Meridian Maple

Carbon360 releases list of ‘Top 40 Administrators’ illustrating sweeping impact of hedge fund industry asset losses

For the Top 40 administrators, the force of hedge fund asset losses translated into an overall decline in assets under administration (AUA) of -24%.

The 2009 Fact Book is a comprehensive, 500+ page in-depth industry analysis of 150 administrators (market breakdown, growth, revenues, costs, and profit) and identifies trends in the fund administration space.

To obtain the full ranking, intelligence and competitive matrix of all 150 administrators, please go here:
https://www.carbon360.com/viewAbstract.do?documentID=7225.

Top 5 administrators
While Citco Fund Administration saw its assets decline by -33%, the administrator remained firmly at the top of the list with an AUA of $440bn, staying $188bn ahead of its nearest competitor – State Street. SEI was a newcomer to the top of the list, increasing its AUA by 18% to achieve $205bn, while Fortis Prime Fund Solutions and The Bank of New York Mellon each suffered setbacks but managed to secure fourth and fifth place rankings. Altogether, these five represent $1,296tln of the 2.8tln assets administered by third party service providers.

Largest asset base increases went to administrators under $100bn
Number 14 ranked Northern Trust gained an astounding 90% in AUA adding 40bln in assets year over year, but industry volatility was such that this only meant saw the firm moving up 6 places from its previous ranking of 21. Other firms that were able to increase assets even as the industry shrank by historic records include AIS Fund Administration (+29%), SEI (18.%), JP Morgan Fund Services (14%), and Ophedge Investment Services (13%). Of these five increases, four took place in administrator firms with less than $100bn in AUA.

While largest declines tended to hit bigger firms
The largest declines in assets hit the following firms: HSBC Securities Services (-46%), Caceis (-44%), Citi (-43%), CIBC (-39%), and RBC Dexia (-39%).

While the top 11 firms all have assets over $100bn, ten saw asset declines. Out of the remaining 29 firms (with AUA under $100bn), seven managed to increase assets during the turbulent period.

M&A will likely define changes to administrator industry in 2010
Carbon 360° has determined that asset level drops have seen hedge fund managers utilizing fewer available administrator services, resulting in a 5% drop in fees to 7.78bps for single strategy funds and to 6.5bps for fund of funds. This has impacted administrator profits, contributing to an industry income decline of -27% and may well result in increased M&A activity within the administrator space in the future.

The Top 40 Hedge Fund Administrators:

Company

Total 2009 ($ Billions)

Total 2008 ($ Billions)

% Change

1

Citco Fund Services (USA) Inc.

440

664

-33.7

2

State Street

252.3

326.8

-22.8

3

SEI

205

173

18.5

4

Fortis Prime Fund Solutions

200.5

325.6

-38.4

5

The Bank of New York Mellon

199.5

248

-19.6

6

Citi*

192

342

-43.9

7

HSBC Securities Services

173.49

324.5

-46.5

8

Goldman Sachs Administration Services

156.7

201.8

-22.3

9

UBS Global Asset Management Alternative Fund Services

153.9

228.4

-32.6

10

Caceis

113.49

205.4

-44.7

11

SS&C Fund Services

110

140

-21.4

12

JPMorgan Hedge Fund Services

96

83.9

14.4

13

GlobeOp Financial Services

91

109.5

-16.9

14

Northern Trust

84.5

44.4

90.3

15

BNP Paribas*

82.6

76.05

8.6

16

PNC Global Investment Servicing

75.7

120.9

-37.4

17

Butterfield Fulcrum*

75

74.8

0.3

18

Morgan Stanley

73

91.5

-20.2

19

Société Générale Securities Services

54.56

65.7

-16.9

20

Ophedge Investment Services

39

34.5

13

21

RBC Dexia

35.29

57.9

-39.1

22

NAV Consulting, Inc.

32

31

3.2

23

Heritage International**

31.91

40

-20.2

24

Admiral Administration

30

34.6

-13.3

25

HedgeServ

25

n/a

n/a

26

Custom House Global Fund Services Ltd*

24.91

40.2

-38

27

Trident Trust

20.04

26.3

-23.8

28

Citadel Solutions LLC

19.97

30.3

-34.1

29

Harmonic Fund Services

19

25.47

-25.4

30

Maples Finance**

18.03

22.6

-20.2

31

Spectrum Global Fund Administration**

17.5

22.5

-22.2

32

UMB Fund Services

16.69

n/a

n/a

33

Anson Fund Managers**

15.96

20

-20.2

34

AIS Fund Administration

15.5

12

29.2

35

Kaufman Rossin Fund Services, LLC

14.7

17.09

-14

36

CIBC

14

23

-39.1

37

Caledonian Global Fund Services

12.7

18

-29.4

38

Lacrosse Global Fund Services**

11.57

14.6

-20.8

39

NottinghamInvestment Administration

10.8

n/a

n/a

40

Meridian Fund Services

10.61

15.8

-32.8

Total for Top 40

3264.42

4332.11

-24.65

* Restated 2008 AUA

** Estimated

About Carbon360° Research
Carbon 360 Research is a leading provider of technology and operations research for the institutional investment community and is the publisher of the annual "Fund Administration Fact Book", a comprehensive report on the global fund administration industry. The company was founded in 1997 and is headquartered in New York City.

Carbon provides financial institutions with the comprehensive information necessary to evaluate the competitive supply market in software development, information and operating systems.

Carbon provides clients with qualitative and quantitative analysis of vendors available through in-depth product guides, vendor profiles, vendor comparisons, user surveys, and analysis of industry trends.

Website: www.carbon360.com.

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