Traditional fund administration services have been commoditised very far. So far, in fact, fund managers now evaluate providers on the basis of their value-add offers in front- and middle-office functions, a survey shows.
Global Custodian has picked up a report by Nasdaq’s analyst subsidiary Evestment, from its yearly Alternatives Fund Administrator Survey. It gives the picture of a highly mature industry, where those who purchase the administration services are hardly able to distinguish between providers on the basis of the core functionality.
Focus moves from cake to icing
Instead, the winners will increasingly be picked based on how they perform in the areas of integrated front- and middle-office services, and value-add services including data management, cash and collateral management, according to the article.
“The traditional ‘fund administration bundle’ seems to be taking a back seat to highly tailored operating models which incorporate a mix of traditional services and ‘value-add’ service – including data aggregation and normalisation, flexible reporting tools combining data sets by multiple parties and trade operations support and connectivity,” a global fund administrator is quoted as saying.