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ANNUAL OFFSHORE HEDGE FUNDS ADMINISTRATORS SURVEY
 

Largest Third Party Administrators of Offshore Hedge Funds

Market share by net assets

Market share by number of funds

# of fund administration offices (principal office)

Citco Fund Services

21.5%

19.2%

14 (Curażao)

Hemisphere Management

12.7%

10.2%

3 (Bermuda)

Goldman Sachs

11.0%

6.2%

3 (Cayman)

Fortis

9.6%

8.9%

7 (Amsterdam)

Bank of Bermuda

7.6%

7.2%

8 (Bermuda)

International Fund Services

6.6%

4.8%

2 (Dublin)

UBS (Cayman) Ltd.

6.0%

8.5%

1 (Cayman)

Prime Management

3.3%

0.8%

1 (Bermuda)

Olympia

3.1%

8.2%

4 (Bermuda)

Leeds Management

2.4%

1.4%

3 (Bermuda)

International Fund Administration

1.7%

2.5%

3 (Bermuda)

Daiwa Europe

1.6%

1.7%

1 (Dublin)

SEI Investments

1.2%

1.6%

2 (Bermuda)

PFPC

1.2%

1.4%

5 (Dublin)

Admiral

1.0%

1.5%

1 (Cayman)

International Fund Managers

0.8%

1.2%

2 (Dublin)

Butterfield Fund Managers

0.6%

2.9%

3 (Bermuda)

Trident Trust Company

0.6%

1.5%

4 (Cayman)

Custom House

0.5%

3.9%

1 (Dublin)

Meridian Corporate Services

0.3%

1.6%

1 (Bermuda)

Amicorp

0.2%

2.7%

3 (Curażao)

Source: HFN proprietary research on over 3,600 offshore hedge funds with total reported capital in excess of $410 billion.

Our annual survey of offshore hedge fund administrators provides the broadest picture of the offshore hedge fund industry. Offshore hedge fund assets have continued to grow from a year ago with total single manager fund assets up 23% from $340 billion in June 2001 to $418 billion in June 2002. However, signs of slower growth have recently appeared, particularly in the flow of assets to US based managers, while Europe continues to be strong. New US based managers starting-up offshore hedge funds are finding that it takes more time to get an offshore fund off the ground than it did a just a few months ago. Offshore administrators have noted a flight to quality where capital has been flowing out of relatively young funds popular a year or two ago in favor of well-established hedge funds with consistent, if not exciting, track records.

The key words capturing the trends in offshore administration are integration, due diligence and institutionalization. Administrators are providing many more types of reports and doing it more frequently than in the past on valuation and risk analysis. There is a developing trend in integrating the administrator's role with the hedge fund's operations. While a couple of years ago, only one or two administrators focused on "front to back" solutions, more are either already offering or developing platforms including a single data point of entry with a trade capture system and the ability to flow "seamlessly" into financial and tax accounting systems, risk management and investor reports (see Hedge Fund News August 2001). Due diligence by all participants in the hedge fund business, managers, administrators and investors is on the rise including additional monitoring and control functions mandated by money-laundering prevention and other requirements derived from the USA Patriot Act (see Hedge Fund News May 2002 issue). Finally, the institutionalization of the hedge fund world which we reported on in prior years' surveys is further evidenced by two major ownership changes with the acquisition of Hemisphere by Bisys and the announced acquisition of IFS by State Street Bank. A.B.

Jurisdictions of Incorporation

Overall Market Share as of 12/31/01

Overall Market Share Five Years Ago (12/31/96)

Cayman

51%

29%

BVI

27%

44%

Bermuda

12%

13%

Bahamas

4%

8%

Ireland

2%

0%

Source: The U.S. Offshore Funds Directory 2002 Edition

 
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