• Home

• Contact
• About
• Advertise
• Subscribe
• Trial
• Search
• Free Email

The administrator, with $30 billion in assets under administration, has licensed the Paladyne product suite, an integrated front to back office solution. This gives Admiral a comprehensive middle office services platform fully integrated with its existing portfolio accounting system, Advent's Geneva. Admiral has also been given distribution rights to provide its client base direct access to Paladyne's products.

The move was described as "crucial" by Ben Pershick, head of business development at Admiral. "If we don't put technology in place we will be left behind, he said. Pershick said the administrator had made the investment for a number of reasons, many reflecting the growing need by hedge funds for this type of service. He said Admiral believed "proper technology" was needed in order to offer middle office solutions to clients. "We wouldn't have been able to offer this level of service," he said.

Admiral will use Paladyne's application service provider solution for hosting, disaster recovery and IT support for Paladyne products and Advent's Geneva. It will be able to provide clients with web based access to Paladyne's front office trading, portfolio management, real time P&L and custom reporting tools.

Many in the industry believe the future viability of fund administrators will depend of the ability to offer a full service middle and back office, not just the standard net asset value (NAV) calculation and other accounting services associated purely with back office administration.

Admiral's expanded middle office services will now include trade execution and order management support, trade confirmation and settlement processing, trade reconciliation with prime brokers, custodians and counterparties and daily position and P&L reporting. It will also be able to offer clients daily reconciliation with books and records, reference data management and corporate actions processing as well as enhanced pricing and model based valuation services and an integrated interface with a client's preferred risk providers.

According to Pershick the technology will allow Admiral to offer comprehensive risk reporting so portfolio managers and investors can "slice and dice data". At present, however, Admiral will not be providing independent price valuation although it will continue to be able to ensure a fund's valuation policy is being adhered to by checking with independent parties such as Markit, Bloomberg, S&P and others.

Canover Watson, managing director of Admiral in the Cayman Islands said the company is responding to demands from fund managers for more services "with a revolutionary offering inclusive of technology, middle office support and traditional fund administration. By providing our client base with direct access to Paladyne's front-to-back office technology platform, we can assist managers through the full transaction lifecycle of trading, portfolio management, pricing and valuation and investor reporting while gaining operational efficiencies, scalability and cost savings."

Admiral, like other fund administrators, is hoping to attract significant new business from US-based fund managers who are shifting from in-house administration to independent providers. This could push significant business to fund administrators suffering from the fall-out from hedge fund closures and the loss of assets under management due to high redemptions from investors in funds at the end of 2008.

Sameer Shalaby, CEO of Paladyne System, said his company had begun planning for the shift in fund administration towards more developed middle and back offices four years ago. Paladyne began building our services believing multi-prime brokers would be the way to go.

Shalaby also expected to see the new operating model of multi-primes filled by fund administrators who would need to aggregate all the data and support hedge funds from the beginning of the process to the end. This shift into a more technology based platform and offering to hedge funds by fund administrators was accelerated by the events of 2008, particularly the loss of the prime brokerage of Lehman Brothers and Bear Sterns.

As outsourcing gains momentum, Paladyne believed fund administrators would need to expand services including client-facing technology, intra-day reporting and middle office processing in order to stay competitive.