22/02/2012 Author: Will Wainewright (London)

Exclusive - Citco wins Marshall Wace mandate, ending Citi relationship

Marshall Wace has hired Citco to provide fund administration services to all its hedge funds, worth nearly $6bn in assets, ending a 14-year relationship with previous provider Citi, HFMWeek has learned.

A source at the London hedge fund manager, founded by industry veterans Paul Marshall and Ian Wace in 1997, denied that the move was driven by dissatisfaction with Citi’s performance, saying the mandate was put out to tender last year to “test the state of the market”.

The move, which has not yet been disclosed to Marshall’s investors, marks a significant gain for Citco Fund Services, which leads the admin market by some distance in AuA terms, with more than $500bn under administration.

Single manager hedge fund assets administered by Citi Hedge Fund Services stood at $173bn as of HFMWeek’s November survey, and losing Marshall Wace will be a blow to the fifth-ranked admin firm.

However, the source emphasised to HFMWeek that the decision to review and switch admins was not a result of displeasure with Citi. “I would not characterise it that way,” they said. “In the middle of last year we spoke to directors and thought that, given the pressure on prices and technological developments in the admin market, it was sensible to put out a request-for-proposal”.

The move is expected to be completed in April, from which point all of Marshall Wace’s funds, which predominantly have a long/short equity focus, will be administered by Citco.

Representatives from Citi Hedge Fund Services could not be reached at the time of writing.

Read HFMWeek next week for a full round-up of the fund administration market.