Section 2 - FTSE

FUND ADMINISTRATION: GOING WITH THE FLOW
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Richard Harland, business development manager for Mourant
International Finance Administration.“Mourant continues to invest in
market leading software solutions across our global office network and
our systems enable bespoke solutions to client needs and serve as
powerful reporting tools,” he says. Photograph kindly supplied by
Mourant International Finance, December 2008.
reporting is key to this effort. “To the extent that the
systems, products and processes can be leveraged across
all of our business lines, we certainly welcome these
synergies where they make sense,”he adds.
Nor does Smith rule out the opportunity to make
strategic acquisitions where applicable. “The ability to
innovate and stay ahead of the next wave of alternative
investment managers drives the desire to acquire another
service provider. If you have time and money to reinvest in
these businesses you will win your fair share of mandates.
If you lack technology or expertise and you want to be a
leading servicer of alternative funds, it becomes a necessity
to buy functionality and technology.”
A hallmark of any bona fide administrator is the ability to
adapt to radically changing market conditions, and having
the proper tools on board makes the job that much easier,
thinks Lewin.“Our approach has been to build out native
technology systems that can allow us to work through the
many kinds of investment structures, from fund-of-funds
to private equity to hedge funds, with all the various
hybrids in between,”she says. Commitments to technology
are more vital now than ever before, concurs Seán Páircéir,
managing director, Brown Brothers Harriman (BBH), in
Dublin. “BBH will continue to invest to support the
sophisticated business needs of our clients as part of our
core strategy. We are committed to enhancing our
competencies with innovative technology solutions like
virtual pooling which meet and anticipate our clients’
development,”says Páircéir.
Rather than actively seeking bolt-on providers, however,
BBH, in keeping with its established business model,
prefers a more organic approach technological growth.“We
can tailor our ability to service sophisticated asset
managers by bringing ever more specialised pricing
Andrew Smith, head of North America funds and securities services.
Robust investments in technology that allow alternative managers to
access data in real-time and meet clients’ need for transparency and
performance evaluation reporting is key to this effort.“To the extent that
the systems, products and processes can be leveraged across all of our
business lines, we certainly welcome these synergies where they make
sense,” he says. Photograph kindly supplied by Citi, December 2008.
capabilities from the market,”says Páircéir,“participating in
automation initiatives in the OTC marketplace, and
attracting product expertise in specialist areas like real
estate fund servicing.”
Pension pinching
Poor returns and bad press have put a dent in the once
impenetrable veneer of the hedge-fund industry since the
crisis began. While some continue to forecast tough times for
alternative strategies as mainstream investors rush to the
sidelines, observers like Lewin remain optimistic.“We firmly
believe that absolute and alternative strategies will continue to
be an integral part of the investment portfolio in the long run.”
One group that is likely to stay put are large public
pension funds, which have come to depend on the extra
octane provided by alternative classes in order to help cover
potential liability gaps.“Pension plans [such as] MassPRIM
or CalPERS are looking at liabilities that run 40 years out in
actuaries, if not longer,”says Smith.“Clearly, finding alpha is
their main objective.” Which in turn points to more asset
classes, more complexity, and more customised reporting.
“While the traditional asset manager might be focused on a
‘back-to-basics’strategy, the alternative manager, by nature,
is driven to find value even in the worst of markets.”
Accordingly, Smith says that Citi has not made any changes
to its core strategy based on current market conditions.“We
continue to reinvest in these businesses and develop new
products and services, and we are working with a wide
variety of independent pricing sources to help with security
valuations, particularly as hedge funds seek returns from
esoteric asset classes and securities.”
Despite the current and seemingly perpetual havoc on Wall
Street, Richard Harland, business development manager for
Mourant International Finance Administration, says that
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