HFMWeek (HFM): What are the main reasons for moving from institutional to global independent providers? Are there any trends which you are experiencing?
Ashmita Chhabra (AC): Larger asset managers are now starting to actively review their administrator relationships. This new focus largely stems from business uncertainty as the market continues to witnesses bulge bracket investment banks restructuring and evaluating the profitability of their non-core business units. There is a certain amount of unease around whether these bank-backed institutions will continue to invest in their administration arms or seek longevity in relationships with clients. In addition, the emergence of an increasing amount of ‘hybrid’ funds demonstrates how the lines between hedge and private equity managers are increasingly blurred as managers battle to stay competitive; as a result there are valid concerns around the flexibility that these institutional service models are able to offer.
In Asia, the size of medium managers tends to be smaller than in the US, thus service continuity and stability concerns are greater. Cost efficiency is also of higher significance and it directly impacts the amount of work outsourced. Recent data trends show that the market is changing and investors are now more inclined to pay for performance. Investors may try and drive for better terms but the real impact is actually not on the performance fees, but the management fees. In light of this managers need to find other ways of reducing costs and bringing more efficiency to the business.
HFM: What advantages are offered to funds by global independent providers such as Apex? And why choose Apex above others? How do you differentiate from others?
AC: The Apex business model is built around a highly dedicated, responsive and full ranging fund administration offering. Each of the 33 offices globally have been developed to service clients locally, while also delivering the ability for cross-border services through close working relationships throughout the Apex global group. In an era where personalisation and attention is vital, Apex is not affected by other business arms clouding its vision or hindering client service. This allows the full focus of the business to remain on delivering excellent client service and increasing a fund’s efficiency while keeping costs competitive.
Why choose Apex? For me, it’s the service model that sets Apex apart from other firms in the industry; Apex offers a mix of global and local expertise delivered through experienced local teams. Apex does not adhere to the common set-up of simply hosting frontline staff alone in key locations, with the operations team outsourced to local jurisdictions – as so often happens with other administrators and some of the large bank providers as well. This set-up guarantees proactive service coverage for clients on a local basis while also giving them access to additional global expertise as required. It is one of Apex’s most valuable differentiators, complemented by the fact that the teams boast strong backgrounds in fund accounting, which is what makes Apex truly unique.
HFM: What is the transition process like? How seamless is it? How long does it take?
AC: It is our duty as an administrator to ensure that the transition process is fast, seamless and uncomplicated. Local service delivery ensures overheads are kept low, and, as a result, investors can appreciate the decision to switch to a provider that is committed to the business and will directly affect the funds’ performance by providing a cost effective solution.
The process for switching to Apex is now a well trodden path. Once the decision has been made, Apex conducts a full due diligence and client risk assessment process, which usually takes between two and seven days depending on where the manager is based and the profile of the fund. The local Apex operations team continually
interact with the fund and previous administrator during this process to obtain all the documentation required and to ensure service levels are kept high throughout and that the transition period does not affect the ongoing activity of the fund. A ‘go live’ date will be agreed and prior to this date a full NAV test across all systems will be completed to ensure everything is set up correctly and that there will be no disruptions as the fund transitions. The notices provided to the existing administrator range from 60-90 days and coincide with the ‘go live’.
HFM: How has market demand changed? What is expected from the administrators now?
AC: If you look at how managers pick administrators, alongside the normal evaluation process, there has traditionally been a preference for automatically leaning toward a bank backed institutions… but the market has changed and managers now have different considerations for selecting their service partners.
Managers are now seeking true fund partners and look for providers that can demonstrate that they are committed to supporting the business for the long term. These providers are sought to enable enhanced outsourcing of services and to reduce a manager’s operational burden. The administrator’s service model must be robust yet nimble in order to give comfort to the fund investors who are increasingly involved in the service provider selection process. Any market costs are now a consideration, so, in respect to the size of the manager, we like to see that they are getting more bang for their buck.
HFM: What will act as a driver in growth over the next 12 months? Are there any trends that will be significant to growth?
AC: Over the past few years the administration space has experienced a significant amount of M&A, which I anticipate will continue. However, I also believe it will be the administrators that keep investing heavily into evolving the business that will enjoy significant growth. Furthermore, administrators must ensure that they are offering a more flexible and customised suite of solutions that adeptly address market demands. Administrators cannot just offer traditional administrative solutions and expect to remain competitive. The importance of a provider’s ability to cater to any type of fund, across all geographies and structures can also not be underestimated and it is largely Apex’s ability to do all of these things that has resulted in the firm being listed in the top 20 administrators globally, and as one of the fastest growing administrators over the last six months in the recent HFMWeek AuA survey.
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Ashmita Chhabra, Managing Director Apex Singapore and Head of APAC Business Development
Ashmita Chhabra is Managing Director at Apex Fund Services (Singapore) Pte. Ltd., overseeing business development strategy for Asia Pacific and working closely with the 5 offices in the region. Prior to joining Apex in 2015, Ashmita spent ten years building the business at Eurekahedge, a subsidiary of Mizuho Bank. As Director of Global Sales, she oversaw the entire sales function with teams based out of Singapore and New York. She was responsible for key relationships with global institutional investor groups, family offices, advisory firms, fund of funds, investment banks. Ashmita has a Masters in Economics from the National University of Singapore and Bachelors in Business & Commerce from Delhi University, India. She also holds an Executive Programme Certification in Mastering Alternatives Investments from INSEAD.
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