Independently owned Meridian Fund Services administers funds across all hedge fund structures and private equity funds. At present, Meridian administrates approximately USD14billion in assets. It services 85 clients across 216 funds, which collectively have more than 5,650 separate investors.
According to CEO Tom Davis, with both the US and Europe introducing significant regulation, the offshore market finds itself “playing the role of facilitator. We’re studying what role an offshore jurisdiction can play in this new regulatory environment so that investible assets in one jurisdiction can tap into the investment expertise in another.”
“Prior to 2008, we would first try to get the offshore business of a fund group and by doing a good job, then get their onshore business. Now we’re doing the complete opposite: we’re looking to get the onshore business through our New York office, and then assist our client with their offshore offering. We then help them establish their own fund offshore, or going forward they can choose to join our new platform to give them time to grow and build a track record,” says Davis.
The platform that Davis refers to is a new construct, designed specifically to help support small emerging managers. Even though the industry is becoming more institutionalised, Meridian, as a mid-sized administrator, has an important role to play getting talent to market.
Explains Davis: “ We feel we’ve come up with a great product that is going to help lower the barriers of entry for start-ups. It should go live in the next couple of months. I don’t like the word incubator but essentially it’ll be a platform for new managers to build a track record and then launch a full-blown fund structure further down the line.”
As well as supporting new managers, Meridian has long been a champion of good governance. In that sense, it has been one step ahead of its competitors, given the high priority governance now has today.
“What’s different now is that institutional investors are focused on return “of” capital as well as return “on” capital. So fund governance is becoming increasingly important. We have beefed up our existing governance group, and I’m pleased to report that the management groups that we’re dealing with recognise the importance of good governance.”
This is happening both onshore as well as offshore. The governance of US onshore funds is performed by a managing member if it’s an LLC, or a general partner if it’s an LP structure; either way it’s an entity controlled by the hedge fund manager.
“What we’re recommending to our clients is that they should appoint an advisory board for their onshore funds that has similar responsibilities to a board of directors of offshore funds. To achieve this, we have developed a prototype of powers and indemnities that can be formally transferred and/or bestowed by the general partner or managing member to the advisory board. We’ve been working with clients to help achieve this independent oversight role that institutional investors are increasingly looking for, and regulators may start to demand,” adds Davis.
On winning the Hedgeweek award, Davis comments: “I am delighted that Meridian received this award. I’m fortunate to have a dedicated global team who share my vision on the importance of client interface and attention to hands-on detail where technology is an enhancement and not a replacement for personal service to our clients.”