The decision by Custom House Administration to establish a presence in Singapore is far from a spur-of-the moment action but part of an expansion plan we have been refining for several years.
The decision by Custom House Administration to establish a presence in Singapore is far from a spur-of-the moment action but part of an expansion plan we have been refining for several years. Our game plan always envisaged first opening an office in Chicago because we saw the potential in the North American market, particularly as a large number of US funds are still self-administered, and we believed that investor pressure would prompt funds to conclude that they should seek an independent administration provider. When we opened in Chicago rather than New York, a lot of people wondered why. One of the reasons was that it was an hour nearer Singapore, which we had identified two or three years earlier as an area with great potential. Since then much of that potential has been fulfilled as Singapore has begun growing rapidly as a centre for hedge funds, reflecting the growth of the industry throughout East and South-East Asia as a whole.
For the financial services industry, the region includes Australia, and Sydney is one of three possible choices for a firm looking to establish a presence there, along with Singapore and Hong Kong. Sydney has many attractions and is in the right time zone, but it is geographically isolated from the rest of the region and is a long way from other countries in South-East Asia, let alone for travelling to Dublin and the US. Nor is Sydney particularly cheap, a factor that also comes into play with Hong Kong, where costs such as office space are extremely high. And what Singapore also offers is not just a well-educated workforce but a procedural and disciplined mentality, well suited to an administrative business where common sense and dedication are more important attributes than more entrepreneurial qualities. Finally, it offers a backdrop of calm and stability in a region that has known its share of political and economic turbulence.
But the main reason we have moved into Singapore is that we think there’s a big market to capture. In particular, there is strong potential to win business from funds that bigger administrators consider too small to be worth taking. That could be a fund with assets of USD100m, which not so long ago was considered a big fund; Custom House is certainly capable of making a living from funds of that size.
The establishment of the Singapore office also effectively gives Custom House the same 24-hour capability offered by the largest global hedge fund administration groups. This means functions can be shared between jurisdictions to complete work in a timely and efficient manner. For example, we administer a number of daily dealing funds managed in North America. In most cases we can carry out the trade reconciliation during Singapore’s working day, get the NAVs calculated in Dublin, and pass the completed work back to North America before they’re awake.
Our offices are not structured as a silo system or independent, stand-alone operations but as a totally integrated system. All our activity operates off the same servers in Dublin, allowing anyone with the authority in Chicago, Singapore or Dublin to monitor the work being carried out in the other offices. Even the telephone system passes calls on when each office closes in order to provide a 24-hour response. Singapore has given Custom House a global footprint that allows us to service customers around the clock and around the world.
