New York-based private equity firm Aquiline Capital Partners has made an investment in HedgeServ, a hedge fund administration company founded by James Kelly and Gene Mannella. Aquiline will provide growth capital to fund HedgeServ's development and expansion.
HedgeServ, with offices in New York and Dublin, was launched by Jim Kelly, a former chief executive of International Fund Services, which was acquired by State Street in 2002.
Now private equity sees value in the alternative fund administration sector. 'Recent industry events have made real-time access to data on positions, pricing and risk critical issues for industry participants,' says Aquiline chief executive Jeff Greenberg, who previously headed giant insurance brokerage Marsh & McLennan and is the son of former AIG head Maurice 'Hank' Greenberg. 'It is an opportune time to back an industry participant with HedgeServ's unique capabilities and service model.'
There seems to be increasing interest from private equity firms looking for fee-earning financial services companies. Many investors have recently threatened to withdraw assets from US hedge fund managers that don't use third-party administrators - which is good news for the sector at a time when the assets on which their income is based have been slashed by negative hedge fund investment performance and investor redemptions.