BNY Mellon Alternative Investment Services (AIS), the hedge fund administration division, has topped $400 billion in assets under administration.
BNY Mellon claims that makes it the second largest provider of solutions to hedge funds, funds of hedge funds and private equity investments globally. Citco is the largest administrator, while State Street is now believed to be the third largest.
Since 2008, BNY Mellon AIS has doubled its alternative assets under administration, fueled by increased market share and its acquisition of PNC’s Global Investment Servicing business last year. The company has seen growth both in the number and complexity of fund structures serviced, plus strong demand for its prime custody offering as more hedge fund managers opt for an independent third-party provider to handle custody, cash management and other specialized services. AIS is custodian for more than $120 billion in hedge fund assets, in addition to the over $400 billion it currently administers.
“Alternative asset service providers will increasingly be looked upon to provide both the alternative solutions as well as the transparency managers want,” says Brian Ruane, CEO of BNY Mellons Alternative and Broker-Dealer Services. “Reaching this milestone is an achievement in itself, but the way in which we’ve grown our business globally attests to our ability to meet client needs in an evolutionary phase for the industry.”
Ruane noted global macro hedge funds and those offering exposure to commodities, distressed debt, or requiring ‘prime custody’ services, are among the fastest-growing segments of the global hedge fund services business. “We expect these trends to hold steady in 2011,” he adds.
(CG)