Gwyn Roberts

23/11/2011 Author: Gwyn Roberts

Editor's view: 23 November 2011

"For a bad year, it’s been a remarkably good one.” Last week this was the tautological assessment from one leading administrator on the health of his sector. With HFM’s own admin numbers announced today, we can now clearly see that this confusing statement is true in parts.

First, the good news. In the face of performance woes, funds have proved remarkably robust. The industry – so far – hasn’t staggered backwards, instead slipping into a period of comfortable stasis with growth of 3%.

And in among this relatively flat terrain – particularly compared to a growth rate of 15% in the six months up to May – there have been impressive admin performances. BNY Mellon has seen its single manager share shoot up by 11%, while the remarkable HedgeServ story continues with a 30% surge. Little wonder this business is seen as a likely acquisition target.

Despite individual achievements, not all is rosy. Small firms are struggling, while a significant swathe of larger firms are coming under more scrutiny as managers look for counterparties with the strongest of balance sheets – a situation that has left the large bank-owned players in pole position.

However, HFM’s administrator remains largely correct: for a bad year, things do seem relatively positive. Launches may have dwindled and balances are threatened by  final quarter redemptions, but new products, better customer service and a flight to quality will keep the best of this sector buoyant.

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