Hedge fund boom helps Citco Bank reach USD250bn in custody assets
Citco Bank, the global leader in custody and fund trading for mutual and hedge funds, has topped the USD250bn mark for assets under custody, a business that was founded in 1994 and now employs 800 people worldwide.
Citco offers execution, settlement and custody of funds to banks, financial institutions, funds and funds of funds. Over the last 13 years, the bank has been a prime beneficiary of increasing institutional interest in hedge funds as well as growing acceptance in the marketplace of the benefits of outsourcing.
Says Citco Bank managing director Willem Holst: 'Back in 1994, we identified an opportunity in the mutual and hedge fund market for custody and fund trading services. Financial institutions and funds alike faced increasing administrative burden as they grew their trading activities.
'In response, Citco Bank developed a range of services to alleviate clients' administrative burdens, providing them with an integrated service platform across banking and custody, tailored to their needs.
'Our rapid growth is the result of an increase in activities by our existing client base and moves by institutional investors to up their allocations to hedge funds, which are increasingly viewed as mainstream investments. Another key factor is that more and more financial institutions have come to recognise that outsourcing key functions helps them to focus on and grow their core business.'
Citco Bank has strategic centres in the Netherlands, Switzerland, Ireland, Luxembourg, Italy, Curaçao, the Bahamas and the Cayman Islands as well as back office processing centres in Ireland and Canada. It provides custody services to more than 25,000 funds.
The bank's custody services cover the entire trading, clearing, settlement and custody life-cycle, including locating funds, placing subscriptions and redemptions, completing paperwork and registering funds, addressing corporate actions, providing monthly statements of holdings and net asset values and sending out all documents.
Directly or through its long-term relationships with third-party banks and prime brokers, Citco Bank can provide clients with bridge, margin or leverage credit. Through its online trading and custody platform CitcoFundsNet, it offers institutions and fund of funds access to online trading, tailored reporting and a research database covering more than 6,000 mutual and hedge funds with the ability to rank funds by strategy using measures such as Sharpe ratio, standard deviation, rate of return, maximum drawdown and correlation coefficients, as well as a bulletin board of available trading opportunities.
The Citco Group of companies has a total of 66 offices and more than 4,000 people in 34 countries, offering banking and custody services, corporate and fund administration and fiduciary advisory services. The group's hedge fund administration business recently reached USD500bn in assets.
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