The Global Fund Services division at Bank of Bermuda has formed a joint venture agreement with South Africa-based Investment Data Services (IDS) to offer third party fund administration to the hedge fund industry in South Africa.
IDS is a South African registered and Cape Town domiciled investment administration company specialising in the administration of niche investment products and markets. The company was formed in 2002 initially to provide sub-register administration for foreign domiciled unit trusts and mutual funds sold in South Africa. The company is also registered to provide services as a so-called non-discretionary linked investment service provider (LISP).
The new joint venture company, Global Fund Services (South Africa) (Pty) Limited, will be majority owned by Bank of Bermuda. It will provide a full range of services to alternative investment funds incorporated in South Africa, including specialised fund accounting and valuation, sales and marketing, relationship management and legal and compliance support. Specialised accounting will be provided using the accounting platform – Advent Geneva – that the bank uses in New York, Dublin and Hong Kong.
“Our partnership with Advent Software has enabled us to offer our clients leading fully automated technology solutions to support the back office reporting requirements of a wide range of structures,” says Alan Smith, Head of Strategy, Marketing and Special Projects for Bank of Bermuda’s Global Fund Services division. “Our success in this area has been a key driver of our sales and marketing expansion globally and we are excited about the new opportunity of servicing the South African market.”
Bank of Bermuda says that IDS has strong links with both the Association of Collective Investments (the organisation pushing for the proposed legislation) and the investment community in South Africa. The firm currently offers investor services to life and unit trust companies. The idea is that these services, together with the hedge fund services provided by GFS, will provide local fund managers with a comprehensive range of fund administration services.
“The South African alternative investment market is fast developing and we expect new legislation shortly, which will facilitate the establishment of hedge funds,” says Paul Smith, Head of Bank of Bermuda’s Global Fund Services. “Given our core focus is on servicing specialist and emergent managers with complex needs, this growing segment of the market is an ideal strategic fit for our business. We will be the first dedicated provider of solutions tailored specifically for this market.”
Global Fund Services (South Africa) (Pty) Limited will be based at IDS’s current premises in Cape Town, and managed by a board of directors made up of staff from Bank of Bermuda and IDS.
“Over the past five years, investment groups have started outsourcing their fund administration,” says Ian Hamilton, Chief Executive Officer of IDS. “However, most third party administrators taking on this business offer services for traditional long only funds, which are not tailored for the requirements of hedge funds. Our core investor services offering coupled with the expertise and long experience of Bank of Bermuda’s Global Fund Services, provide a powerful fund services solution to managers in South Africa.”