Mon, Jan 26, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Asia Pacific Intelligence

Middle office solutions firms merge and announce Hong Kong as global base

Thursday, September 05, 2013

HFO and GFS Pty Ltd announced a merger this summer with added news that the combined company will be headquartered in Hong Kong. In an interview with Opalesque, Ben Parker, HFO founder and ceo of the company, explained that his firm provides middle and back office operational solutions to managers, so they fit between the manager and the execution and portfolio management processes and between fund administrators and prime brokers. Their target market is hedge funds, family offices and institutional funds.

"We are an alternative to resourcing those functions internally," Parker says. "We are an institutional scalable option to running those functions in-house." Parker has impeccable hedge fund credentials having been CEO and CFO of Tudor-seeded Arnott Capital in Sydney for five years and before that the London representative for SAC Capital (in happier times for that company) for five years.

Arnott Capital built up to $1bn under management but was hit by the global financial crisis. "At Arnott, as a hedge fund, we had invested in building our own internal support system and we saw an opportunity to support our peers who were struggling to find the expertise. So we kicked off in 2010 supporting other hedge funds and small family offices and our business has grown to where we now support about 40 individual funds" Parker says.

The merger with GFS came as Parker realised the firm had a similar mind set to HFO. "They had heavily invested in systems and infrastructure and we saw quite an overlap in what we were doing and similar core systems, vendor systems and we believed that by partnering we could service their existing functions and help them reduce costs."

Parker also has expansion plans to continue with system development and expand the company's geographical presence to Europe and the US.

Looking specifically at the Asian market, Parker says: "There's been a growth in Asian-based strategies being run out of Asia whereas years ago many would have been run out of London or the US - it's a growing trend for placement of portfolio management talent in Asia itself."

Parker says that Hong Kong represents about 50% of hedge funds in the region whether by number of managers or assets under management and that is followed by Singapore with about 20% and then Australia with less than 10% and the rest spread across Asia. "For us, Hong Kong was the natural place for us to have our head office.  It will be our base for growth not just in Asia but for targeting opportunities in Europe and the US."

Parker believes it is still a struggle for smaller managers to get started. "That is part of the demand for what we are doing as we are a cost-effective option for a manager.  From a functional perspective we don't care what size they are but there is greater demand from managers in the sub $200m category."

Parker says the business model works because they are not just hedge fund-focussed but also work with family office and institutional managers. "There is definitely increasing demand for outsourcing across the board, from 25-30% managers focused on outsourcing to keep overheads low and those numbers are growing. It's great for us," he says.

This piece first appeared in Opalesque on 14th August.

 
This article was published in Opalesque's Asia Pacific Intelligence our monthly research update on alternative investments in the Asia-Pacific region.
Asia Pacific Intelligence
Asia Pacific Intelligence
Asia Pacific Intelligence
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Commodities - Druckenmiller alums at PointState make $1 billion on oil, Andurand Capital sees oil sliding to $40[more]

    Druckenmiller alums at PointState make $1 billion on oil From Bloomberg.com: Hedge fund manager Zach Schreiber stood on stage at Avery Fisher Hall in New York eight months ago and made a bold prediction. “We believe crude oil is going lower -- much lower,” Schreiber, 42, told the audienc

  2. Investing - David Einhorn discloses a new position in Time Warner, Canyon trimming bets on mortgage bonds after making $7bn[more]

    David Einhorn discloses a new position in Time Warner From FTLeavenworthlamp.com: …Einhorn also disclosed a new position in Time Warner. "Since 2009, TWX has refocused its business into a collection of high quality assets including basic cable networks (Turner and CNN), a movie studio (

  3. Top performing private equity firms you should invest in[more]

    Komfie Manalo, Opalesque Asia: Professor Oliver Gottschalg of Paris-based HEC Business School, also known as Ecole des Hautes Etudes Commerciales de Paris has released his annual ranking of the top performing private equity firms. The 2014 HEC-DowJones Private Equity Performance Ranking

  4. Comment - Why invest in hedge funds if they don't outperform the market?[more]

    From Forbes.com: Hedge funds have always been a bit exotic and an enigma to some, but bottom line they are supposed to produce good returns using a range of strategies including global macro, event driven and relative value (arbitrage). And, sophisticated or high-net-worth individuals (HNWIs) could

  5. Owen Li 'truly sorry' for blowing up $100m of hedge fund’s assets[more]

    From CNBC.com: A hedge fund manager told clients he is "truly sorry" for losing virtually all their money. Owen Li, the founder of Canarsie Capital in New York, said Tuesday he had lost all but $200,000 of the firm's capital—down from the roughly $100 million it ran as of late March. "I take r