Funds under administration in the Channel Islands are slowly starting to recover after a dismal couple of years for the domicile. There has been an increase in fund managers moving parts of their business to the islands that are being considered more as a springboard into the European market.
There are more signs that growth may be resuming, particularly in the hedge fund market.
One of Guernsey’s key advantages in its rebuilding will be its reputation for strong service provision, and HSBC Securities Services (Guernsey) Limited remains one of its strongest providers. It has had asset increases under management of 5.13% – to $12,709 million in the nine months to June 30, 2010 – and has seen its client base grow from 27 to 29 in spite of some client fund liquidations.
HSBC has seen a number of significant new client wins during the year due to its strength in automating the investor services process. Its reporting and management fee rebates, expertise in complex fund structures and the ability to price all assets via our global pricing team have been key selling points.
HSBC has also implemented passive hedging solutions this year that allow clients to outsource the management of currency related market risks with the use of asset and share class hedging programmes. The new service automatically monitors cross-currency exposures, performs hedge adjustments and executes forex transactions in the market place.
The group has continued to improve its technology capabilities during the year, with a particular focus on expanding its straight-through processing ability. The use of clearing platforms is now giving clients the opportunity to distribute funds to a wider investor base.
HSBC believes its strength in the Channel Islands comes from its lengthy track record and experience with administering a wide range of funds.
Hedge funds are likely to be a significant growth area on the islands and, as such, the group should be well-positioned to continue its dominance.
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