发帖
雷达卡
Comment Now
The reason? Goldman is reportedly selling its $200 billion hedge fund administration unit to State Street which would make the latter the largest hedge fund administrator in the world topping Citco which held the spot for years.Neither Goldman nor State Street were able to comment on the reported deal.
A deal would be major win for State Street. It currently administers $421 billion in hedge fund assets, according to the most recent survey from HFMWeek.The Goldman deal would lift it past Citco’s $535 billion by a decent margin.
What is it exactly that hedge fund administrators do? They are hired by hedge funds to execute important daily business like investors’ requests for redemptions and subscriptions. Hedge fund administrators also confirm and reconcile trading records in stocks, bonds or more obscure securities like derivatives or investments in private equity firms. They also produce the hedge fund’s monthly NAV statements for investors.
Read more about the unregulated world of independent hedge fund administration, and why the world’s largest hedge fund administrator, Citco, is being blamed for not catching Madoff.The hedge fund administration industry has become increasingly important since 2008 mostly as a result of the Madoff scandal. For years before the Madoff mess most hedge fund managers handled such administration in-house but that practice has come to a halt. Self-administration, the argument goes, opens the gates to fraud since no one beside the hedge fund manager can verify that the assets exist in the first place and that securities are actually being traded. And those all-important monthly NAV statements, investors rightfully feared, could be altered or simply made up. Today, it’s almost unheard of for a hedge fund to do its own administrative services.
Goldman wouldn’t comment on the reason behind the sale but its unit is currently #4 on HFM’s ranking behind Bank of New York Mellon. Currently York Capital, Och-Ziff CapitalManagement and Bill Ackman’s Pershing Square Capital Management use Goldman as their administrator, HFM reports. There’s some speculation that the sale is a way for Goldman to raise assets and also streamline its non-core business.
Either way Goldman’s potential exit out of the hedge fund administration business is a good thing for investors whose assets sit with hedge funds that use the firm. Why? In some cases, Goldman could have served as both the prime broker and the hedge fund administrator–thus limiting the checks and balances in place.
It will be interesting to if Morgan Stanley and Citi follow suit. Morgan Stanley and Citi are also among the top 10 largest hedge fund administrators with $142 billion and $199 billion respectively. JPMorgan Chase is further down the list ith $61 billion. It will be interesting to if these firms follow Goldman’s lead.
京公网安备 11010802022788号
