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The Credit Suisse Hedge Fund Index (the Broad Index) finished up 0.83 per cent for the month of May with eight of the 10 sub-strategies all finishing the month in positive territory. Long/Short Equity led the way with a return of 2.15% for the month, followed by Equity Market Neutral (1.00%), Event Driven (0.85%), Global Macro (0.71%), Multi-Strategy (0.65%), Convertible Arbitrage (0.52%), Fixed Income Arbitrage (0.48%) and Emerging Markets (0.37%). Managed Futures was the month’s biggest loser, down 0.84 per cent, while Dedicated Short Bias ended the month in negative territory too, with a return of -0.83 per cent.
Diamond Hill Capital Management, Inc has closed the Diamond Hill Long-Short Fund to most new investors effective 12 June, 2015.  The Fund will remain open to additional investment from existing shareholders and certain other new accounts as described in the prospectus supplement dated 8 May, 2015.   At Diamond Hill, portfolio managers have the authority to close their strategies before they reach an asset size where they believe they can no longer add sufficient value over a passive alternative, protecting existing clients. "Our primary focus is always on achieving value-added results for existing clients," says Chris Bingaman, Long-Short Fund portfolio
Over the last 15 years the fund administration industry has been dominated by the big banking behemoths at one end of the scale and small niche players at the other.  Gradually, some of those smaller entities have been consumed.  Yet at the same time, those operating in the middle tier of fund administration – those in the USD10 – USD100 billion AuA range for example – have grown organically and taken away some of the size advantage of the bank-owned administrators; remaining flexible, innovative, and able to adapt responsively to managers' ever-changing needs. "In today's marketplace, you don't have to
Focusing on bank-owned administrators, nobody knows the precise reasons as to why investment banks have been vacating the hedge fund administration space other than the banks themselves. One possible explanation is that the integrated model they have been running for years perhaps no longer aligns well enough with both clients and the ever-changing market regulations.  At the start of the century, investment banks were ideally positioned to build out fund administration as part of a bundled service including prime brokerage, research, execution and clearing, custody services and so on. Since then the risks to running a fund administration business have
In a report published by eVestment last March (Alternative Fund Administrator Survey 2014), 95 per cent of respondents answered `yes' when asked if mergers and acquisitions were expected to play a role in the hedge fund administration over the next few years, citing the desire for economies of scale as the most likely driver of future deals. "We agree with the eVestment findings. This is absolutely a scale game. Think how much regulation is being thrown at the funds themselves, the governance structure around those funds, the reporting requirements, compliance overlay. This is an expensive business to be in, and
U.S. Bancorp Fund Services LLC (USBFS) is finalising two significant integrations: AIS Fund Administration, which it acquired in 2012; and Dublin-based Quintillion Ltd, acquired in 2013. The two transactions combined added approximately USD43 billion in AuA to their existing business along with several organic growth opportunities. “Our alternative investment fund AuA is approximately USD120 billion right now. Although not included in that AuA number, it’s worth noting that we are one of the leaders in administering liquid alternative mutual funds. There are approximately 500 liquid alternative funds and we are the full service provider to 150 of them,” comments Joe
By Chris Kundro, Senior Vice President, Head of Wells Fargo Global Fund Services – There should be little surprise regarding the on-going trend of bank-owned hedge fund administration businesses being sold or put up for sale. There should be even less of a surprise to find that banks have been the acquirers of most hedge fund administration businesses, both bank-owned and independent, that have been sold. Both sides of this trend will continue.  Sellers will continue to exit the business primarily for financial reasons. Some banks have already reached this point due to a declining client base, a need for
BNY Mellon is a prominent investment company in the financial industry. It has a market capitalisation of USD45 billion and is one of the world’s largest investment managers with USD1.7 trillion in AUM.  More specifically, BNY Mellon is best known for its expertise in investment services. This side of the business accounts for approximately 70 per cent of the Company’s revenues; whether that’s core custody capability, administration – both traditional and alternative – corporate trust work, issuing depositary receipts and so on. It currently has approximately USD743 billion of alternative AuA and/or custody.    Despite its size, BNY Mellon is
There are plenty of push and pull factors influencing hedge fund administrators but whilst there are those who are getting distracted by M&A activity, one administrator that is taking advantage of the situation to win new business is Opus Fund Services, which serves over 200 fund managers and 300-plus funds with a combined AUM exceeding USD10 billion. "We are in discussions with larger managers than perhaps we would have been a couple of years ago; largely due to the continued build-out of our institutional grade technology, service and brand," says Jorge Hendrickson (pictured), Director of Sales and Business Development.  Regulation
According to Mark Hedderman (pictured), CEO of Custom House Fund Services, the hedge fund administration industry needs a moment to reflect and think long and hard about what the preferred model to conduct hedge fund administration should be. It’s time to take a deep breath and look at how the evolution of the hedge fund administration business model has altered.  The genesis of the fund administration business was to function as a fully independent part of the investment management process, separate from prime brokerage and custody to perform a singular role. However, over the course of this century, that core function

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