UMB Fund Services administrates approximately USD190bn of assets across its mutual funds and alternative funds business. Its alternative investment division has been supporting hedge funds, private equity funds, fund-of-funds since 1991.
It currently administers USD30bn of alternative assets and as Lonnie Macdonald, EVP of Alternative Investments at UMB Fund Services, comments: “We’ve had a great first quarter. We had a big win with a US private equity business with over USD3bn in AuM. Our pipeline looks great for 2014.”
With so much regulation for administrators to keep abreast of, the need to provide effective data management and data delivery to support alternative fund managers has become paramount. In that respect, UMB Fund Services is no different.
“Last year we brought in an outside consultant to help us examine our data management strategy. We are putting a lot of focus now on data management and delivery to clients the way they want it.. We’ve been looking at delivery through a couple of mechanisms,” explains Macdonald.
One is through its website portal, which Macdonald says has been significantly updated over the last 12 months. “That has been a big push and will continue to be so in 2014 and 2015,” says McDonald.
“Secondly, we’ve been looking at the quality of our processes and output to minimise the number of issues or exceptions. Clients pay for perfection. Our goal is to try and deliver data to our clients as perfectly as we possibly can.
“It’s a company-wide focus for UMB Fund Services and in particular our alternative investments division.”
UMB Fund Services brings an investor-centric approach to supporting its managers.
One area of growth for the firm is in the alternative mutual funds space, which is fast gaining traction in the US. UMB Fund Services is well placed given that it administrates both mutual and alternative funds and is one of few administrators who can offer managers a full turnkey solution for launching a ‘40 Act fund.
More specifically, it offers managers two routes into this space, as Macdonald explains: “Clients can choose our Investment Managers Series Trust to launch a mutual fund, whereby we help them get all their registration done, all their SEC filings, distribution agreements as well as do all the investor servicing and accounting. Or, they can choose our Registered Fund Solutions product to launch a registered private hedge fund. These are still registered ‘40 Act funds but are marketed only to private investors.
“We are seeing clients launching both types of ‘40 Act funds at the moment. Some have strategies that work well in a registered private fund but not so well in a mutual fund. It’s a part of the business that is really starting to grow.”
On winning the award, Macdonald comments: It is a great honour to be named “Best North American Hedge Fund Administrator” by Hedgeweek, especially on the heels of other awards we’ve recently received. Once again this award speaks to the high quality service that is delivered by our associates every single day. We hope to continue to live up to this accolade and provide the industry with the best service we possibly can for many years to come.”