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From Kirsten Bischoff, Opalesque New York:

The hedge fund administration space is expected to contract further through M&A as the responsibility of providing higher levels of hedge fund transparency falls to administrators. The expectations are that regulation, along with other macro factors such as continued deleveraging and asset stagnation will stretch many of the small- and mid- sized fund administrators too thin for survival.

"Stagnation is the word for the past year. Most of the growth at hedge fund administration firms has been performance driven growth of the underlying funds. So far some administrators have added a few clients, but growth has been very modest," says Dan Golyanov, Director at Carbon360, the research firm that publishes yearly industry directory "The Fund Administration Factbook".

The last publicized acquisition in the administration space was in July when Lacrosse purchased Bank of America Merrill Lynch's fund administration business. Struggling administrators may be struggling to find buyers or partners more than they have in the past, and Saran Kanagaraj, CEO of Short Hills based administrator Variman expects more small administrators will merge, be acquired or simply close dow......................

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