Citi grows hedge fund outsourcing business

Date: Tuesday, July 8, 2008
Author: Kris Devasabai, ICFA Magazine.com

A raft of recent mandate wins has brought the total number of hedge and 130/30 fund managers using Citi's OpenPrime front-to-back office operating platform for alternative managers up to 20, the bank said today.

The recent mandate wins include deals with Hong Kong based hedge funds CMTF Asset Management Limited and Galaxy Asset Management and the Montana Board of Investments, which is using OpenPrime to manage its 130/30 funds.

Nicholas Roe, Citi's global head of prime finance, said: "These three recent mandates are additional evidence that OpenPrime is quickly becoming the solution for hedge funds and institutional funds launching leveraged or multi-asset products."

OpenPrime is a prime broker agnostic portfolio management and order management system hosted by Citi. It is based on Linedata's Beauchamp technology. Fund managers can use the system to manage their positions across multiple prime brokers and strategies. While the platform is agnostic, it is integrated with Citi's prime finance and hedge fund administration businesses, with clients able to link to Citi's services via the paltform. CMTF, for instance, uses Citi's prime brokerage services.

Peter Salvage, Citi's global head of OpenPrime and hedge fund middle office services, said the bank was benefiting from a trend towards outsourcing in the hedge fund management business.

He said: "Operations are becoming more complex and investors want to see industrial strength operations from their fund managers. Managers want to focus on making investment decisions, while outsourcing their technology and operations. Global fund managers are increasingly using OpenPrime to reduce operational complexity, risk and costs."