Citigroup has launched a new global operating platform for hedge funds. The offering covers the full operating cycle of a hedge fund, and aims to standardise applications and processes across all of Citi’s markets.
According to Marion Mulvey, head of Alternative Investment Administration Services for Europe, the Middle East and Africa, Citi: “As we have large clients that have US and European fund ranges, and with all the noise in the press in Europe about re-domiciliation, and EU type funds [UCITS] We felt it important for our offering to provide our clients with a consistent technology platform across the regions. This was one of the primary objectives for the Global Operating Model.”
The platform, now live, has been in developement for a number of years. Citi’s acquisition of hedge fund administrator Bisys in August 2007 created a number of different platforms within Citi’s hedge fund business. “Our model is global and consistent in all locations, which wasnt always the case obviously where Citi took over the Bisys business, there would have been some legacy technologies in place, which differed region to region,” said Mulvey.
“We took a multi-year plan to create this platform,” added Mary Lumetta, Director, Product Development, Citi Hedge Fund Services. “The key is we took into account all the local realities of clients, whether they be EU or onshore/offshore.”
One of the major drivers for the development of the platform has been the number of hedge funds creating UCITS vehicles – or ‘Newcits’. According to data from Hedge Fund Research, there are now more than 200 Newcits funds, with demand continuing to grow.
“The market that is very crucial right now is hedge funds setting up new EU products. [Our] global operating model means that we service their EU and their existing Cayman product on the same platform,” said Mulvey.
The new platform ties into Citi recent launch an end-to-end service for EU domiciled hedge funds. The service includes prime finance, custody, middle office support, fund administration, corporate secretarial services, distribution support, fiduciary services and compliance monitoring.
The new product aims to provide full suite of services required to support the industry demand for both UCITS and non-UCITS structures. According to KdK Asset Management, 80% of established fund of hedge fund providers intend to launch some form of UCITS-investing vehicle over 2010
Speaking to GlobalCustodian.com about the EU launch, Citi’s Andrew Gelb, Head of Securities and Fund Services in Europe, Middle East & Africa explained that the product was launched due to the rising wave of interest in these kinds of structures.
Citi already has clients live on the global platform and is moving existing clients onto the new platform throughout 2010.
The new platform for hedge funds includes STP for high volume trade processing; complex pricing; bank debt accounting capabilities; Standardized Web-based reports; integration with Citis Global Custody, Middle Office and Prime Finance platforms; and on-and off-shore investor allocations covering side pockets, management fee calculations, capital activity, and master/feeder structures.