The Citco group of companies (Citco) has navigated the minefields of the last 18 months with confidence. Jay Peller, Head of Fund Services, Citco Fund Services (USA) Inc, comments: “We have always maintained a commitment to best-in-class solutions which prepared us to make quick transitions without sacrificing the superior service we provide.”
The Citco group of companies (Citco) has navigated the minefields of the last 18 months with confidence. Jay Peller, Head of Fund Services, Citco Fund Services (USA) Inc, comments: “We have always maintained a commitment to best-in-class solutions which prepared us to make quick transitions without sacrificing the superior service we provide.”
According to Peller, Citco went from zero per cent to 100 per cent business continuity planning (BCP) within 12 business days. “Whilst making the transition, we were able to achieve 100 per cent of client deliverables in the face of increased inbound calls and support tickets, with a 93 per cent satisfaction rate, further proving ourselves a trustworthy and dependable service provider in these challenging circumstances,” Peller adds.
In terms of key trends over the last 18 months, Peller believes that the data collected by Citco on hedge fund performance shows that these funds have proven their worth during the pandemic and, as a result, interest from institutional allocators has increased. However, this interest in hedge funds and other alternatives has come hand-in-hand with additional scrutiny during the due diligence process, which has also necessarily had to happen virtually to a large degree.
Peller says: “The depth and breadth of due diligence questionnaires (DDQs) has increased, and greater importance has been placed on ethical and social governance (ESG), especially operational ESG, which also encompasses diversity, equity and inclusion.”
Outsourcing
Peller adds that, as well as the above, the working from home environment has meant that managers are increasingly outsourcing more tasks to asset servicers for improved operational efficiency and resilience.
Peller comments: “Alongside our traditional fund administration service, managers outsource an increasing number of additional functions to Citco such as risk reporting, middle-office solutions including treasury, collateral management and reconciliations, ESG reporting, and tax and regulatory reporting.
“Managers are also looking for services we provide that help them raise money in a more secure and efficient fashion, as part of the virtual due diligence environment we are in. Through our breadth of solutions, we aim to be a client’s operational backbone and foundation for growth,” Peller adds.
Peller terms this part of the ‘Citco Way’, with the business continually evaluating clients’ changing needs and then developing solutions to address them. Most recently, the firm launched Citco ESG Reporting, a robust ESG reporting and analytics solution, and Citco Data Services, a web-based data integration and reporting platform designed to empower hedge fund clients by improving transparency and efficiencies through actionable data.
Over the next 12-18 months, Peller feels that hedge funds are likely to continue their resurgence, creating a favourable environment for asset raising. In addition, he says, many asset managers that may have formerly concentrated on hedge funds have expanded in private markets, fueling the continued growth of hybrid funds and co-investments.
Peller comments: “Helping managers to meet tomorrow’s challenges will continue to extend to ESG, where factors such as ecological impacts, employee engagement, and business ethics have become increasingly vital, non-financial, indicators of the health of businesses and investments globally. Given the level of institutional participation in alternatives, and the regulatory scrutiny that many are under, we see ESG reporting and transparency as being a critical area that asset servicers can help managers with,” he concludes.
Jay Peller, Head of Fund Services, Citco Fund Services
Jay Peller is a Managing Director, responsible for the Fund Services Division of Citco. Prior to joining Citco in January 2000, Peller was employed by Tudor Investment Corporation where he served in various senior positions, including Vice President of the Fund Accounting Group from 1998 to 1999 and Manager of the group from 1993 to 1997. From 1990 to 1993, Peller worked in the Ernst & Young Financial Services Group. Peller is a CPA and received a degree in Business Administration and Accounting from State University of New York at Albany.
