NEPC Survey Reveals Most Popular Hedge Fund Administrators, Auditors

Dec 5 2013 | 11:36am ET

Citco Fund services is the most popular hedge fund administrator among NEPC's clients, with 18% of them utilizing the firm's services, according to a newly released NEPC survey, Hedge Fund Operational Due Diligence.

The second most popular with the consultant’s clients is IFS, which is used by 13% of them, followed by BNY Mellon (9%), SEI Fund Administration (8%) and Citi Fund Administration (7%). 

Fund Aministrators Used By NEPC's Clients

  1. Citco Fund Services 18%
  2. IFS (International Fund Services) 13%
  3. BNY Mellon 9%
  4. SEI Fund Administration 8%
  5. Citi Fund Administration 7%
  6. Morgan Stanley Fund Services 4%
  7. JPMorgan Hedge Fund Services 4%
  8. SS&C Technologies 4%
  9. HedgeServ 3%
  10. GlobeOp Financial Services 2%
  • Self-Administered 2%
  • All other providers (35) 27%

Auditing Giants: PWC and Ernst & Young

As for auditors, two out of the 15 different auditing firms that are used by NEPC clients dominate the field. PWC and Ernst & Young each lay claim to 29% of the consultants’ clients. Other popular auditors include Deloitte (15%) and KPMG (12%).

Overall, 98% of the funds utilize one of the four mentioned above (PWC, Ernst & Young, Deloitte and KPMG) or five other well-known firms (Rothstein Kass, Eisner, Grant Thornton, BDO Seidman, McGladrey & Pullen).

SEC Registration Up

Other results of the NEPC survey show that 95% of firms are registered with the SEC. This figure has risen dramatically since 2010, when only 75% of NEPC’s clients were registered with the regulator.

One not so savory result is that 20% of hedge fund firms surveyed are involved in litigation. The report did not elaborate on whether the firms were the plaintiffs of the defendants, nor did it outline the types of litigation in which the hedge funds were involved.

Other results reveal that 20% of those surveyed have had a change in ownership in the past year; 24% have an affiliated broker/dealer; and 38% use a third-party marketing firm.

The 2013 survey was sent to 273 managers and 220 responded. It is sent out annually in May-June, and the responses are compiled through the summer and fall. NEPC’s clients represent approximately 650 investment programs and nearly $750 billion in plan assets.

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