The Alternative Investment Management Association (AIMA) has published an updated guide for hedge fund managers when selecting a fund administration.
The guide, previously published in 2009, has been amended to reflect changes to standards in areas including cyber security, recordkeeping and anti-money laundering checks.
It has also been designed to take into account changes imposed by AIFMD and Dodd-Frank regulations.
According to AIMA, the guide reflects the modern fund administration sector which has expanded as hedge fund managers and other alternative investment managers continue to diversify.
The guide also offers guidance on how managers should regularly assess their existing administrators.
Recent research from Preqin revealed 31% of surveyed fund managers changed a fund administrator in 2016 with cost, investor concerns and dissatisfaction with service cited as key drivers to switching providers.
“Fund administrators are an essential part of the alternative investment ecosystem and their role has never been more important as regulations and standards have evolved since the financial crisis,” said Jack Inglis, CEO at AIMA.
“We believe our new guide will be a valuable tool for alternative investment managers when it comes to navigating this complex but vital space.”
PwC and SS&C GlobeOp served as sponsors for the guide.
“To have a successful long-term partnership with an administrator, an investment manager should choose a provider that can meet current needs and can scale to support future needs,” said Edwin Chan, senior director EMEA business development at SS&C GlobeOp.
“Today’s alternative fund management environment is evolving quickly. This guide will help investment managers navigate the changes efficiently and confidently.”
Global Custodian will release its annual Hedge Fund Administration Survey later this summer.