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Service providers take on growth challenge

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The fund administration industry in the British Virgin Islands has recently experienced considerable growth.

The fund administration industry in the British Virgin Islands has recently experienced considerable growth. In the past two years it has witnessed an increase of fund service providers in the jurisdiction, and a higher level of sophisticated structures and products are being offered. As a mid-sized player in the industry, ATU Fund administrators (BVI) is now having to turn away lower-volume business in order to concentrate its resources most effectively, and is gearing up to take on larger mandates by hiring more chartered accountants. ATU has been carrying out fund administration in the BVI for at least a decade, having become the very first provider on the island to receive a licence from the Financial Services Commission for administration and management services. The firm benefits from being part of a larger network with its parent, the VP Bank Group with offices in Vaduz, Zurich, Luxembourg, Munich, Montevideo, Moscow, Hong Kong, Singapore and Dubai, which enables multijurisdictional client service. VP Bank has a significant presence in the BVI, offering trust services, incorporation, company administration, banking, custody, brokerage, lending and leverage as well as fund administration.

These various activities tie in well because they complement each other, and in the BVI, the group can meet a client’s full range of needs under one roof. Until recently fund services from the group and its subsidiaries have been offered and marketed separately, but that is now changing as ATU equips itself to take advantage of the opportunities of having fund administration resources and expertise at a multijurisdictional level to pave the way for expansion in the BVI fund sector. The firm has been developing a robust operating model that will enable it to accommodate larger clients, not just in terms of size of net assets but the complexity of investment strategies and flexibility of shareholder servicing functions. The aim is to create an organisation capable of administering structures such as pension funds, which have hundreds or even thousands of investors. ATU’s goal is to be able to handle more sophisticated structures and add more value to its clients. For the BVI fully to develop its potential as a fund services centre requires greater efforts to market fund products by local providers. At present the jurisdiction is home to more than 2,500 funds but barely 7 per cent of them are administered in the BVI, a significantly lower proportion than in Caymanor other alternative fund domiciles. The onus is on the industry as a whole to convince fund managers that there are competent resources available on the ground and there is no need to have their funds administered in a different jurisdiction.

The BVI does have the advantage as a small jurisdiction of close contact between the private and public sectors, and both the regulator and the government are very receptive to ideas and suggestions from practitioners. What’s needed now is a concerted effort specifically to promote the fund administration industry worldwide through international promotional events and trade shows. A little bit of effort could go a long way.

Christopher Bouck is head of mutual funds with ATU Fund Administrators (BVI)

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