In prior surveys, we had to limit these tables to administrators experiencing growth rates greater than 20%. In the Q4 2008 edition, growth tables were limited to those firms with any growth to show over the last six months

Large growth was limited to small administrators. Nottingham Investment Administration and Piedmont Fund Services both experienced triple digit growth in reported $AuA in the last six months, however both did so from bases below $5 billion. Piedmont grew $AuA 350% in six months while Nottingham rose 390%. Nottingham was near the top of the leader board for growth in Q1 as well when $AuA increased over 60% from the prior quarter. The North Carolina based firm reported $6.61 billion in hedge fund $AuA at the end of 2008.

There appeared to be much more limited growth available for FoF administrators. Only 7 of the 51 reporting firms were able to grow $AuA and only 4 were able to grow more than 10%. The largest growth came from Apex Fund Services which increased $AuA by 33% from Q2 2008 to $1.19 billion and added 9 new FoF clients.

Growing the Client Base

During such times of distress, growth of the client base amid industry wide asset reductions can be a signal of a stronger future. For some this growth has come from the industry’s consolidation trend, but for others it is pure organic growth.

Custom House Global Fund Services added the most new clients of any HF administrator in the last six months. The firm’s merger with Equity Trust increased hedge funds under administration by 80 to 344. Non-merger growth for CACEIS Investor Services added 41 new fund clients while Deutsche Bank’s takeover of Hedgeworks early in the year has resulted in solid post merger client growth. The firm now named DB Alternative Fund Services added 27 new clients in the last six months.

Citadel Solutions experienced a combination of increased client base, but one that sustained large losses. The firm, a spinout from hedge fund firm Citadel Partners in 2007, increased its client base 61% in the last six months, but at the same time saw the average fund size shrink 69%, one of the worst performing client bases since June.

In our Q1 survey, Kingsway Taitz Fund Administration was one of the fastest growing admins by $AuA. In the last size months they have continued to grow the client base, despite falling assets. The Australia based administrator increased their HF client base by 30% in the last six months, despite average client size falling 30%.

Other firms which have been able to grow their client base significantly include Apex Fund Solutions, Piedmont Fund Services and JPMorgan Hedge Fund Services. These firms stand to show the most improvement should aggregate hedge fund performance show signs of life.