Citco Fund Services last week announced that it will offer a suite of technology based support services aimed at hedge fund clients. It is anticipated that this will benefit the funds by improving operations while reducing administrative costs.
Recent research papers and statistics show that hedge funds offer returns that are market neutral, and therefore often considerably higher than traditional equity investments, with considerably less risk. In 2001, hedge funds outperformed equity portfolios by about 15% on average. At a time of falling equity markets, and uncertainty about the prospects of equity markets in the future, hedge funds are being seen as increasingly attractive options. Citco has been alert to these developments, and already has a substantial presence in the market, servicing over 1,000 hedge funds with assets under administration exceeding $100bn.
The new solution delivers complete technological support to a hedge fund in a seamless, front-to-back environment. William Keunen, Director of Citco Fund Services, said *”This is truly a dramatic evolution in fund administration services. We will now be able to give fund managers desktop access to order-management and risk-management tools that generate real-time information about their funds.”*
The fund manager’s trading activities will be linked to Citco’s full middle- and back-office support using a single database, which will be used to produce daily P&L results and pricing for complex hedge funds. This will enable Citco to meet a growing demand for fully-fledged operational support within the hedge fund industry.
Effectively, this enables fund managers to outsource the challenges of identifying and implementing their operational and technological requirements, reducing spending on these aspects of the business as a fund grows.
Andrew Dipkin, President of Citco Fund Services (Bahamas) Limited, said *”It’s an exciting new product for us. The added benefits along with the current industry trend for outsourcing will continue to foster the growth of our business globally, including here in The Bahamas. Citco will be Beta testing this new application through the third quarter of this year. Once this testing has been successfully completed, we will commence offering it to our existing client base as well as to new clients.”*