Hedge fund administration: 4 trends that may drive new growth

August 2014
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Hedge fund administration: 4 trends that may drive new growth

At a glance

With growth opportunities for hedge fund administrative services decreasing, where will new demand come from? The answer lies in competitive forces now shaping the asset management industry. Learn which four key industry trends could drive new growth in hedge fund administration, and how these emerging changes could affect your business.

There’s little doubt that hedge fund administration (HFA), or back-office outsourcing, is a maturing industry, as over 80% of hedge fund AUM is already administered by a third party. But as both organic and inorganic HFA growth opportunities decrease, will there be new demand for administration services? And if so, where will this demand come from?

The answer lies in the competitive forces now shaping the asset management industry. We’ve found that four trends appear poised to drive new growth in hedge fund administration:

  • Increased need for regulatory reporting
  • Manager and product convergence
  • Cost-efficient fee operations
  • Expanded outsourcing

In general, we believe the HFA firms that define a growth strategy which complements their core competencies, activities, and assets will create more value over the long term. Learn more about this changing marketplace in Hedge Fund Administration: The Quest for Growth.