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Global Custodian Named CommonWealth Category Outperformer

Sep 17, 2015

Global Custodian Hedge Fund Administration Survey 2015

CommonWealth Fund Services Ltd. accounted for a significant proportion of responses from Canadian clients and along with Apex Fund Services is a major player in the business there, accounting for almost half of the responses by number and weight. The firm is focused primarily on Canada. Its AuA has increased from under $1.0 billion at the end of 2012 to over $3.5 billion, an impressive achievement considering the size of the Canadian market. “Given our market share in Canada has reached critical mass, and leveraging off our low cost of production thanks to the relative value of the Canadian dollar, this year we began to offer our services in the U.S. market for mid-sized hedge funds,” says CommonWealth. “We hope later this year or early next year we will gain more U.S. clients as a result of our efforts.”

That aspiration will be boosted by the fact that for the second year in succession CommonWealth posted strong scores. While the number of responses means that results can be more volatile, the overall picture remains very solid. Good gains were recorded in 2014 both in Investor Services and Relationship Management. These are key considerations for funds looking to change administrator. However the scores for Technology, lower than 2014, will perhaps be a disappointment in spite of being mid-way between 5.0 (good) and 6.0 (very good). Clients´ comments suggest that some would like to see better on-line capabilities, with one mentioning a desire for a better portal for investors. Overall however, comments, likes scores, reflect a very position perception on the part of clients. With many funds worried about the business commitment of some service providers, the future looks bright for independent specialist firms like CommonWealth.

CommonWealth Fund Services Results

CommonWealth: by size (%)

  • Small: 30.2%
  • Medium: 32.1%
  • Large: 37.7%

CommonWealth: by type (%)

  • Equity: 71.7%
  • Fund of Funds: 7.5%
  • Other: 20.8%

Survey Overview

The last twelve months have been challenging on many fronts for the hedge fund administration industry. A variety of business purchase and sale deals have been announced and the raft of new regulations and requirements shows no signs of slowing down. Against this difficult background the efforts of the professionals involved in the industry day to day are admirable and clearly much appreciated by clients, wherever in the world they are based and whatever size and complexity they embody.

The level of consistency in scores over the last three years is remarkable. Across thousands of clients and tens of thousands of data points, consistency would be hard to achieve even in a relatively stable environment, let alone one with as much change as this one. While it is true that scores did decline in 2014, they still averaged better than 6.0 (very good) both overall and in six of the eight categories, a feat repeated in the current year’s results. Changes between 2014 and 2015 were statistically insignificant, but for the most part did edge marginally higher.

About CommonWealth Fund Services Ltd.

Founded in 2007, CommonWealth Fund Services Ltd. is a Canadian fund administrator servicing 100 domestic and offshore investment funds totalling more than $7.5 billion in assets. CommonWealth calculates fund net asset values on a daily, weekly, monthly, or quarterly basis, acts as transfer agent, and supports its clients with financial statement and tax return preparation. The firm has its Section 3416 qualification. CommonWealth’s parent company, Caledon Trust Company, is federally chartered and regulated by the Office of the Superintendent of Financial Institutions. Caledon acts as trustee for many funds which CommonWealth administers. Further information on CommonWealth is available on the company’s web site at www.commonwealthfundservices.com.