Institutional Investor's Alpha Magazine - October 2007 - (Page 46)

Alpha Awards: Top Service Providers investors’ reporting timeliness and ability to produce their own reports on time. Demand for hedge fund–speciﬁc skills has become so high that accounting firms struggle to hire and retain enough talent to meet it. So as new hedge fund firms emerge and existing ones become more complex, accounting ﬁrms are ﬁnding it harder to handle their business and continue servicing their existing clients. In fact, Castro says, some of the Big Four accounting firms — Deloitte Touche Tohmatsu, Ernst & Young, KPMG and PricewaterhouseCoopers — have begun turning away hedge fund business or severing ties with some of their smaller hedge fund clients. Aware of this imbalance, BDO Seidman has been expanding its hedge fund business, though it has been careful not to grow too quickly. “We have avoided taking on business we don’t think we have the capacity to handle,” says Castro, noting that the volume of business the ﬁrm’s fund group handles still grew more than 20 percent last year. Its efforts have paid off. For a second year running, BDO Seidman ranks as the Alpha Awards™ top accounting firm overall. Hedge fund managers are particularly impressed by the level of the firm’s client service. They note how promptly its accountants return calls and the ﬁrm’s relatively low personnel turnover. Rothstein Kass & Co. is tight on the heels of BDO Seidman, ﬁnishing No. 2 for a second straight year. “Hedge funds and ﬁnancial services are our strongest market,” says Steven Kass, co–managing principal of the Roseland, New Jersey–based ﬁrm bearing his name. “We devote extensive resources to hedge funds, and it makes a difference.” Hedge fund managers rate Rothstein Kass higher than BDO Seidman in terms of audit and hedge fund expertise. “I have been very pleased with the service, responsiveness and knowledge of senior management at Rothstein Kass,” says one money manager of a midsize New York–based international long-short equity fund. Rothstein Kass is the top choice among hedge funds managing $1 billion or more. The middle-market specialist accounting firms, like TOP ACCOUNTING FIRMS Rank 2007 1 2 3 4 5 6 7 8 2006 1 2 3 5 9 8 7 6 Firm BDO SEIDMAN ROTHSTEIN KASS & CO. DELOITTE TOUCHE TOHMATSU GOLDSTEIN GOLUB KESSLER PRICEWATERHOUSECOOPERS ERNST & YOUNG KPMG GRANT THORNTON BDO SEIDMAN Robert Castro, 50, Managing Director, Financial Services ROBERT CASTRO TELLS IT STRAIGHT. As head of Chicago-based BDO Seidman’s financial services group, Castro makes sure to keep realistic expectations of the firm’s hedge fund clients — an approach fund managers appreciate. “I love the client interaction and dealing with 40 to 50 different entities each year,” says Castro, whom fund managers describe as incredibly accessible. Castro is so involved with his clients that one manager says he can send the accountant an e-mail at 9:00 p.m. and a response will be waiting for him the next morning. Such devotion is paying dividends for BDO. In the past year the firm’s hedge fund clientele — which ranges from start-up funds to industry giants such as East Setauket, New York–based Renaissance Technologies Corp. — has grown more than 20 percent. The firm currently has 85 employees devoted to hedge funds. Photo by Evan Kafka for Alpha

Table of Contents Feed for the Digital Edition of Institutional Investor's Alpha Magazine - October 2007

Institutional Investor's Alpha Magazine - October 2007 Contents Letter from the Editor Longs & Shorts Pension Corner: Applied Knowledge The Good Guys: Autism Advocate Interview: Nerves of Steel Cover Story: Ivy League Education Alpha Awards: Top Service Providers: Trying Times Strategies: Passage to India Profile: The Oracle of Irvine Alpha Bytes: Futurama Research Center: Funds of Funds 50 Unhedged: Commentary: Crisis? What Crisis?

Institutional Investor's Alpha Magazine - October 2007

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