Fund services provider Citco is nearing $1 trillion in assets under administration (AuA) following a wave of new private equity and real estate fund outsourcing mandates.
Citco reported AuA of $950 billion at the end of 2017, up by nearly 16% year-on-year, largely due to growth in real assets by alternative fund managers.
It also reported new private equity mandates in the US, Europe and Asia-Pacific helped offset negative flows in global macro and multi-strategy fund managers
“Large changes taking place within the industry and the need to meet changing client demands has enabled Citco to reach a milestone of $900bn assets under administration,” said Jay Peller, head of Citco Fund Services.
“We anticipate the key drivers of fee compression, changing regulations and increased investment complexity will continue to shape the industry and lead to expanded product offerings across asset classes.”
According to a recent report by Citco into the alternative investment space, only 25-30% of asset managers invested in private equity and real estate funds outsource to a third-party administrator.
In addition for hedge funds, the report predicted greater diversification in the hedge fund industry, not just into private equity assets but also in hybrid strategies and regulated on-shore funds.
This trend, Citco predicts, will lead to a greater number of fund administrators offering bespoke solutions, rather than a traditional standard model.
To meet these trends, Peller said Citco has increased investment in its outsourcing platform to build its real asset capabilities.
“As we look forward to achieving our next milestone AuA target of $1 trillion, we take great pride that each milestone is a huge vote of confidence from our clients,” added Peller.
Earlier this week, tech giant SS&C Technologies reported AuA of $1.52 trillion in 2017, of which a third of assets were private equity.