[ I N D E P T H | I N D E P E N D E N T A D M I N I S T R A T O R S ]
structures . That is the best of both worlds – you serve your clients with tech-enabled data and analytics while implementing the same solution set into your expanding core internal administration operations .”
Client-led development The driving force for the technological advancement in the sector is often the end-client , who now expects value-added services as a minimum . Providers are under more pressure than ever to include the likes of data analytics , regulatory reporting , new fund structures and expanded geographies as part of their basic offering . As Alter Domus chief , Hart , notes , this extension of the relationship between fund manager and service provider has provided the basis for further success in the sector . “ Managers are now viewing us as a partner , an extension of themselves to a much larger degree ; and I think that is the biggest opportunity and the biggest challenge that we have . Wanting to outsource more has always been on the mind of many managers , but Covid and the subsequent challenge around retention and hiring has accelerated that further .” Citco ’ s Quilligan picks up on this point around a more strategic partnership with the fund manager , rather than a simple client-provider relationship . “ Certainly , our mantra is to align ourselves more strategically with our clients , whose expectations are increasing all the time . They expect us to listen to them and become a trusted confidant and advisor to them .” As with many industries , the emergence of data as a key tool for understanding client needs and leading business strategies has become essential to fund managers – and luckily enough , fund administrators oversee huge swathes of relevant data . They just need to harness it and package it in a way that ’ s suitable for their clients . “ What is really distinguishing companies is the ability to harvest data
Assets under administration – end of Q1 2022 Apex $ 2.7 trillion * SS & C Citco
“ Every time you think the market is going to consolidate – it doesn ’ t . It gets bigger and it gets more fragmented .”
across multiple systems and then deliver that data through report generators or into other point applications like compliance , investor portals and performance measurements ,” explains Salus . “ It ’ s the data play that ’ s really pushing and distinguishing providers .” Increasing expectation upon service providers is transforming them beyond the traditional view of what a fund administrator is . When speaking to Apex ’ s Mulhern , he was keen to stress that Apex does not view itself simply as a fund administrator anymore , with fund admin representing “ just one of the plethora of services ” that the business now offers . Other leaders in the space will be quick to follow suit , as the competition for business hots up .
Fund admin of the future So , what does this all mean for those at the top of the fund administration game ? The rapidly-changing nature and
$ 2.2 trillion $ 1.9 trillion
Alter Domus $ 1.6 trillion
* Assets across administration , depositary , custody and under management .
BILL STONE , FOUNDER AND CEO , SS & C
unpredictability of the market means that the ground on which they run is unsteady . New technologies are underpinning new services , and new customers want new understanding of their funds – all against a backdrop of unyielding M & A activity . Providers need to be consistently cognizant of the landscape around them to maintain and grow their positions . There will certainly be some more mergers and acquisitions this year and beyond , while outsourcing will also continue to play an increasingly important role in the market . With that , smaller , boutique administrators will continue to set up shop . “ Just when you think the consolidation in the market is going to diminish , two or three more open ,” observes Salus . “ People are leaving big organisations to start a business targeting the middle market , that grows for a year or so , they get a private equity injection , that grows , they buy a few things , then they are ready to sell .” SS & C ’ s Stone believes the reason for this to be that managers – particularly private equity managers – appreciate the strong expertise and customer service often provided at the smaller vendors . “ Consequently , every time you think the market is going to consolidate – it doesn ’ t . It gets bigger and it gets more fragmented .”
44 Global Custodian Fund Services Annual 2022