Executive Vice President • State Street • Boston •
“I’ve been in the financial services business for 25 years, and the growth in the hedge fund business from the late-90s to today has been phenomenal and probably unprecedented,” says Gary Enos, executive vice president at State Street and head of relationship management and client strategy for the alternative investment solutions business.
Many factors contributed to this, but Enos says that perhaps the single most important factor was “the flight to the hedge fund business not just by high-net-worth individuals but also institutional investors.”
It’s been a period that Enos has witnessed from the ground during nearly 25 years at State Street-which he has also seen grow at the same time. He joined State Street in the mid-1980s from KPMG Peat Marwick. He’s helped overhaul State Street’s mutual fund expertise, global expansion in Europe and spearheaded the acquisition of its hedge fund administration company, IFS, in 2002. Enos says State Street has been able to weather the current financial storm better than others because of its strategy of organic growth and acquisitions in areas where it didn’t have experience, such as the alternative investment business that has grown so much.
When hedge funds first got off the ground, the few number of players in the market stacked the deck in favor of self-administration. But the explosive growth-and ever-increasing complexity-has created a much stronger hand for administrators. “That’s why hedge fund administration in the last two years has been outsourced to levels that were never thought of 15 or 20 years ago.” Enos sees more pressure ahead for hedge fund administrators to deliver more tools to give more transparency to valuations and more frequent valuations. Many risk tools will start becoming part of the administrative offering as well.
“The day of self administration is probably nearing to an end,” Enos says.