18 May 2012, Custody Risk , Risk magazine
In 2011, BNP Paribas grew its business through practical innovations to ensure it met the increasingly complex needs of its US-based clients. One new client win was Equinox Fund Management, a $1.5 billion US commodity pool operator with a managed futures investment strategy that selected BNP Paribas to provide daily net asset valuation (NAV) on its liquidity product, which has more than 25 underlying commodity trading advisers across multiple investment series.
BNP Paribas introduced a new reporting platform that communicates fund information – such as investor statements, reports, fund notices and capital calls – in real time. The bank also re-engineered its end-to-end fund administration platform, adding a module that helps simplify the transfer agency process and reduces operational risk.
BNP Paribas’ staff have been extremely innovative in harnessing the convergence of traditional and alternative investments. In August, they released an NAV system that captures and values trades in real time and produces an NAV shortly after market close, which can then be used by clients to make their own NAVs on a daily basis. This provides the transparency required to value alternative fund investments in the regulated mutual fund marketplace. BNP Paribas’ technology platform also allows the simultaneous tracking of trading notional and trading assets, which is relevant to derivatives-based investment strategies. This helps bridge the gap between hedge funds and mutual funds.
One of the main client concerns in 2011 was raising additional capital in the difficult environment. The securities services division at BNP Paribas managed to tap into its relationships with the investment banking division and other investment partners to facilitate networking events and help clients attract more capital. In January 2012, BNP Paribas appointed Claudine Gallagher as regional director, North America, for the securities services division to spearhead these efforts, including rolling out the bank’s global and local custody services. Gallagher has a host of experience at JP Morgan and at BNP Paribas, where she worked from 1995 to 2001.
The securities services arm has robust internal controls, including a repository of cash forecasting and reconciliation tools, and the ability to utilise all the capabilities of a diverse, global bank.
BNP Paribas is set to have another good year in 2012 as it looks to grow its presence in the US and South America and build on its success after being named Custody Risk Fund Administrator of the Year: US.
(Pictured: Andrew Dougherty, Managing Director and head of Alternative Insitutional Solutions, BNP Paribas)