Citigroup enters Asian hedge-fund admin business
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Citigroup takes on an incumbent trio of hedge-fund administrators in Asia-Pacific. Citigroup has launched its hedge-fund administration in Asia under the local command of managing director Matt Brown.
The firm already offers these services elsewhere in the world. It established its hedge-fund administration services originally in the United States in December 2004, and now has $45 billion in assets under administration and employs a roster of 150 staff.
It will be a full service hedge-fund administration provider, including fund and portfolio accounting, general ledger accounting, shareholder record keeping, corporate secretarial services and customised statements and accounts. Its move eastwards is seen as a natural extension of existing mature operations and complements the growing prime brokerage operations in Hong Kong, which are under the stewardship of Hannah Goodwin.
In stage one of its build-up, by the end of this year, Citigroup estimates it will have six accountants operating out of Singapore and up to four people on the client facing side. Nadine Teychenne, based in Hong Kong, will handle regional marketing for financial institutions in the region.
“We’re actively hiring for operations through to the end of this year, and product managers who will run the business,” says Matt Brown in Hong Kong. “We’ll also be re-allocating staff from Europe and North America.”
Citigroup says it doesn’t want to reveal its targets for capturing hedge-fund administration market share in Asia, but says that the sources of business have been identified as potentially threefold. Firstly Citigroup already has funds on its global client list. “Moving the spaghetti around the plate,” embellishes Richard Ernesti, managing director and global sales head of alternative investments administration, who is based in New York.
Secondly it will target funds setting up in Asia that already have existing operations in North America and Europe, and thirdly it will go after the local funds rolling out new strategies.
In the recent past, Asian hedge fund administration business has been split principally between Citco, Fortis and HSBC. This additional choice will be welcomed by Asia’s hedge-fund community, which has been spoilt for choice in the mushrooming prime-brokerage arena at the same time as the menu for administrators has remained in suspended animation.
“Hedge fund managers are unhappy in Asia with hedge fund administrators,” says David Russell, managing director of Citigroup's securities and funds services in Hong Kong. “They think providers have been complacent.”
Citigroup is already one of Asia-Pacific’s largest custodian banks and one of the biggest securities lenders in the region.