Global Custodian Private Equity 2018 | Page 4

[ I N S I D E V I E W | J O N AT H A N W AT K I N S ] globalcustodian.com Private equity still the talk of the town F or the second consecutive year we are delighted to bring you the Global Custodian Private Equity Issue, this time with helicopters instead of pizza. The rescue theme comes from the huge upturn in private equity outsourcing at a time where hedge funds are squeezing their administrators more and more in response to challenges within their own world. Fortunately, whereas most hedge funds already outsource, private equity administra- tion is a much less-used service in comparison. Predictions seem to vary on the per- centage, but looking back at last year’s issue we were discussing somewhere between 25-30% of private equity funds outsourcing, this year sentiment seems to place the amount slightly higher at nearer 45%. To throw some more numbers at you, private equity assets under administration increased 18% to $2.5 trillion over 2017, more than hedge fund, fund of funds and real estate assets. That’s not the only thing to have changed throughout the year. Here at Global Cus- todian we’ve noticed a vast pickup in our people moves section where headlines often read ‘Fund administrator X employs private equity expert’. Evidently, service providers are bolstering their teams with seasoned professionals to improve their offering. In the big leagues of the administration world, the likes of Citco, SS&C and Apex have all seen the addition of new private equity businesses, significantly boosting their overall assets under administration. Meanwhile, Northern Trust are experimenting with all sorts of new tools and services in the area, including a blockchain experiment for auditing (page 12). The fund administration space has gone through an elongated period of consolida- tion, one that appears unlikely to end soon. In some ways, private equity has helped keep some heads above water, though for others, private equity has put them front and centre in the shop window, making them an even more attraction acquisition (see page 13). Still, it’s not just a fair-weather hunting season for all administrators. With such a focus on this space, there is now intense competition in the industry for these private equity funds. We take a look at the pros and cons to bank-owned versus non-bank owned administrators on page 14, while also addressing the new challenges in this space including regulations, corporate governance and talent retention on page 24. We plan to continue offering the Private Equity Issue as a standalone magazine, rather than integrating it into our Hedge Fund magazine, given its growing importance and the interesting findings from our surveys. So until next year, enjoy this issue, while at Global Custodian we continue to debate whether the helicopter on our front cover is more mountain rescue, or corporate helicopter taking these flourishing private equity fund managers to their next meeting. EDITORIAL Managing Editor JONATHAN WATKINS Tel: [phone] [email protected] Deputy Editor JOE PARSONS Tel: [phone] [email protected] Special Projects Editor RICHARD SCHWARTZ Tel: [phone] [email protected] Product Development Manager BEENISH HUSSAIN Tel: [phone] [email protected] Research & Operations KAREN DELAHOY Tel: [phone] [email protected] Contibutors CHARLES GUBERT DESIGN & PRODUCTION Art Director OLIVIA ROSZKOWSKA Tel: [phone] [email protected] ADVERTISING Advertising Director DALJIT SOKHI Tel: [phone] [email protected] ADRESS 20 Little Britain London, UK EC1A 7DH Tel: [phone] Printed by: Warners Midlands PLC SUBSCRIPTION RATES Global Custodian magazine publishes five issues per year. GlobalCustodian.com publishes daily. Annual subscription: $565 - magazine only; $715 - web only; $890 – package. For more information contact [email protected]. Global Custodian is owned and produced by Tungsten Publishing Ltd. ©Tungsten Publishing 2018 No part of this publication may be reproduced, in whole or in part, without written permission from the publisher. Jonathan Watkins Managing Editor Global Custodian 4 Global Custodian Private Equity Issue 2018