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ANNUAL OFFSHORE HEDGE FUNDS ADMINISTRATORS SURVEY
 

By Antoine Bernheim, Publisher

We present below the results of our annual survey of the principal third-party offshore hedge fund administrators. While the environment for offshore fund creation and capital raising became considerably more difficult after the summer of 1998, the overall business continues to grow. Several trends, which we mentioned in prior surveys, are likely to strengthen the position of the half dozen firms which dominate the business. Those firms benefit from their ability to offer many services beyond pure administration, such as banking, custody, securities lending and others. Prime brokers and administrators are attempting to deliver a seamless product, either through the prime broker’s own administration activities, like Goldman Sachs, or through preferred relationships such as the one established between Hemisphere and Morgan Stanley. As we had anticipated, the repeal of the "10 commandments" has had only limited impact on offshore administrators. Moreover, the increased popularity of the master-feeder structure has actually facilitated the development of the offshore administrators’ business devoted to US partnerships.

Principal third party administrators of offshore hedge funds

Market share by number of funds

Market share by net assets

Citco

26.6%

31.0%

MeesPierson

19.3%

14.0%

Hemisphere

12.5%

9.5%

Bank of Bermuda

9.7%

11.9%

Olympia

6.8%

2.4%

Goldman Sachs(Cayman)

4.4%

6.1%

I F S

3.9%

2.7%

IFA

3.9%

1.7%

Leeds Management

2.0%

2.2%

Trident

1.7%

0.9%

Daiwa Europe

0.9%

1.0%

Others

8.5%

16.5%

Source: Hedge Fund News proprietary research on over 2,000 offshore hedge funds with total reported capital of $175 billion.

The Caymans have further strengthened their position as the jurisdiction of choice for new incorporations at the expense of the BVI. Stock exchange listings for offshore hedge funds continue to grow as a result of European and Asian regulations as well as the new NASD rules for hot issues. For access to past years’ analysis of offshore hedge fund administration, please refer to www.hedgefundnews.com. A.B.

Jurisdictions of Incorporation

Overall Market Share as of 12/31/98

Market Share Among Newly Formed Funds

Cayman

36.5%

47.9%

BVI

37.6%

24.5%

Bermuda

12.7%

14.9%

Bahamas

7.6%

7.4%

Source: The US Offshore Funds Directory 1999 Edition.

 
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