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From Kirsten Bischoff, Opalesque New York:

Institutional investors are only one segment of the investing population driving the demand for managers to adopt third party administrators. "I think everybody in the fund business, whether you are a major institution or a small fund, is demanding managers have a third party administrator in place and are not trying to do the books themselves," says Rob Schaeffer, HBM Group Managing Director. "Even seed investors want to see that type of infrastructure in place."

HBM Fund Services Group (www.hbmgroup.com), launched in the beginning of 2009 as a full service provider of middle and back office support, fund administration for hedge funds, fund of hedge funds, and private equity funds. Early 2009 was not necessarily the type of environment conducive to launching a new business, however HBM exceeded their own expectations in their first quarter, a success driven in part by the growing investor demand that hedge funds use third party administrators.

The shift in investor demand, a whiplash inducing reversal driven largely by the opacity that made it possible for fraud to occur, is palpable. The Financial Times reported this week, "it seems a foregone conclusion that the vast majority of US hedge funds will move to some form of independent administration." (......................

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