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FUND ADMINISTRATION

THISYEAR’S SURVEY features19 participants, as opposed tothe 20 that appeared in 2011.Thenotable absentee is Bank ofIreland Security Services(BOISS) which was acquiredby Northern Trust in June – amove that signified the pressurefacing Ireland’s domesticbanking sector and alsogave Northern Trust (NT) a boostin terms of exchange-tradedfunds expertise.

Given that competition is sofierce among third-partyadministrators (TPAs), it isperhaps surprising that theBOISS/NT deal is the onlyexample of consolidation. But asDavid Dibben, head of globalfund products at RBC DexiaInvestor Services, says:“Thenumber of players appears tohave stabilised, and many firmsare now concentrating onestablishing unique elements totheir service which will makethem more attractive inparticular niches.”

The numbers in the 2012 fundadministration survey suggestthat times are tough. Net inflowsfor 2011 are at least positive with€294.7 billion; however, this isless than half the 2010 figure of€630 billion. Conversely, thenumber of funds or mandateswon by the 19 firms thatparticipated totalled 5,182compared with the 1,828 of 2010.

FIERCE COMPETITIONThis could, of course, mean thatthe extra mandates were not aresult of new fund launches butinstead indicative of the fiercecompetition that exists in the TPAmarket and the willingness of

managers and asset owners toswitch providers. Proving this isthe case, however, is not so easy.The survey shows that themajority, but not all, ofparticipants are happy enough totell of the number of mandatesthey retained but, unsurprisingly,not of those that they lost.

Looking in more detail atsome of the new funds andmandates awarded in 2011, thesize of the assets underadministration varied from €979billion (State Street and aninvestment operationsoutsourcing deal for aninvestment manager) to€87 million (Swedbank and aUcits fund). As with previousyears’ surveys, there was a widevariation in the client types(traditional asset managers,pension funds and insurers onone side and a Nordic privateequity firm on the other) andalso the product types.

Another metric of note is thenumber of net asset values(Navs) calculated each month.BNY Mellon tops the 2012survey with more than 255,000 –an increase on last year’smonthly figure of 198,000.Meanwhile, at the other end ofthe scale, the 85 monthly Navscalculated by IPES is also anincrease on last year’s 75. Themajority of participants haveseen an increase in theirmonthly Nav calculations. Theneed for more regular Navcalculations relates to one of themost commonly statedchallenges of the TPA market –the increasing demands of theirclients fuelled as they are by thedemands of their investors and a

Net inflows for third-party fund administrators are half what theywere on the previous twelve months, finds Nicholas Pratt

desire for greater transparency.In terms of the geographies

targeted by administrators,there are very few surprises –Europe, Latin America and Asiafeature heavily. Some are morespecific – RBC Dexia citesMalaysia, Taiwan and China asits Asian targets; Custom Housementions Brazil; and in Europe,Russia (IPES), Switzerland (JPMorgan), Netherlands(Northern Trust) and Jersey(UBS) are mentioned alongsidestalwart jurisdictions such asDublin and Luxembourg.

Next year’s survey may yetthrow up new geographicalopportunities. However, it maywell be that TPAs’ internationalexpansion efforts over the pastfew years have been successfulenough that there are fewterritories left uncharted. fe

A stablemarket

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SURVEY RESULTS

April 2012

Nineteen companies responded to Funds Europe’s annual survey of third-party fundadministrators. Here is an indication of how their businesses performed over 2011

The figures…

at 31 December 2011 (ranked highest to lowest)

* $/€ conversions by Funds Europe, 31 Dec 2011

Global domiciled in third-party(€ bn) Europe (€bn) admin staff

State Street 16,841 3,398 n/d

JP Morgan WSS 5,050 2,097 2,000

RBC Dexia 2,066 1,014 5,500

HSBC 1,860 1,153 n/d

Citi* 1,161 549 4,522

Caceis 1,040 1,010 1,450

Northern Trust 957.5 266.8 2,811

BNP Paribas 845.7 638.4 n/d

BBH 797 244 n/d

Soc Gen 413 353.9 >1,000

SEI >310 >31 500

UBS 308 227 432

Maitland 71.6 0.2 275

Deutsche Bank 68 27 225

Custom House 38 4.5 250

Capita 36 36 150

Ipes 32 32 130

Swedbank 9.9 1.9 15

BNY Mellon n/d n/d 4,600

ASSETS UNDER ADMINISTRATION

in 2011 (in alphabetical order)

*Emea only**Figures are for funds only

Mandates Won RetainedBBH 186 n/d

BNP Paribas n/d n/d

BNY Mellon* 210 70

Caceis n/d n/d

Capita n/d n/d

Citi 1,012 22

Custom House 30 all (figure n/d)

Deutsche Bank 80 all (figure n/d)

HSBC 1,072 9,357

Ipes 29 n/a

JP Morgan WSS n/d n/d

Maitland** 442 1,224

Northern Trust 215 19

RBC Dexia 222 23

SEI n/a n/a

Soc Gen 105 129

State Street 151 n/d

Swedbank 11 69

UBS 161 n/a

MANDATES WON AND RETAINED

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Note: *Citi gave US$ figures

€bn Client type Product typeBBH 15 Fund asset manager Cross-border funds

8 Institutional asset manager Portfolios8 Fund asset manager Investment funds

BNP Paribas n/a n/a n/aBNY Mellon 8 Asset manager n/a

6.7 Pension Fund n/a4 Asset manager n/a

Caceis n/a n/a n/aCapita n/d n/d n/dCiti* 6 Asset manager Long/Mutual/CIS

5.24 Asset manager Long/Mutual/CIS1.6 Insurance Long/Mutual/CIS

Custom House 0.45 Hedge fund Multi-asset0.06 Private equity Property0.02 Hedge fund Multi-asset

Deutsche Bank 2 FoF special opportunity hybrid

0.7 Hedge fund Irish Ucits platform3.6 Private equity Infrastructure fund

HSBC 14.2 Fund manager n/a0.96 Insurer n/a0.75 Fund manager n/a

Ipes 0.4 Turkish PE fund manager Venture capital0.4 Nordic PE manager Mezzanine fund0.3 PE fund manager Listed PE fund

JP Morgan WSS 25 Pension plan Pension fund0.58 Private bank Mutual funds0.2 Supranational Mutual fund

Maitland 18.1 Fund manager Mutual fund1 Fund manager Mutual fund0.25 Fund manager Mutual fund

Northern Trust 31 Investment manager Outsourcing5.8 Pension Outsourcing2.7 Investment manager Outsourcing

RBC Dexia 2.4 Investment manager Mainstream funds1.3 Insurance Mainstream funds1.5 Bank Mainstream funds

SEI 1.5 Sovereign QIF1.1 Sovereign Cayman0.85 Investment bank Bank debt vehicle

Soc Gen 5.5 Asset manager Asset manager1 US asset manager Ucits funds0.2 Pension fund Investment funds

State Street 979 Investment manager n/a236 Life, pensions and investments n/a226 n/a n/a

Swedbank 0.1 Fund company non-Ucits hedge fund

0.1 Fund company non-Ucits hedge fund

0.08 Fund company Ucits fundUBS 7.8 Bank Multi-asset

3.9 Pension fund Multi-asset2.9 Social security Multi-asset

TOP THREE MANDATE WINS IN 2011 (€BN)

*Emea only**Citi gave US$ figure

Company +/- €billionBBH +22

BNP Paribas +46.8

BNY Mellon* +74.2

Caceis -110

Capita -5.4

Citi** +0.418

Custom House +3.5

Deutsche Bank +27

HSBC +15

Ipes +1.5

JP Morgan WSS +75

Maitland +5.3

Northern Trust +129

RBC Dexia n/d

SEI n/a

Soc Gen -50

State Street n/d

Swedbank +0.26

UBS n/a

NET FLOWS DURING 2011

*Includes segregated mandates

NAVs average permonth in 2011

BBH 48,000BNP Paribas 103,000

BNY Mellon 255,000Caceis n/d

Capita n/dCiti 26,100

Custom House 2,475Deutsche Bank 2,700

HSBC 93,018Ipes 85

JP Morgan 63,900*

Maitland 2,511Northern Trust 92,032

RBC Dexia n/dSEI >2,500

Soc Gen 60,000State Street 233,000

Swedbank 2,089UBS 16,946

NAVS DURING 2011

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