Deutsche expands hedge fund admin services

Date: Friday, November 7, 2008
Author: Nina Mehra, Asian Investor.net

The bank opens hedge fund administration offices in Singapore and Dublin in a bid to win more market share in these challenging times

Deutsche Bank has launched new fund administration offices in Singapore and Dublin to service hedge fund clients in a bid to win more market share in the region.

With this expansion, Deutsche Bank’s DB HedgeWorks unit will offer administration services to hedge fund managers and funds of funds managers in Europe and Asia as it does in the US. It will also provide global hedge fund and funds of funds managers with a single-source, worldwide administration solution.

The move comes as hedge funds feel the pain of falling markets and client redemptions. There are expectations that hedge fund managers in Hong Kong and Singapore, the two biggest regional operational hubs, will close.

“There is a fair amount of dislocation going on in the prime brokerage business. There are instances where clients are using particular companies either for prime brokerage or administration and in some cases there are questions over where those companies will be over the next six to 12 months,” says Christopher Nero, global head of DB HedgeWorks.

“Over the next six to 12 months we expect that funds and funds of funds will revisit their structures, in terms of how their funds are set up, taking into account liquidity and credit facilities and transparency. We believe we can add value for funds in these circumstances because we are equipped to handle these new structures," he adds.

Asian funds, however, may emerge less affected than hedge funds in Europe and the USA, according to Florence Lombard, chief executive of Aima in London, in a recent interview with AsianInvestor. Once the markets and the economy begin to recover, investors are optimistic that a rebound will be quicker in Asia than elsewhere, she says.

This could spell further opportunities for fund administrators in the region.

"In terms of trends, funds in the next 12 to 18 months will run on a leaner basis, particularly in terms of their infrastructure, so there is an opportunity for them to outsource more,” says Nero of DB HedgeWorks.

“Secondly, from an investor’s point of view, they are looking for more infrastructure and transparency, so we believe there will be greater demand for services like ours,” he adds.

Martin O’Regan, based in Singapore, will serve as head of client services for the bank’s hedge fund administration business in Asia. Martin has over 10 years relevant experience and joins from UBS Fund Services in Hong Kong, where he was director of business development.

Tom Dolan, based in Dublin, will serve as head of client services for the hedge fund administration business in Europe. Tom has over 15 years relevant experience, and joins the bank from Citco Fund Services in Dublin, where he was an operations manager.

The new offices will complement the group's existing operations in California, Massachusetts and the Cayman Islands.

DB HedgeWorks was established in 1999 and acquired by Deutsche Bank in January 2008. The firm provides independent administrative services to hedge funds, including investor services, fund accounting, net asset value (NAV) calculation, customised web reporting to managers and investors, and funds of funds custody.