New Managers May 2012

Servicers' Spot
Citco: Administrators can help hedge funds face today's rapid evolution

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Citco: Administrators can help hedge funds face today's rapid evolution

Oliver Scully

According to Citco's latest Industry Spotlight, a new quarterly newsletter from the financial services firm, administrators can in fact "facilitate the rapid evolution" of the alternatives sector - as indeed investors and regulators are driving that rapid evolution by demanding access to more data, among other things.

So how can administrators help hedge funds? Here are some of the points listed by William Keunen, Global Director, at Citco Fund Services:

1. As investors want independently generated data, they will rely on administrators to provide transparency. The OPERA initiative, which Citco is part of, is a step towards creating reliable data that can be aggregated meaningfully.

2. As new regulatory and tax compliance requirements will be expensive, fund managers will look for creative ways to reduce or deflect costs, exploring technology and operations outsourcing opportunities, even staff â€˜lift-outs'. This is where service providers come in.

3. As the hedge fund industry is gearing itself for more regulations, Citco can help managers deliver Form PF to the SEC, Form SLT, offer valuation and depositary services for compliance with the AIFMD and help to prepare for FATCA compliance. Citco has set up a dedicated Regulatory Reporting team to address the increasing demand from regulators.

4. Good corporate governance is now de rigueur. Service providers, including Citco, can help implement it.

An evolving relationship between administrators ......................

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.