge Fund Administrator Survey
sets and the average rate of decline         Fastest Growing Hedge Fund Administrators    Growth from Q4 2009   HF AUA ($b) Q2 2010
                                             Equinoxe Alternative Investment Services                  53.06%                $ 1.50
with firms greater than $10 billion in       Maitland                                                  47.72%                $ 1.71
FoF AuA was 12%. HedgeFund.net               Cortland Fund Services                                    40.74%                $ 3.80
data indicated a similar trend for the       Deutsche Bank Alternative Fund Services                   29.56%               $ 10.90
                                             IFCE FUND SERVICES                                        25.91%                $ 1.73
overall FoF industry in the first half       Conifer Securities                                        24.21%                $ 5.90
as net investor flows accounted for a        LaCrosse Global Fund Services                             22.58%               $ 15.20
                                             MadisonGrey Fund Services                                 21.32%                $ 4.32
0.25% reduction in AUM.                      BNY Mellon Alternative Investment Services                21.18%             $ 206.36
                                             Nottingham Investment Administration                      19.53%               $ 10.10
                                             Total                                                                        $ 261.51
However, the role of FoFs is not dis-
appearing and the reported FoF AuA
is still a significant chunk of assets of   Fastest Growing FoF Administrators            Growth from Q4 2009   FoF AUA ($b) Q2 2010
                                            Gravity Financial, LLC                                    285.63%                 $ 0.04
the hedge fund industry. The trend is       Eisner Fund Services, LLC                                 103.70%                 $ 0.06
likely the result many firms going out      Deutsche Bank Alternative Fund Services                    78.35%                $ 33.74
                                            Gemini Fund Services                                       58.91%                 $ 0.07
of business in the wake of the finan-       AMICORP Fund Services                                      32.78%                 $ 0.70
cial crisis and a portion of the institu-   Nottingham Investment Administration                       31.58%                 $ 0.05
                                            Pinnacle Fund Administration LLC                           28.74%                 $ 0.48
tional assets returning to the industry     CIBC Bank and Trust Company                                16.19%                 $ 2.05
may either be investing directly in         Kaufman Rossin Fund Services                               15.79%                 $ 2.20
hedge funds and doing analysis and          Banque Privée Edmond de Rothschild Europe                  12.79%                $ 17.32
                                            Total                                                                            $ 56.70
due diligence in-house, or utilizing
external consultants.
                                                                                   doubled their hedge fund AuA in
There was one major change to the                                                  the last year and nearly doubled the
upper echelon of administrator rank-                 FASTEST GROWING               number of reported funds. Maitland,
ings in the first half of 2010 and that              ADMINISTRATORS                with strong ties to the South Afri-
was Citi’s Hedge Fund Services sur-                                                can hedge fund community, has also
passing State Street to take the fifth                                             been among the fastest growing funds
                                                                                   three surveys running and has nearly
spot behind SEI. The jump in the            I n the two prior surveys, the fastest
                                                                                   tripled AuA in the last year.
rankings is bittersweet as both firms’      growing hedge fund administrators
reported FoF AuA fell during the first      all posted growth in excess of 20%, Deutsche Bank Alternative Fund
six months of the year, but Citi’s hap-     a mark of which the current survey Services and BNY Mellon are the
pen to decline at a slower rate. Citco      group fell just short in the first six two largest firms to land on the fast-
Fund Services was again the leading         months of 2010, but not by much. est growing list having increase AuA
FoF administrator while Prime Fund          The 10 fastest growing hedge fund 30% and 21% respectively in the
Solutions and UBS Fund Services             administrators in 2010 all grew AuA first six months of 2010. Deutsche
rounded out the Top 3.                      by virtually 20% or more with Equi- Bank not only is making a push up
                                            noxe Alternative Investment Services the hedge fund industry table, but
There were several firms which re-          leading the way with 53% growth in has also grown their fund of funds
ported significant gains during the         the last six months and Nottingham administration business rapidly in
period. Among firms in the Top 10,          Investment Administration com- 2010. Along with Nottingham In-
only SEI and BNY Mellon reported            ing in at #10 posting a 19.5% rise. vestment Administration, they are the
increasing FoF AuA in 2010, 2% and          Growth was generally more muted, only firms among the fastest growing
12%, respectively. The fastest growth       but this was more likely a factor of on both HF and FoF lists.
came from the smaller firms, includ-        lower performance compared to the
ing Gravity Financial and Eisner            second half of 2009.                   A noticeable newcomer to the HFN
Fund Services. Please see the “Fast-
                                                                                   survey, which was also among the
est Growing Administrators” link for        For Equinoxe, this is the third con- three fastest growing firms in 2010,
more information.                           secutive survey in which they have was Cortland Fund Services, based
                                            landed among the fastest growing out of Chicago, IL. The firm grew
                                            administrators. The company, head- hedge fund AuA by over 40% in the
                                            quartered in Bermuda, has more than first half of the year and added 21

                                                                          6
                                                                                                                          Advent Software
funds to its client base.                                                                                  N.A. AUA ($b)
                                          Top 10 N. American HF Administrators                                   Q2 2010 % of Total HF AUA
                                          Citco Fund Services                                                    $ 276.25              66%
Smaller Firms Show Highest                State Street Alternative Investment Solutions                         $ 214.00               76%
Growth in Funds of Funds                  BNY Mellon Alternative Investment Services                            $ 188.22               91%
                                          Citi's Hedge Fund Services                                            $ 122.69               83%
Unlike the Q4 2009 survey when            SS&C Fund Services                                                      $ 88.00              83%
                                          SEI                                                                     $ 56.40              75%
larger firms showed the highest rates     UBS Fund Services                                                       $ 29.89              49%
of FoF AuA growth, in 2010 it ap-         NAV Consulting                                                          $ 26.50              76%
                                          Omnium*                                                                 $ 21.41              98%
pears the smaller administrators are      Custom House Global Fund Services                                       $ 19.81              73%
the ones seeing the most positive im-     Total                                                               $ 1,043.18
pacts to their top lines. Compared to     *As of May 2010

even the two prior surveys, the av-                                                                        European AUA
                                          Top 10 European HF Administrators                                 ($b) Q2 2010    % of Total HF AUA
erage size of the ten fastest growing     Citco Fund Services                                                   $ 131.65                  31%
administrators is nearly 50% smaller.     State Street Alternative Investment Solutions                          $ 67.00                  24%
                                          Northern Trust                                                         $ 62.86                  94%
Only Deutsche Bank and Banque             CACEIS INVESTOR SERVICES                                               $ 61.38                  76%
Privee Edmond de Rothschild are           BNP Paribas Securities Services                                        $ 33.40                  92%
                                          JPMorgan Hedge Fund Services                                           $ 24.91                  66%
firms with greater than $3 billion in     Citi's Hedge Fund Services                                             $ 23.07                  16%
FoF AuA on the list.                      SEI                                                                    $ 18.80                  25%
                                          PNC Global Investment Services                                         $ 18.30                  58%
                                          SS&C Fund Services                                                     $ 16.00                  15%
New comers Gravity Financial and          Total                                                                $ 1,043.18
Eisner Fund Services each saw their                                                                        Asian AUA ($b)
FoF business more than double in          Top 10 Asian HF Administrators                                          Q2 2010 % of Total HF AUA
                                          Citco Fund Services                                                     $ 12.10                3%
the first half of 2010 and in Gravity’s   RBC Dexia Investor Services                                              $ 3.54                9%
case, their business nearly tripled.      NAV Consulting                                                           $ 3.25                2%
                                          BNY Mellon Alternative Investment Services                               $ 2.50                6%
Deutsche Bank’s growth is perhaps         Citi's Hedge Fund Services                                               $ 2.24                1%
the most impressive. The firm grew        SS&C Fund Services                                                       $ 2.00               11%
                                          Trident Trust Fund Services                                              $ 1.93               10%
the FoF business by nearly 80% in the     Maples Finance                                                           $ 1.49                1%
first six months of 2010 which fol-       Deutsche Bank Alternative Fund Services                                  $ 1.25               13%
                                          Meridian Global Fund Services Group                                      $ 1.02               10%
lowed near quadruple growth in the        Total                                                                   $ 31.33
latter half of 2009. The firm now has
                                                                                          Other Regional
$34 billion in FoF AuA which ranks                                                            AUA ($b)       % of Total
it as the 13th largest in the group, up   Top HF Adminstrators - Other Regions                 Q2 2010        HF AUA            Region
                                          UBS Fund Services                                     $ 1.753          2.0%       Brazil, Uruguay
ten places from a year ago. No other      INVESTMENT DATA SERVICES GROUP (IDS)                  $ 1.198        100.0%        South Africa
firm was able to sustain growth rates     Maitland                                              $ 1.118         36.2%        South Africa
                                          Deutsche Bank Alternative Fund Services               $ 0.505          1.5%            Brazil
which put them among the fastest          Custom House Global Fund Services                     $ 0.082          1.2%             N/A
growing over the last year.               Banque Privée Edmond de Rothschild Europe             $ 0.027          0.2%             N/A
                                          Total                                                 $ 4.682


                                       Alternative Investment Solutions and               ment Solutions and Northern Trust
                                       BNY Mellon Alternative Investment                  reported the largest hedge fund AuA
          REGIONAL FOCUS               Services. Additional changes to the                in Europe. State Street’s purchase of
                                       Top 10 North American hedge fund                   Mourant helped them pass Northern
                                       administrators were limited to But-                Trust as the second largest adminis-
F  or the fourth survey in a row, Cit- terfield Fulcrum entering the group                trator of European hedge fund assets.
co Fund Services again reported the in the 10th position. The Top 10 re-                  The three largest European admin-
greatest amount of hedge fund assets ported just over $1 trillion in hedge                istrators all grew their Europe based
for funds located in North America, fund AuA located in North America.                    AuA; however only State Street grew
Europe and Asia at the end of Q2                                                          their regional AuA faster than their
2010. The Top 3 reporting adminis- Top European Hedge Fund Admin-                         businesses grew globally.
trators of North America based hedge istrators
fund assets also included State Street Citco, State Street Alternative Invest-            Growth rates for European hedge

                                                                         7                                                      HedgeFund.net
HFN Q2 2010 Hedge Fund Administrator Survey
fund business were mostly lower than                                                                                              % of total FoF
                                          Top 10 N. American FoF Administrators                    N.A. AUA ($b) Q2 2010                   AUA
other regions in the first six month      SEI                                                                    $ 62.00                    81%
of 2010. Among the ten largest Eu-        Citi's Hedge Fund Services                                             $ 57.11                    93%
                                          State Street Alternative Investment Solutions                          $ 52.00                    91%
ropean fund administrators, and ex-       UBS Fund Services                                                      $ 48.54                    56%
cluding State Street’s merger driven      Citco Fund Services                                                    $ 39.80                    35%
                                          BNY Mellon Alternative Investment Services                             $ 37.87                    83%
growth, there was actually an average     PNC Global Investment Services                                         $ 27.80                    71%
decline in European hedge fund AuA.       Deutsche Bank Alternative Fund Services                                $ 26.58                    79%
It does not necessarily indicate a de-    SS&C Fund Services                                                     $ 22.00                    73%
                                          JPMorgan Hedge Fund Services                                           $ 20.50                    59%
cline in European based hedge funds       Total                                                                 $ 394.20
and may be influenced by increases                                                                      European AUA ($b)         % of total FoF
in managed accounts and UCITS III         Top 10 European FoF Administrators                                      Q2 2010                  AUA
                                          Citco Fund Services                                                     $ 71.80                   62%
hedge fund structures.                    BNP Paribas Securities Services                                         $ 39.40                   94%
                                          UBS Fund Services                                                       $ 35.28                   41%
Asia and Emerging Regions Gar-            Banque Privée Edmond de Rothschild Europe                               $ 16.67                   96%
                                          SEI                                                                     $ 14.50                   19%
nered More Attention                      JPMorgan Hedge Fund Services                                            $ 14.40                   41%
                                          Northern Trust                                                          $ 13.32                   71%
There were more positive signs of         PNC Global Investment Services                                          $ 11.50                   29%
growth for administrators’ operations     CACEIS INVESTOR SERVICES                                                 $ 9.25                   52%
                                          RBC Dexia Investor Services                                              $ 8.62                   67%
in Asia than Europe. Even with some       Total                                                                  $ 234.73
extreme growth figures removed, the                                                                                               % of Total FoF
average rate of growth among admin-       Top 10 Asian FoF Administrators                         Asian AUA ($b) Q2 2010                    AUA
                                          Deutsche Bank Alternative Fund Services                                $ 4.001                    12%
istrator’s Asia domiciled fund busi-      State Street Alternative Investment Solutions                          $ 4.000                     7%
nesses was near 10% in the first half     Citco Fund Services                                                    $ 3.400                     3%
                                          SS&C Fund Services                                                     $ 2.000                     7%
of the year. Citco, RBC Dexia and         UBS Fund Services                                                      $ 1.077                     1%
NAV Consulting were the three larg-       Banque Privée Edmond de Rothschild Europe                              $ 0.608                     4%
                                          BNY Mellon Alternative Investment Services                             $ 0.320                     1%
est administrators of Asia based fund     AMICORP Fund Services                                                  $ 0.224                    32%
assets. Of the three, RBC had the         BNP Paribas Securities Services                                        $ 0.200                   0.5%
                                          LEGIS GROUP                                                            $ 0.140                    16%
highest growth, nearly doubling their     Total                                                                  $ 15.97
Asia based fund business while NAV
                                                                                          Other Regional AUA ($b)    % of Total
grew at a still impressive 8% rate.       Top FoF Administrators - Other Regions                          Q2 2010    FoF AUA              Region
                                                                                                                                     Brazil, Uru-
                                          UBS Fund Services                                              $ 1.753         2.0%
In regions outside Asia, Europe and                                                                                                          guay
                                          INVESTMENT DATA SERVICES GROUP (IDS)                           $   1.198     100.0%       South Africa
North America, UBS Fund Services          Maitland                                                       $   1.118      36.2%       South Africa
continues to be the largest adminis-      Deutsche Bank Alternative Fund Services                        $   0.505       1.5%               Brazil
                                          Custom House Global Fund Services                              $   0.082       1.2%                N/A
trator by a wide margin with $15.8        Banque Privée Edmond de Rothschild Europe                      $   0.027       0.2%                N/A
billion in hedge fund AuA in funds        Total                                                          $   4.682
domiciled primarily in Latin America     Citi in the first six months of 2010.             last year for the ten largest firms was
and more specifically, Brazil, Para-     The European FoF market is the larg-              nearly 12%. The figure is closer to a
guay and Uruguay. Both Investment        est of the regions and Citco was again            decline of 7% in AuA if the largest
Data Services Group (IDS) and Mai-       the largest administrator. Their Euro-            decline is removed as an outlier.
tland have strong footholds in South     pean FoF business has grown roughly
Africa. For IDS, the African coun-       5% in the last year compared to sec-
try houses the vast majority of their    ond largest BNP Paribas which had a                    METHODOLOGY FOR
hedge fund business while Maitland       reported 8% growth.                                ESTIMATING THE SIZE OF THE
has become more diversified.                                                                  HEDGE FUND INDUSTRY
                                      UBS has slipped in the category and
Funds of Funds by Region              their European FoF AuA fell 21%
SEI took over the top sport for North in the last year, but declines among
                                                                                           T
                                                                              here are numerous estimates of the
                                                                           actual size of the hedge fund indus-
American FoF AuA surpassing State the largest European FoF administra-
                                                                           try and in some cases estimates vary
Street Alternative Investment Solu- tors has been common. The average
                                                                           drastically. HFN is committed to
tions which was also surpassed by decline in European FoF AuA in the
                                                            8
                                                                                                                                      Advent Software
provide clarity when it comes to how                                                                                                                   Growth
                                            Administrators Ranked by Reported Managed Managed Account North                                           from Q4
we produce our figure for total single      Account $AUA                              $AUA Q2 2010 America Europe                      Asia             2009
manager hedge fund industry assets          Banque Privée Edmond de Rothschild Europe         $ 5.162     $- $4.130                    $1.032                0%
                                            SEI                                               $ 4.000     $-     $-                         $-               0%
and this section is an explanation of       Deutsche Bank Alternative Fund Services           $ 3.882     $- $3.882                         $-              -2%
how we utilize survey results in this       CACEIS INVESTOR SERVICES                          $ 2.164 $2.164     $-                         $-              -2%
                                            Citi's Hedge Fund Services                        $ 2.008 $1.901 $0.107                         $-              N/A
process.                                    Conifer Securities                                $ 2.000 $2.000     $-                         $-              33%
                                            Custom House Global Fund Services                 $ 1.909     $- $1.909                         $-           3099%
We chose to use a survey of adminis-        Omnium                                            $ 1.669 $1.669     $-                         $-            698%
                                            UBS Fund Services                                 $ 1.094 $0.120 $0.974                         $-              N/A
trators as a basis for our industry asset   Harmonic Fund Services                            $ 1.050 $1.050     $-                         $-              24%
information because we believe that         Kaufman Rossin Fund Services                      $ 1.000     $-     $-                         $-              N/A
                                            Michael J. Liccar & Co., CPAs                     $ 0.881 $0.881     $-                         $-             -35%
no other source is as directly in touch     Morgan Stanley Fund Services, Inc.                $ 0.412     $-     $-                         $-              16%
with as high a percentage of single         Admiral Administration Ltd.                       $ 0.138 $0.138     $-                         $-              22%
                                            Columbus Avenue Consulting, LLC                   $ 0.100 $0.100     $-                         $-               0%
manager hedge fund assets as third          Gravity Financial, LLC                            $ 0.079 $0.079     $-                         $-            201%
party administrators. Demand for            Total                                            $ 27.547
outsourced back office operations by                                                HF UCITS                                           HF     Growth
large institutional investors has only      Administrators Ranked by Reported HF    $AUA ($b) North                                  UCITS from Q4
                                            UCITS $AUA                               Q2 2010 America Europe                   Asia   Products  2009
solidified this notion.                     RBC Dexia Investor Services               $29.186      $- $29.186                     $-      196     59%
                                            SEI                                       $10.100      $-      $-                     $-       50    -10%
                                            BNY Mellon Alternative Investment
When it comes to producing esti-            Services
                                                                                       $4.504      $- $4.504                      $-             77       -29%
mates, some firms may use their data-       Banque Privée Edmond de Rothschild
                                                                                       $4.265 $0.340 $3.903                   $0.022        N/A            N/A
                                            Europe
base along side information collected       Deutsche Bank Alternative Fund Services    $2.776 $0.319 $2.447                   $0.010         34            N/A
from public sources. As a result of         CACEIS INVESTOR SERVICES                   $2.679      $- $2.679                      $-         11            N/A
                                            UBS Fund Services                          $2.106      $- $2.106                      $-         27           -11%
HFN’s experience in hedge fund data         Harmonic Fund Services                     $2.070 $2.070       $-                     $-        N/A           -25%
collection, we are aware that likely        BNP Paribas Securities Services            $1.800      $- $1.800                      $-        N/A            N/A
no more than 40-45 of the top 100           Citi's Hedge Fund Services                 $0.190      $- $0.190                      $-          3            N/A
                                            Trinity Fund Administration Limited        $0.050      $- $0.050                      $-        N/A            N/A
hedge fund firms may report to any          BDO Simpson Xavier Fund Administration     $0.005      $- $0.005                      $-        N/A            N/A
one database and perhaps the same           Services Limited
                                            Total                                     $59.732
percentage of the top 200 firms. Ad-
                                                                                               Other
ditionally, it is rare for these firms to                                                   Alternatives                                           Growth Number
                                                                                             AUA ($b)     North                                   from Q4     of
report all, or even a majority of their     Other Alternative Assets by AUA ($b)             Q2 2010     America   Europe   Asia       Other        2009   Products
fund products or assets. This means         State Street Alternative Investment Solutions     $282.000 $123.000 $148.000 $11.000           $-         101%     N/A
                                            Citi's Hedge Fund Services                        $136.026 $129.183         $ - $6.843         $-           5%      699
that using a database as the basis for      RBC Dexia Investor Services                         $65.060 $12.273 $49.911 $2.875             $-          N/A      308
estimating hedge fund assets is to          BNP Paribas Securities Services                     $52.000        $ - $49.500 $2.500          $-          N/A     N/A
                                            SS&C Fund Services                                  $45.000 $38.000     $7.000       $-        $-         125%     N/A
make assumptions on the vast major-         BNY Mellon Alternative Investment Services          $30.432 $26.787     $3.644       $-        $-          29%      114
ity of assets using information which       Citco Fund Services                                 $30.000 $20.850     $8.200 $0.950          $-          20%       50
                                            SEI                                                 $26.300         $-       $-      $-        $-           1%     N/A
is very difficult to obtain publicly.       CACEIS INVESTOR SERVICES                            $18.623    $4.814 $13.809 $0.000           $-          -3%      298
However through the variety of ser-         Close Brothers                                       $9.167    $0.231   $8.513 $0.423          $-          -1%       97
                                            HSBC Securities Services*                            $8.880         $-       $-      $-        $-          N/A       78
vices administrators offer, HFN esti-       Maples Finance                                       $7.477    $5.723   $0.941 $0.493      $0.320         -23%       56
mates that third party administrators       U.S. Bancorp Fund Services                           $6.799    $6.799        $-      $-        $-         960%     N/A
                                            Deutsche Bank Alternative Fund Services              $6.523    $2.525   $1.321 $2.088      $0.589         -53%       76
service almost 98% of all hedge fund        UBS Fund Services                                    $5.726    $1.097   $1.083 $2.991      $0.555          17%       57
assets.                                     PNC Global Investment Services                       $3.900    $2.900   $1.000       $-        $-          63%     N/A
                                            Custom House Global Fund Services                    $3.182         $-  $3.182       $-        $-         147%       27
                                            Harmonic Fund Services                               $1.350    $1.350        $-      $-        $-         -60%     N/A
Turning Reported Administered               LEGIS GROUP                                          $1.245         $-  $1.188 $0.018      $0.038          N/A       22
                                            Amicorp Fund Services                                $0.716    $0.621   $0.068 $0.026          $-         173%       12
Assets into a Single Manager Hedge          Meridian Global Fund Services Group                  $0.413    $0.413        $-      $-        $-           2%       16
Fund Industry Estimate                      JD Clark & Co. (A Division of UMB Fund
                                                                                                $0.333    $0.333        $-       $-        $-           32%        22
                                            Services)
                                            Maitland                                            $0.205    $0.205        $-       $-        $-            2%         1
Once a year, following HFN’s Q4             INVESTMENT DATA SERVICES
                                                                                               $0.134         $-        $-       $- $0.134              N/A         4
survey, the results from the 60+ ad-        GROUP (IDS)
                                            Gravity Financial, LLC                             $0.056         $-       $-        $-        $-          -15%         8
ministrators responding are turned          IFCE FUND SERVICES                                 $0.020         $-   $0.020        $-        $-          -53%         2
into an estimate of industry assets.        Banque Privée Edmond de Rothschild Eu-
                                                                                               $0.003         $-   $0.003    $0.000        $-           N/A       N/A
                                            rope
What follows is an explanation of           Total                                             $ 741.57

                                                                             9                                                                   HedgeFund.net
HFN Q2 2010 Hedge Fund Administrator Survey
how this was done at the end of Q4        1) To the administrators unwilling       and influence of the hedge fund in-
2009.                                     to separate fund of funds from hedge     dustry for years.
                                          fund assets, we applied a peer stan-
The results at the end of Q4 2009         dard division of HF to total assets of
were third party administered assets      66% to prevent this form of double         ADMINISTRATORS: HEDGE
of $2.330 trillion. Additionally, HFN     counting.                                  FUNDS ARE COMING BACK
gathered information from 8 small to      2) For administrators either not re-
medium size administrators which          sponding or unable to update figures
                                          from the prior survey, we increased              by Paula Schaap, Senior Reporter,
did not report to the survey to cover                                                                     August 13, 2010
all meaningful sources of third party     their assets a modest 5% to capture
                                          industry asset growth, while not         The word is out on The Street
administered assets. The result from
                                          making assumptions that all grew at
all 68 administrators was $2.401 tril-
lion in hedge fund assets under ad-
                                          industry standard rates.                 Hedge funds are coming back.
                                          3) To eliminate the potential for
ministration (AuA) at the end of Q4
                                          double counting and overestima-          But just how far they are coming
2009. We requested that administra-
                                          tion in the remaining AuA, HFN           back from the bleak days post-Lehm-
tors report funds of funds, managed       reduced the figure by an additional      an bankruptcy and post-Bernard
account, hedge fund UCITS and             percentage between 10-15%. The           Madoff can be hard to tell.
other alternative assets separately.      specific reduction percentage was
                                          chosen as a result of thorough dis-      Except there is a reliable way to gauge
As we become more experienced in          cussions with administrators on the      the health of the asset class: through
surveying administrators, we clearly      challenges faced in reporting pure
                                                                                   talking to those who know hedge
understand there are limitations to       hedge fund assets.                       fund firms’ strengths and weaknesses
how administrators are able to re-
                                        The result of these adjustments is an      most intimately: third-party adminis-
port AuA. This can produce a certain
                                        estimate that single manager hedge         trators.
amount of double counting and over-
                                        fund assets, under all forms of third
estimation in the reported figures.
                                        party administration at the end of Q4 It’s the administrators who see as-
Through conversations with numer-                                               set flows of the vast majority of the
                                        2009 were $2.125 trillion.
ous administrators, we learned these                                            hedge funds and funds-of-funds. Ad-
limitations include:                    To determine an estimate of total in- ministration firms are also the first to
                                        dustry assets from this figure we used know what investors and managers
  1) Certain private equity assets may
  be indistinguishable from hedge
                                        the HFN database to estimate what are demanding when it comes to due
  fund assets                           percentage of hedge fund assets are diligence and reporting.
                                        self administered. We estimate that
  2) Other privately managed pools
  may be indistinguishable from hedge
                                        2.2% of industry assets fall outside Although things have improved in
  fund assets                           of all forms of third party administra- 2010, markets are still volatile. The
                                        tion. To estimate total industry assets HFN Aggregate Index is up 1.89%
  3) Definitions of hedge funds may
                                        at the end of Q4 2008 we increased year-to-date.
  vary from country to country
                                        $2.125 trillion by 2.2% and arrived
  4) Most recent figures may not be     at $2.172 trillion in single manager That didn’t stop investors from put-
  gathered from all clients at the time
                                        hedge fund assets at the end of Q4 ting their money into hedge funds.
  of survey response
                                        2009.
  5) Some firms may not distinguish                                             With 63 administrators reporting,
  between hedge fund and fund of        This figure is larger than some pub- the 2010 Q2 HFN Hedge Fund Ad-
  funds assets                          lished by other industry participants, ministrator Survey put hedge fund
                                                                                assets under administration at about
To best remove these factors and cre- but we believe those using a database
                                                                                $2.4 trillion. Funds-of-funds assets
ate an estimate for single manager as the basis for estimates are missing
                                                                                under administration were about
hedge fund assets, HFN made the a large portion of assets which do not
                                                                                $900 billion.
following adjustments to the report- report to any databases and cannot
ed figures:                             be found publicly and have thus have
                                                                                The average growth rate of the top 20
                                        likely been underestimating the size
                                                                                firms reporting hedge fund assets un-
                                                               10
                                                                                                                         Advent Software
der administration for the first half of    Top 10 HF Administrators by Regional Concentration of Reported $AUA:   % of AUA in   N.A. AUA ($b)
                                            N. America                                                               Region            Q2 2010
2010 was 4.65%. For funds-of-funds          Harmonic Fund Services                                                        100%        $ 14.036
assets the average growth for the top       U.S. Bancorp Fund Services                                                    100%        $ 11.375
                                            Conifer Securities                                                            100%        $ 5.900
20 firms was 1.39% during the same          JD Clark & Co. (A Division of UMB Fund Services)                              100%        $ 4.733
period.                                     Michael J. Liccar & Co., CPAs                                                 100%        $ 4.331
                                            Cortland Fund Services                                                        100%        $ 3.800
                                            Columbus Avenue Consulting, LLC                                               100%        $ 3.800
All that growth augurs well for the         OPUS FUND SERVICES                                                            100%        $ 1.691
hedge fund administration business.         Pinnacle Fund Administration LLC                                              100%        $ 1.396
                                            Gravity Financial, LLC                                                        100%        $ 1.041
                                            Total                                                                                    $ 52.102
Paul Timmins, managing partner and
cofounder of Gravity Financial, says        Top 10 HF Administrators by Regional Concentration of Reported $AUA:   % of AUA in European AUA
                                            Europe                                                                   Region    ($b) Q2 2010
the demand for third-party admin-           RBC Offshore Fund Managers Limited                                            100%      $ 1.731
istration, as well as outsourced chief      Close Brothers                                                                100%      $ 0.125
                                            Banque Privée Edmond de Rothschild Europe                                      94%      $ 0.763
financial office services the firm offers   Northern Trust                                                                 94%      $ 62.857
has been fueled by the smaller fund         BNP Paribas Securities Services                                                92%      $ 33.400
                                            CACEIS INVESTOR SERVICES                                                       76%      $ 61.378
launches that are the hallmark of the       Amicorp Fund Services                                                          72%      $ 1.798
recovering asset class.                     Caledonian Global Fund Services                                                71%      $ 2.657
                                            JPMorgan Hedge Fund Services                                                   66%      $ 24.910
                                            Trinity Fund Administration Limited                                            62%      $ 0.567
“These funds have fewer assets at           Total                                                                                 $ 190.187
launch, so the managers are looking
for high quality, high-touch fund ad- disconnect there.                                         cifically the Dodd-Frank bill with its
ministration services, but at a lower                                                           hedge fund registration requirement
cost,” Timmins says.                    Those services include not only the                     plus the Volcker rule, which will re-
                                        usual demand from managers, but                         quire banks to limit their proprietary
Equinox Alternative Investment Ser- also increased involvement and over-
                                                                                                trading and their stakes in private in-
vices Chief Executive Officer Stephen sight from investors, especially the
                                                                                                vestment firms.
Castree believes the recovery calls on big institutional investors.
administrators to be more creative in                                                           But most of the provisions of the bill,
their service offerings.                Mike Sleightholme, Citi’s Head of                       which was signed into law in July,
                                        Hedge Fund Services, says one thing                     take months to go into effect. Plus,
“Existing managers are looking to his business has seen over the last six
                                                                                                there are many aspects of the bill that
right-size their fixed cost base now months is that the very largest fund
                                                                                                require agency regulation and rule-
that they’re performing again after managers are trying to re-engineer
                                                                                                making, a process that is also likely to
suffering a drawdown in their assets,” their operating models.
                                                                                                take months.
Castree says. “The way to look at it
is by evaluating what they can out- “There are two key drivers for that:                        But Paul Chain, president of AIS
source and then negotiating a con- one is investors pushing for indepen-                        Fund Administration, says the limit
tract where the fee structure is vari- dence of service providers,” Sleight-                    on proprietary trading at the big
able.”                                  holme says. “The other is that manag-                   banks could have a salutary effect on
                                        ers are looking for internal efficiencies               the hedge fund business and, concur-
With hedge funds and their investors in order to improve overall efficiency
                                                                                                rently on administration.
keeping a close eye on their bottom or scalability or to allow them to ex-
line, there is pressure to adjust down- pand into new product areas or geog-                    “You may have someone who was in a
ward, says Joe Holman, Columbus raphies.”                                                       proprietary desk environment, where
Avenue Consulting’s chief executive                                                             they didn’t need an auditor and an
officer.                                Sleightholme also says he has seen                      administrator,” Chain says. “All of
                                        an increase in fund launches in bank                    a sudden you could see demand by
“The problem is that they are also try- debt and distressed debt spaces.
                                                                                                people who probably will get funded,
ing to push down services just when
                                                                                                as opposed to others who are strug-
the investors want the service level to The big news in the first half of 2010
                                                                                                gling to get funded.”
increase,” Holman says, “so there’s a was, of course, financial reform, spe-
                                                                       11                                                        HedgeFund.net
HFN Q2 2010 Hedge Fund Administrator Survey
Another issue facing hedge funds are      Top 10 HF Administrators by Regional Concentration of Reported     % of AUA in    Asian AUA ($b)
                                          $AUA: Asia                                                           Region          Q2 2010
the greater availability of the newer     RBC Dexia Investor Services                                                  43%         $ 3.541
retail products, such as UCITS funds,     Deutsche Bank Alternative Fund Services                                      11%         $ 1.248
                                          Trinity Fund Administration Limited                                          11%         $ 0.101
ETFs and, even, mutual funds.             Maples Finance                                                               11%         $ 1.494
                                          Trident Trust Fund Services                                                  10%         $ 1.935
Within the last few months, Paul-         NAV Consulting                                                                 9%        $ 3.250
                                          Meridian Global Fund Services Group                                            8%        $ 1.019
son & Co. has been reported to be         CIBC Bank and Trust Company                                                    6%        $ 0.671
considering a UCITS fund product,         Banque Privée Edmond de Rothschild Europe                                      6%        $ 0.044
                                          Amicorp Fund Services                                                          3%        $ 0.086
while Ramius is offering a mutual         Total                                                                                   $ 13.388
fund.
                                                                                                              Other
Equinox, which has offices in Ireland     Top 10 HF Administrators by Regional Concentration    % of AUA Regional AUA
                                          of Reported $AUA: Other Regions                       in Region ($b) Q2 2010        Region
and Bermuda, is watching the duel-        UBS Fund Services                                           26%      $ 15.799   Brazil, Paraguay,
ing United States-European Union                                                                                              Uruguay
                                          INVESTMENT DATA SERVICES GROUP (IDS)                         94%     $ 1.954      South Africa
proposed hedge fund regulations           Maitland                                                     68%     $ 1.169      South Africa
closely, according to Castree.            Admiral Administration Ltd.                                   7%     $ 1.072          N/A
                                          IFCE FUND SERVICES                                           40%     $ 0.690          N/A
                                          LaCrosse Global Fund Services                                 2%     $ 0.260     Latin America
The EU put off until September regu-      CIBC Bank and Trust Company                                 2.0%     $ 0.224          N/A
lations that would restrict the ability   Deutsche Bank Alternative Fund Services                       0%      $ 0.05    Mauritius, Brazil
                                          Custom House Global Fund Services                             0%      $ 0.03          N/A
of U.S. funds to offer their products     Total                                                                $ 21.25
unless they have an EU domicile.
                                        “Also, they want to know what per-
“Both jurisdictions are equally at risk
                                        centage of the portfolio is at how
of applying potentially protectionist
                                        many counterparties,” he says.
rulings that will bifurcate the mar-
ket,” Castree says.                     With the future of the U.S. and glob-
                                        al economy still uncertain and with
Sleightholme says that while there
                                        regulation ready to go, but still not
hadn’t been “a stampede by any
                                        quite there, hedge fund administra-
stretch of the imagination,” the trend
                                        tors were cautiously optimistic about
of hedge funds launching retail prod-
                                        what to expect from the asset class.
ucts is happening.
                                       “The one thing you’re starting to
“We may see more of it as more man-
                                       see as money gets allocated to hedge
agers are pushed down the registra-
                                       funds,” Chain says, “is that it goes to
tion street anyway, so it isn’t such a
                                       the big established players first and
big leap to take it a step further.”
                                       then works its way down the chain.”
The trend of investors, especially big
                                       “I think we’re at the very early stage
institutional investors, driving de-
                                       of that healing,” he says.
mand for more administration ser-
vices has only increased in 2010, ad-
ministration executives agree.

“We’ve seen a lot more demand to-
ward transparency,” Holman says,
“But not in the traditional sense.
What we’ve seen is investors wanting
to know what percent of their portfo-
lio is market quote, what is modeled
and what is private?

                                                                     12
                                                                                                                                      Advent Software


                                                             AGGREGATED RESULTS


                                                                               Hedge     Funds of     Managed        HF     Other Alterna-   Total Reported
Administrators Ranked by Total Reported Alternative Asset AUA ($b) Q2 2010     Funds      Funds       Accounts    UCITS         tives        Alternative AUA
State Street Alternative Investment Solutions                                 $ 281.000 $ 57.000           N/A         N/A     $ 282.000           $ 620.000
Citco Fund Services                                                           $ 420.000 $ 115.000          N/A         N/A      $ 30.000           $ 565.000
Citi's Hedge Fund Services                                                    $ 148.003 $ 61.095       $ 2.008      $ 0.190     $ 136.026          $ 347.323
BNY Mellon Alternative Investment Services                                    $ 206.356 $ 45.370           N/A      $ 4.504     $ 30.432           $ 286.662
SEI                                                                            $ 75.200 $ 76.500       $ 4.000    $ 10.100      $ 26.300           $ 192.100
Goldman Sachs                                                                 $ 191.200        N/A         N/A         N/A            N/A          $ 191.200
HSBC Securities Services*                                                     $ 130.847 $ 50.468           N/A         N/A         $ 8.880         $ 190.195
SS&C Fund Services                                                            $ 106.000 $ 30.000           N/A         N/A      $ 45.000           $ 181.000
Prime Fund Solutions*                                                          $ 77.260 $ 94.240           N/A         N/A            N/A          $ 171.500
UBS Fund Services                                                              $ 61.446 $ 86.649       $ 1.094      $ 2.106        $ 5.726         $ 157.021
BNP Paribas Securities Services                                                $ 36.200 $ 42.000           N/A      $ 1.800     $ 52.000           $ 132.000
CACEIS INVESTOR SERVICES                                                       $ 81.146 $ 17.670       $ 2.164      $ 2.679     $ 18.623           $ 122.282
GlobeOP Financial Services**                                                  $ 121.000        N/A         N/A         N/A            N/A          $ 121.000
RBC Dexia Investor Services                                                     $ 8.177 $ 12.896           N/A    $ 29.186      $ 65.060           $ 115.319
Northern Trust                                                                 $ 67.008 $ 18.790           N/A         N/A            N/A            $ 85.798
Morgan Stanley Fund Services, Inc.                                             $ 82.037        N/A     $ 0.412         N/A            N/A            $ 82.449
PNC Global Investment Services                                                 $ 31.700 $ 39.300           N/A         N/A         $ 3.900           $ 74.900
JPMorgan Hedge Fund Services                                                   $ 38.000 $ 35.000           N/A         N/A            N/A            $ 73.000
Deutsche Bank Alternative Fund Services                                        $ 10.903 $ 33.735       $ 3.882     $ 2.776       $ 6.523             $ 57.819
Custom House Global Fund Services                                              $ 27.061    $ 6.768     $ 1.909         N/A         $ 3.182           $ 38.920
NAV Consulting                                                                 $ 35.000    $ 2.000         N/A         N/A            N/A            $ 37.000
Maples Finance                                                                 $ 13.713    $ 3.335         N/A         N/A         $ 7.477           $ 24.525
Omnium*                                                                        $ 21.934    $ 0.319     $ 1.669         N/A            N/A            $ 23.922
Banque Privée Edmond de Rothschild Europe                                       $ 0.808 $ 17.323       $ 5.162      $ 0.004      $ 0.003             $ 23.299
Admiral Administration Ltd.                                                    $ 14.387    $ 7.298     $ 0.138         N/A            N/A            $ 21.823
Trident Trust Fund Services                                                    $ 19.346    $ 0.709         N/A         N/A            N/A            $ 20.055
AIS Fund Administration                                                        $ 20.000        N/A         N/A         N/A            N/A            $ 20.000
JD Clark & Co. (A Division of UMB Fund Services)                                $ 4.733 $ 14.274           N/A         N/A           0.333           $ 19.340
Harmonic Fund Services                                                         $ 14.036    $ 0.105     $ 1.050      $ 2.070        $ 1.350           $ 18.611
Kaufman Rossin Fund Services                                                   $ 15.200    $ 2.200     $ 1.000         N/A            N/A            $ 18.400
Swiss Financial Services Limited Holdings                                       $ 5.682 $ 10.286           N/A         N/A            N/A            $ 15.968
LaCrosse Global Fund Services                                                  $ 15.200        N/A         N/A         N/A            N/A            $ 15.200
Meridian Global Fund Services Group                                            $ 12.813    $ 1.341         N/A         N/A         $ 0.413           $ 14.567
CIBC Bank and Trust Company                                                    $ 11.184    $ 2.052         N/A         N/A            N/A            $ 13.236
U.S. Bancorp Fund Services                                                     $ 11.375     $ 0.461        N/A         N/A            N/A            $ 11.836
Apex Fund Services Ltd                                                         $ 10.546    $ 0.811         N/A         N/A            N/A            $ 11.357
Nottingham Investment Administration                                           $ 10.100    $ 0.050         N/A         N/A            N/A            $ 10.150
Close Brothers                                                                  $ 0.125    $ 0.721         N/A         N/A         $ 9.167           $ 10.014
Conifer Securities                                                              $ 5.900        N/A     $ 2.000         N/A            N/A             $ 7.900
ALPS Price Meadows                                                              $ 5.850    $ 1.890         N/A         N/A            N/A             $ 7.740
Michael J. Liccar & Co., CPAs                                                   $ 4.331    $ 1.534     $ 0.881         N/A            N/A             $ 6.746
RBC Offshore Fund Managers Limited                                              $ 1.731    $ 4.052         N/A         N/A            N/A             $ 5.783
Maitland                                                                        $ 1.707    $ 3.085         N/A         N/A        $ 0.205             $ 4.997
Columbus Avenue Consulting, LLC                                                 $ 3.800    $ 0.800     $ 0.100         N/A            N/A             $ 4.700
MadisonGrey Fund Services                                                       $ 4.322    $ 0.138         N/A         N/A            N/A             $ 4.461
Amicorp Fund Services                                                           $ 2.492    $ 0.702         N/A         N/A         $ 0.716            $ 3.909
Cortland Fund Services                                                          $ 3.800        N/A         N/A         N/A            N/A             $ 3.800
Caledonian Global Fund Services                                                 $ 3.723        N/A         N/A         N/A            N/A             $ 3.723
INVESTMENT DATA SERVICES GROUP (IDS)                                            $ 2.086    $ 1.198         N/A         N/A         $ 0.134            $ 3.418
Circle Partners                                                                 $ 1.450    $ 1.300         N/A         N/A            N/A             $ 2.750
Equinoxe Alternative Investment Services                                        $ 1.500    $ 1.000         N/A         N/A            N/A             $ 2.500
ISIS Fund Services                                                              $ 2.088    $ 0.406         N/A         N/A            N/A             $ 2.493
LEGIS Group                                                                        N/A       $0.879        N/A                     $ 1.245              $ 2.124
IFCE FUND SERVICES                                                              $ 1.725    $ 0.275         N/A         N/A         $ 0.020            $ 2.020
BDO Simpson Xavier Fund Administration Services                                 $ 0.392    $ 1.540         N/A         N/A            N/A              $ 1.932
Pinnacle Fund Administration LLC                                                $ 1.396    $ 0.477         N/A         N/A            N/A             $ 1.873
OPUS FUND SERVICES                                                              $ 1.691        N/A         N/A         N/A            N/A             $ 1.691
Trinity Fund Administration Limited                                             $ 0.915    $ 0.585         N/A      $ 0.050           N/A             $ 1.550
Gravity Financial, LLC                                                          $ 1.041    $ 0.036     $ 0.079         N/A        $ 0.056             $ 1.212
G&S Fund Services                                                               $ 1.100        N/A         N/A         N/A            N/A             $ 1.100
Eisner Fund Services, LLC                                                       $ 1.000    $ 0.055         N/A         N/A            N/A             $ 1.055
BGT Fund Administration                                                         $ 0.420    $ 0.060         N/A         N/A            N/A             $ 0.480
Gemini Fund Services                                                            $ 0.329    $ 0.072         N/A         N/A            N/A             $ 0.401
Total                                                                        $ 2,516.51   $ 940.85      $ 33.55     $ 55.47     $ 743.03          $ 4,290.65


                                                                                   13                                                          HedgeFund.net

				
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