Institutional Investor's Alpha Magazine - October 2007 - (Page 49)

banks that have begun adding administrative services for their hedge fund clients. Although state-of-the-art technology platforms are critical to administrators’ businesses, Cory Thackeray, the Princeton-based global head of Goldman’s fund administration services group, says that the depth of a ﬁrm’s experience and how well it trains its staff are also important to clients. “It’s not just how you interface with clients but how you interact with their investors,” says Thackeray. Fund managers say Goldman continues to have the best formula. The ﬁrm repeats as the top overall administrator for a second year in a row, receiving especially strong marks from hedge fund managers for Investor Services and Fund Accounting. Unlike many of its competitors, Goldman has integrated its administration services with its prime brokerage offerings, meaning in almost all cases only its prime broker clients can use its administration platform. But even though Goldman remains in the lead on the technology and reporting front, some hedge fund managers still believe that this area, as well as its middle-ofﬁce services, could be improved. New York–based Citco Fund Services (the biggest independent administrator, with more than $500 billion in assets under administration) moves into the No. 2 spot this year, up from its seventh-place finish last year. Like many of its competitors, Citco has been expanding its TOP ADMINISTRATORS Rank 2007 1 2 3 4 5 6 7 2006 1 7 — — 8* — 9 Firm GOLDMAN, SACHS & CO. CITCO FUND SERVICES HSBC ALTERNATIVE FUND SERVICES UBS CITI GLOBEOP FINANCIAL SERVICES SEI GLOBAL FUND SERVICES * Rank in 2006 was for Bisys Alternative Investment Services, which Citi acquired in August 2007. GOLDMAN, SACHS & CO. Cory Thackeray, 38, Global Head of Fund Administration Services CORY THACKERAY PREFERS A QUIET LIFE. “No news is good news in fund administration,” says the Canadianborn head of Goldman, Sachs & Co.’s fund administration business. Of course, Thackeray has yet to have an idle year. Now in its 16th year of business, Goldman’s fund administration business serves approximately 500 hedge funds with a combined $190 billion in assets under administration, as of the beginning of July. The group has service teams in Princeton, New Jersey, where Thackeray is based; Jersey City, New Jersey; Dublin; and the Cayman Islands, and in June it further broadened its international presence with the addition of an office in Hong Kong. “We feel good about where we sit,” says Thackeray. Photo by Evan Kafka for Alpha reach. In the past year the ﬁrm opened ofﬁces in Halifax, Nova Scotia, and received authority to begin operations in Guernsey. Several ﬁrms have also begun running portions of their operations out of India, particularly on the accounting and valuation side. Not only does India offer the advantage of cheaper, highly educated employees, but differing time zones allow ﬁrms to signiﬁcantly expand the amount of work accomplished each day. Competitors say Morgan Stanley has been extremely aggressive in its hiring of Indian staff for Morgan Stanley Fund Services, the administration business it launched in 2005. Despite efforts to grow its fund services division, however, Morgan Stanley’s administrator falls in this year’s rankings — dropping off the overall standing entirely, from its No. 3 spot in 2006. The ﬁrm, which has close to $80 billion in assets under administration, representing 320 funds, finishes second among hedge fund managers with $1 billion or more in assets under management. Investment banks across the board are pushing into administration — an area they view as complementary to their prime brokerage operations. In August, Citi paid $1.45 billion to buy Bisys Hedge Fund Services, which it rebranded Citi. The business ranks No. 5, up from its eighth-place showing last year as Bisys Alternative Investment Services. Credit Suisse, which fails to qualify for a ranking this year, has also moved into hedge fund administration. In June the bank paired with outside vendors — including India-based administrator Viteos Capital Markets, in which it owns a minority stake, and New York–based technology company Paladyne Systems — to launch Advanced Prime, a multi-prime-brokerage platform that includes middle-ofﬁce and administration services. Earlier this year, Citadel launched Citadel Solutions, transforming its in-house middle-office and administrative services into a client-facing business. “There is a gap among some of the service providers, in terms of what they are pitching to clients and what they are able to deliver,” says John Buckley, president of Citadel Solutions. Hedge funds that handle their own administration have packaged those services for outside fund managers in the past. Cayman Islands–based Admiral Administration (No. 3 among hedge funds with less than $1 billion in assets under management) was founded by Kevin Brandt, president of St. Croix, Virgin Islands–based hedge fund ﬁrm James River Capital Corp. Of course, a background in hedge funds alone does not guarantee a firm a top ranking. London-based GlobeOp Financial Services was co-founded by CEO Hans Hufschmid, a onetime principal of now-defunct Greenwich, Connecticut, hedge fund firm Long-Term Capital Management — one of the most complex hedge funds in existence before its 1998 blowup. But GlobeOp, which listed on the London Stock Exchange in late July, finishes sixth in this year’s Alpha Awards™, beating out only SEI Global Fund Services. OCTOBER 2007 • INSTITUTIONAL INVESTOR’S ALPHA • 49

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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