Investors driving fund admin consolidation
03 February 2012 London
Image: Shutterstock
Consolidation is driving managers to change their fund administrators after launching funds in international domiciles, according to a recent survey of from FundDomiciles.com.
In addition, international investors are expected to have greater influence on managers' domiciliation and fund servicing decisions, while offshore centres will prosper and gain market share, noted the three-year forecast.
23 per cent of interviewees work for managers that have changed their fund administrator. Consolidation was given as the chief reason for this, cost was the second most common reason with poor service being third. However, only 8 per cent of the managers interviewed expressed some dissatisfaction with their administrators but did not say that this necessarily meant they were about to switch.
On a scale of 1 to 10, fund administrators scored 6.79 for the services they provide. Guernsey was the jurisdiction that scored highest for fund servicing provision, scoring 3.8 out of 5, Malta and Bermuda shared the next spot at 3.5.
One area that saw a significant increase was investor due diligence on a managers' service provider since the Madoff scandal and market crisis. 70 per cent of respondents said that the level of investor interest in service providers has increased since 2008 though the remaining 30 per cent said that interest was substantial before the market events and scandals.
In practice, investors are asking for more operational details though verification varied from rigorous onsite checks through to just being comfortable with the service provider's name. Additionally, managers reported that investors wanted more consolidation allied to a general rise in standards and that this will likely be the story for the next three years. 75 per cent of interviewees expect fund administrators to consolidate.
In addition, international investors are expected to have greater influence on managers' domiciliation and fund servicing decisions, while offshore centres will prosper and gain market share, noted the three-year forecast.
23 per cent of interviewees work for managers that have changed their fund administrator. Consolidation was given as the chief reason for this, cost was the second most common reason with poor service being third. However, only 8 per cent of the managers interviewed expressed some dissatisfaction with their administrators but did not say that this necessarily meant they were about to switch.
On a scale of 1 to 10, fund administrators scored 6.79 for the services they provide. Guernsey was the jurisdiction that scored highest for fund servicing provision, scoring 3.8 out of 5, Malta and Bermuda shared the next spot at 3.5.
One area that saw a significant increase was investor due diligence on a managers' service provider since the Madoff scandal and market crisis. 70 per cent of respondents said that the level of investor interest in service providers has increased since 2008 though the remaining 30 per cent said that interest was substantial before the market events and scandals.
In practice, investors are asking for more operational details though verification varied from rigorous onsite checks through to just being comfortable with the service provider's name. Additionally, managers reported that investors wanted more consolidation allied to a general rise in standards and that this will likely be the story for the next three years. 75 per cent of interviewees expect fund administrators to consolidate.
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