Fund Administrator of the Year - RBC Investor & Tresury Services
RBC Investor & Treasury Services (RBC I&TS) is a leading specialist provider of asset servicing, custody, payments and treasury services for financial and other institutional investors worldwide, serving clients from 19 locations across North America, Europe and the Asia Pacific region.
As a global fund administrator, it administers more than 6,500 funds and calculates more than 2 million net asset values annually. RBC I&TS was consistently ranked among the world’s top 10 global asset servicing businesses during 2013 and continued to achieve top ratings for client service excellence in industry client satisfaction surveys.
Developments in fund administration include global harmonisation and technical improvements to enhance service quality and reduce operational risks, streamlining control processes and monitoring the end-to-end process. Redefined financial reporting covers annual, biannual and quarterly fund reports, including reporting specific to private equity and real estate funds.
Support is now delivered via an expanded team of specialists, offering a wider set of services with a single connection point for clients.
New fund administration solutions include support for the conversion from Canadian Generally Accepted Accounting Principles (Gaap) to International Financial Reporting Standards (IFRS). And, to address change brought by the German Investment Tax Act, the calculation of Aktiengewinn 2.
In 2013, RBC I&TS clients continued to benefit from its financial strength and stability as well as improved operating efficiency. The client base continued to expand, adding clients such as Galibier Capital Management (Canada) which uses a full suite of services including fund administration.
“We chose RBC I&TS because its tailored service solution was a strong fit for our immediate and long term needs,” says Joe Sirdevan, CEO of Galibier.
“We have a positive history of working together and their commitment to client service, which we share, was a true differentiator in the competition for this mandate.”
Another new client is Westwood Holdings Group (USA), which avails of a range of services for the first sub-fund of Westwood’s Irish Ucits umbrella. With its long-established operations in the key centres of Dublin and Luxembourg, RBC I&TS was ideally placed to support this client.
Quaestio Capital Management (Italy) is another fund administration client. Quaestio says it appreciated the flexibility and support it was provided with through the transition and took comfort in working with the investor services business of one of the largest and most financially sound banks in the world.
Hedge Fund Administrator of the Year - State Street
State Street has worked with leading alpha-generating funds for more than 20 years so its management team has a wealth of expertise and experience working directly for leading hedge fund managers.
Core operations teams are supported by dedicated tax, valuation and technology experts and the firm processes more than $170bn of middle-office hedge fund assets.
State Street offers extensive trade support services – including dissemination of trade details to prime brokers and custodians for market settlement – and customisable client portals where fund managers and investors can access data through online platforms.
During 2013, hedge fund assets under administratoon grew by 14.3% and the firm also expanded its global footprint, introduced a wealth of new services and tools for hedge fund managers and launched a new business to help clients turn data into insight.
A new office was opened in Shanghai to provide alternative investment servicing solutions to hedge fund clients expanding their business into China, which allows it to offer custody and administration services to members of the new Qualified Domestic Limited Partner programme. State Street Global Advisors also announced a joint venture with Zhongrong International Trust in 2013.
Service improvements over the past 12 months include:
- A new trade document management tool that automates the end-to-end trade documentation and completion processes for fund-of-hedge-fund managers
- Close to real-time reporting, streamlining the daily portfolio valuation process and producing reporting in less than an hour
- Enhanced performance and analytics providing time-weighted performance results from the highest level data downwards
- An interactive dashboard giving clients greater transparency into operations from trade entry to NAV calculations
- AIFM directive and Fatca reporting services, helping fund managers meet complex new requirements while freeing them to focus on their core business of generating returns.
Effectively managing data is such a key challenge for its clients that State Street launched a new business dedicated to adding value in this area. State Street Global Exchange acts as a strategic partner to asset managers, helping them gain new insights and to execute investment decisions more effectively.
The business brings together several existing capabilities, including research and advisory, portfolio performance and risk analytics, electronic trading and clearing and information and data management.
A new app called ClientView allows State Street to hold more strategic conversations with its clients, by helping them diagnose “pain points” in their organisation.
Pension Scheme of the Year - Merchant Navy Officers Pension Fund
Significant progress was made on the Merchant Navy Officers Pension Fund (MNOPF) programme to take the old section of the fund to full buy-out during 2013.
This was made possible as a result of the board of trustees adopting an innovative approach to the long-term investment strategy that aimed to take the fund to full settlement within a proportionate risk budget, without placing undue reliance on deficit funding from the sponsors.
In December 2012 the remaining liabilities of the Old Section were bought in with Rothesay Life. This was the largest transaction of its type in Europe in 2012 and was achieved seven years ahead of the target timeframe due to dynamic risk management and effective price monitoring.
Last year was spent carrying out the remaining tasks to prepare for full buy-out of the liabilities to allow the old section to be wound up. This work was carried out on time and under budget and the full buy-out and wind-up will take place over the next few months.
In common with many other long-established DB pension funds, the MNOPF faced significant challenges, with a growing proportion of retired and deferred members and a dwindling pool of sponsoring employers.
Yet by the end of 2012, the scheme was in a position not only to complete the buy-in of all the liabilities of the old section, but was able to devote 2013 to working towards the next logical step – namely the full buy-out of those liabilities and the ultimate wind-up of that section of the scheme.
This was achieved in large part due to an innovative investment strategy using a delegated CIO – Towers Watson – and the implementation of a clearly articulated journey plan within defined risk and return parameters, supported by a profound restructuring of the scheme’s governance.
The delegated CIO model, combined with tactical decision-making, enabled the old section of the fund to boost its funding level from 84% in 2008 to 105% by the end of 2012. Similar strong results are also being delivered for the new section of the scheme, but with significantly reduced risk levels.
The approach taken by the fund has been widely acknowledged by the pensions industry, with Towers Watson announcing that the delegated CIO model “set a new standard in solvency management”.
Investment Consultant of the Year - bfinance
Over the past 12 months bfinance has been retained as an adviser for a number of specialist assignments. These include the design and implementation of a direct hedge fund investment programme for a £2bn ($3.4bn) UK corporate plan to specifically enhance overall portfolio diversification, while lowering fees compared to the plan’s previous route to market.
The firm supported the client with tailored monitoring and investment and risk advice to ensure the continued appropriateness of the mandate. An advisory mandate on the secondary market sale of a large private equity portfolio of a Dutch institutional investor involved detailed analysis of the existing portfolio, cashflow projections and ultimately a credible view on the options for the client.
The firm also provided advisory on a new and developing asset class of private debt. Building on its expertise across asset classes, it provided advice on where best to invest between infrastructure, real estate and corporate private debt based on current and forward-looking assessments of market opportunities and available implementation options.
These assignments are the latest examples of an innovative approach in which bfinance incorporates factor-based modelling in order to identify beneficial manager combinations for a large GCC-based pension fund wishing to allocate $700m to smart beta.
The firm tracks the performance of its recommendations across all asset classes. In two of the most popular equities categories – the MSCI ACWI Index and the MSCI EM Index – its composites outperformed their respective benchmarks by 1.6% and 2.6% over three years. Everything bfinance does is aimed at empowering its clients to make the best portfolio choices.
Most of its senior people are former investment managers and they do not just front the pitches, they also do the hard work and deliver it to clients. The firm is employee-owned and specialises in offering advice. Because it does not manage money or sell products, it is not only unconflicted but also focused and incentivised.
Exchange of the Year - SIX Swiss Exchange
Over the past 12 months SIX Swiss Exchange has consolidated its position as a reference market in the business of trading Swiss blue-chip stocks, growing its trading turnover by 12.5% and the number of trades by 9.3%.
The number of tradable products increased by 6.3%. In 2013 SIX Swiss Exchange facilitated Cembra Money’s IPO – one of the biggest IPOs in Europe – and expanded its offering with the launch of a new trading segment, Sponsored Funds, with bank Julius Baer as the first sponsor.
By the end of last year, 305 investment funds from more than 60 issuers were admitted to trading and another sponsor – Zürcher Kantonalbank – was added. Trading in structured products was integrated into the organisation.
More than 46,000 new warrants and structured products were offered on SIX Structured Products Exchange, an increase of 2.3% on the previous year. The exchange also introduced Sponsored Access in July 2013 as an additional connectivity option, enabling trading participants or sponsoring participants to offer trading on the exchange directly to their clients or sponsored users.
This is an arrangement through which a participant of SIX Swiss Exchange facilitates submission of client orders to the exchange by permitting clients to transmit orders electronically and directly under the participant’s identification, without the orders being routed through the participant’s internal electronic trading systems.
This option has provided effective risk monitoring of trading activity as it enables orders to be checked by the risk management team.
In 2013, all trading segments were migrated to SIX’s X-stream INET platform, which simplifies interfaces and enables linking via co-location. SIX is among the first users of Target2-Securities, a single investment platform allowing cross-border securities transactions to be processed more efficiently.
Because the exchange is a self-regulated exchange which sits outside of EU jurisdiction, official procedures can be completed quickly - the listing process for companies takes just four weeks.
SIX has made an active effort to promote the Swiss financial centre to securities issuers in Switzerland and abroad, by marketing the equity segment globally and making issuing opportunities in the bond segment more flexible.
It exceeds future European requirements in areas such as active market control and safeguarding market integrity – which will be imposed by new rules relating to FMIA and Mifid II – and hosts regular workshops and roundtables with its participants and clients to educate and inform about the benefits of different products on the exchange and the latest news regarding them.