Cracking the operational blueprint
Over the last 24 months, fund administrator Drake Fund Advisors, an emerging market specialist with approximately USD900million in AuA, has established a number of licenses across the globe and fanned out from its BVI headquarters. The modus operandi behind this has been to scale up its business by focusing uniquely on the investor and develop a ‘follow a sun’ model that has, according to Executive Director Nicolaas Faure (pictured), helped Drake crack the operational blueprint.
“We’ve now got a number of offices in Asia, Europe and one in Cape Town, South Africa, as well as the BVI. If you keep your clients happy, you can’t go wrong and that’s the approach we’ve taken,” says Faure.
By cracking the operational blueprint, what Faure is referring to is the ability for Drake to get pricing information to clients faster than anyone else. Global financial markets effectively set their day around the US timeline; that’s where the day ends. Now, the closer to the Pacific dateline one is, the quicker the last close prices can be reported. Drake does this by having an operation in the Philippines on the island of Negros, Bacolod City.
“The day starts in Asia where 99 per cent of our funds are priced on the last close. We are perfectly positioned to grab that price data before anybody else. As you can imagine, by the time a BVI fund has been priced, 20 hours or more might have passed, and we beat the opposition by some 12 hours!” says Faure.
The second part of Drake’s system infrastructure is based in South Africa where the feeds from Asia are automatically disseminated. It is from here that each fund’s NAV is reviewed.
“We have a team of senior executives based in Cape Town where the numbers are officially signed off and then presented. We beat everybody else to market when it comes to prices in Europe and the US being reported,” states Faure., adding that in Europe the focus is more on strategic direction and client interaction.
The third part of the system infrastructure is compliance.
“This is less of a time sensitive operation and explains why we take care of this in the BVI. If you add the pricing element to the compliance element and investor services, the three combined are in essence what makes up fund administration. We make the fund data accessible and easy to use for investment managers to base their investment decisions on. That’s what we’ve really been focusing on for the last couple of years,” says Faure.
As well as the obvious timing benefits of South Africa and Asia, Drake is also able to take advantage of FX benefits, which are directly passed on to its clients.
“For example, a chartered accountant can be appointed in Cape Town at approximately 40 per cent of the price of appointing one in Luxembourg or Dublin. We are able to bring highly skilled and competent staff to the market at a fraction of the cost,” comments Faure.
In addition, the cost-effective model that Drake has built has positioned it well to support managers who increasingly want intraday pricing information and the ability to respond quickly to investor demands for weekly reporting, sometimes even daily reporting for those who have managed accounts.
“We’ve taken to offering a level of administration that is equivalent – if not greater – to what an onshore manager would expect. We want to offer the same level of service that a manager would enjoy running a regulated fund in an onshore jurisdiction as compared to running an offshore fund in the Caribbean,” concludes Faure.
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