eVestment|HFN Hedge Fund Survey: Consolidation A Key Trend

New York (HedgeCo.Net) – European economic challenges continue to weigh negatively on an otherwise positive year for hedge fund administrators, according to a new survey by eVestment|HFN.

“The administration industry is feeling the effects of the European crisis,” said Peter Laurelli, Vice President, Research, eVestment|HFN. “After seeing outright declines in reported Europe-based hedge fund assets under administration during the latter half of 2011, growth turned positive in the first half of 2012 for firms’ European businesses although lagging growth in other regions.

The survey also found:

  • The trend of consolidation of assets towards the largest hedge fund firms is being mirrored in the alternative administration industry.
  • The consolidation of the administration industry through acquisitions is being driven by economies of scale as regulation and more sophisticated services reduce margins.
  • Firms reported $2.819 trillion in single manager hedge fund AuA for 12,130 hedge funds.
  • Citco, State Street and BNY Mellon topped the league tables with a combined $1.3 trillion in AuA.
  • The top five firms reported $1.8 trillion in single manager hedge fund AuA.
  • Single manager hedge fund AuA grew by 5% in the first half of 2012
  • Consolidation within the administration industry has been a key trend in recent history with firms seeking to take advantage of economies of scale and to offset the effects of costlier and more sophisticated services.
  • The recent acquisition of GlobeOp by SS&C placed the combined firm firmly among the top five in terms of single manager AuA.

In addition to reporting hedge fund results, administrators also reported $763.5 billion in fund of funds AuA, $48.1 billion in managed account AuA, $123 billion in hedge fund UCITS AuA and $1.368 trillion in other alternative AuA. The total reported AuA for the alternative investment universe was $5.122 trillion at the end of Q2 2012, an increase of 7% for the first half of 2012. Full report available here.

Alex Akesson
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