Last year marked a strong year for BNY Mellon’s HedgeMark business. The firm ended the year with 105 dedicated managed accounts (DMAs). Crossing the 100 DMA milestone has set the pace for the firm’s trajectory for growth. In 2018, HedgeMark also won a number of institutional mandates from large global clients and saw its platform assets increase by more than USD4 billion.
A wholly-owned subsidiary of BNY Mellon since 2014, this is the fifth consecutive year in which HedgeMark, has won the award for best managed accounts platform. The firm specialises in supporting institutional clients in the development and operation of their own private hedge fund DMA platforms. While some platform providers focus their businesses on managing proprietary products, HedgeMark’s business is exclusively dedicated to implementing and operating platforms for institutional investors.
President and Chief Operating Officer Joshua Kestler (pictured) explains the firm continued to significantly enhance its proprietary technology which supports customised DMA platforms. “These enhancements included further developments to our proprietary applications to support the fund onboarding process, along with daily accounting, operations and risk and performance reporting for DMAs,” he says, “Through these applications, we were able to increase our internal efficiency and controls while delivering an even better client experience through our portal.”
Kestler continues to see significant demand for managed accounts in both the asset owner and asset manager client segments. “We believe this demand will continue to drive material growth for our firm. The fund of funds industry has very aggressively adopted managed accounts as part of an evolution of its business model and this client segment has been a particular niche for HedgeMark,” he says. Further, as pension plans continue to come under political and public pressure on hedge fund allocations, Kestler believes this is another sector ripe for significant future growth.
The firm has also seen certain sub-trends emerge, like the use of managed accounts to deliver co-investment, emerging manager and ESG-compliant products to clients. Demand for solutions which can meet the compliance and reporting requirements of the Basel and Solvency regimes as well as for UCITS product have also been on the rise.
In 2018, HedgeMark aimed to change the way institutions invest in hedge funds. Kestler says: “Our overall objective is to be the industry leading provider of hedge fund DMA services for institutional clients. We believe that both the service we delivered to our clients in 2018, as well as the mandates we were awarded by some of the largest and most influential hedge fund allocators have helped to solidify our position as the industry leader in the managed account space.”
Going into the new year, HedgeMark aims to continue helping clients achieve their goals, develop new products, reduce costs and more effectively use the data available to them via managed account structures. It will also maintain its focus on the growth of its platform and client base as well as further enhancing its various technology applications and capabilities.
Kestler concludes: “HedgeMark is honoured to win Hedgeweek’s Best Managed Account Platform award for the fifth straight year. We view this award as validation of all of the work we have put in to become the industry’s leading hedge fund managed account platform. It is extremely rewarding to receive this award knowing that it is based on the votes of clients and other industry participants.”