Thu, 27/09/2007 - 14:16
In a market such as Dublin, where more than 60 administration firms are serving the hedge fund industry, firms need to articulate clearly to potential clients their business philosophy and what sets them apart from their rivals.
In the case of SEI, the firm's success in a highly competitive market stems from a unique corporate culture, experience around sophisticated product structures, and a robust infrastructure that managers courting institutional investors require. SEI's Dublin operation was established 12 years ago to create a premier funds servicing centre in Europe. During that time, the business has grown significantly due to the explosive growth of hedge funds and fund of hedge funds. Today, with nearly USD100bn in alternative assets under administration, SEI services some of the largest global institutional managers.
SEI has set itself apart from the crowd in having set up a dedicated training unit within the office. In a market where skills are at a premium and many providers complain of high staff turnover, the firm has a longstanding commitment to the professional development of its employees.
The training programme has helped retain employees and further strengthen SEI's expertise with sophisticated product structures. This philosophy is also reflected in using technology wherever possible and avoiding using highly qualified personnel to carry out manual data input.
The firm's culture is reflected in a completely open-plan environment (no private offices or cubicles, not even for the chief executive), and technical facilities that allow staff to work together easily and efficiently. The open environment fosters communication and flexibility, which are the critical to ensuring that clients and their investors receive superior service.
As the industry becomes more sophisticated in terms of strategies and the financial instruments they employ, managers are becoming increasingly concerned that the administrators they use should have the right level of experience and are capable of dealing with complex securities.
Not only is it critical for staff to have expertise in dealing with sophisticated securities, but having robust systems and technology in place also minimises the need to rely on manual or antiquated spreadsheet work.
The importance of quality, process controls and risk mitigation is underlined by SEI's longstanding adherence to the SAS 70 quality standard, monitored by testing of its internal controls and procedures by an independent audit firm, and the subsequent issuance of a Type 2 report.
Institutional investors such as pension funds that are increasingly concerned about standards within the administration sector are looking for the reassurance delivered by the SAS 70 report that the funds with which they invest are being serviced by a quality provider. At present, certification of their administrator is a marketing advantage for hedge funds, but in the future it will become essential to winning business.
David Morrissey is the head of business development for SEI's Investment Manager Services division in Dublin
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