Hedge funds opting to outsource administration
Hedge funds are increasingly outsourcing their back office in order to concentrate on their core activities of trading and generating alpha, according to a new report published by Celent.
The report, ‘Trends in Hedge Fund Administration 2008’, found that “a majority of hedge funds (in the US) have opted to unload the burden of maintaining a back office as competition in the sector heats up”.
“Additionally, increased fund complexity and shifting sources of capital have created an incentive environment that is highly conducive to the outsourcing trend,” it said.
In turn, the report found hedge fund administrators are “gearing up their offering to grab a share of the rapidly growing market, including for fund-of-fund administration”.
“Fund administrators are revisiting their operational infrastructures in terms of technology, organisation and staffing as well as their geographic footprint.”
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