AlphaMetrix has acquired Spectrum Global Fund Administration, creating an independent full-service hedge fund platform with approximately $20 billion in client assets and more than 100 managers. Terms of the acquisition were not disclosed.
The acquisition is part of a greater trend of consolidation among boutique hedge fund administrators. Most recently, in November, Equinoxe and MadisonGrey merged to create a global administrator with $7 billion in assets under administration.
Spectrum debuted in Global Custodians 2006 Hedge Fund Administration Survey with top rated-level scores, and after a 2007 hiatus from the survey the administrator returned to tepid although high in technology scores in 2008. It has not been rated since.
With the acquisition, AlphaMetrix also introduces a multi-administrator hedge fund platform, which allows investors to choose from a preapproved list of administrators. Among the administrator options is AlphaMetrix360, formed by the acquisition of Spectrum and both firms proprietary technologies. AlphaMetrix says the integrated offering will lower platform costs to investors, providing a consolidated base cost for both platform and administration (including daily NAV calculation) of 20 basis points combined.
We constantly strive to give investors the tools they need to maximize returns and minimize risk, with entirely new services and lower costs for improved governance, says CEO Aleks Kins.
AlphaMetrix, which historically has serviced separately managed accounts and pooled managed accounts, will now support governed hedge funds as well.
In order to build what amounts to the first true cost-effective governance platform for hedge funds, AlphaMetrix realized that integration with Spectrum Global Fund Administration was an ideal fit, says David Young, COO of AlphaMetrix and former president of Spectrum. In short, AlphaMetrix has spent years developing proprietary technology for front and middle office operations, with a focus on near real-time investor reporting, risk management and portfolio tools, while Spectrum has spent the last 12 years building its own proprietary back office general ledger and reporting technology.
Combined, two administrators offer straight-through-processing capabilities from trade to portfolio management.