Citco, the HFA provider with the largest survey response pool observed that 2020 marked a seminal shift for the hedge fund industry as managers were forced to adapt to the
pressures of the pandemic, both in front-office decision-making and in terms of moving operations to a remote and work-from-home environment. “Naturally,” said a Citco spokesperson, “the fund administration sector was forced to adapt alongside, and never
has there been greater emphasis on the need for streamlined, cloud-based, and SaaS technology offerings.
“The new working environment that stemmed from the global pandemic only spurred the pace of adoption, where a transition to virtual operational due diligence (ODD) increased the demand for digitised investor reporting, KYC and AML offerings; spiking trade volumes tested the strength of middle-office systems, and an increase in digitised communications
put renewed importance on secure information transfer and document management.”
BNP Paribas, one of the survey outperformers in 2021, has in recent months bolstered its digital offering to hedge fund managers and their investors with enhancements to its hedge fund services web portal. “The enhancements address the growing pressures hedge
funds are facing from investors and regulators around tailored reporting and transparency,” says the bank. “These pressures are compounded by industry convergence and the greater
variety of investor types with specific requirements investing into liquid alternative strategies.”
Apex, meanwhile, with one of the three largest response pools in the survey, notes that, “The initial challenges have driven everyone to push boundaries and explore new ways of operating which in many cases have proved to be efficient ways and will become the way forward.”
Under trying operational circumstances, it is a credit to HFA administrators as a whole that the average score of 6.02 for the survey remains, if only just, in Very Good territory (6.00-6.99). Client Service has even risen a few basis points, possibly as a result of more frequent engagement by respondents with HFAs’ client-facing teams, even if this contact has been largely virtual. Even Operations and Investor Services, which experienced the biggest decline in scores, remain well thought of with averages of 5.98 and 5.85 respectively.
Respondents completing the survey questionnaire were offered a sliding scale in each service category from Unacceptable to Excellent. The published results use Global Custodian’s conventional seven-point scale familiar to readers of the magazine (where 7.00 equals Excellent and 1.00 equals Unacceptable). There was also an optional comment box per category, allowing us to gather a richer and more nuanced view of client experiences.
Ten responses were the minimum sample number required to assess a service provider. This year, eleven HFA providers have passed that threshold.
Subscribers to Global Custodian can access the full survey here. If you do not have a subscription and are interested in accessing the survey, please contact ana.peralta@globalcustodian.com.