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Opalesque Industry Update - Hedge fund managers are continually reviewing their relationships with fund administrators, fund custodians, prime
brokers, fund auditors, fund marketers and law firms to ensure that they are getting the services they need. A quarter
of all hedge fund managers surveyed by Preqin at the end of 2016 changed at least one service provider over the
previous year. Of these, 75% changed one service provider, 18% changed two, while 7% changed three or more
service providers over the year. Managers had two leading concerns when changing service provider: cost and quality
of service. Firms that switched administrator, custodians, auditors and law firms most likely did so because of cost,
while those that changed prime brokers and marketers mostly did so for reasons of dissatisfaction with the service
they received. Key Hedge Fund Service Provider Facts:
"Service providers are a vital part of the hedge fund landscape, assisting in the smooth running of operations. They perform a range of vital services in the industry, such as custody and valuation of assets, facilitating securities lending, providing advice on regulation and fund terms, and assisting with the fundraising and investor subscription processes. In order to retain hedge fund clients and win new business, service providers need to address concerns over cost and quality of service, particularly as investor scrutiny over fees and performance continues to grow. These firms will need to maintain a careful balance by improving their service offering while still reducing costs." The full report is available here. |
Industry Updates
Hedge funds demand value from service providers
Thursday, May 11, 2017
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