BNP Paribas SS says convergence is driving fund admin

BNP Paribas SS says convergence is driving fund admin

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BNP Paribas Securities Services’ double win reflects the bank’s ability to cater to the increasingly diverse needs of asset managers and hedge funds, with innovation and scale required for a credible proposition. 

According to Philippe Ricard, head of asset and fund services, the bank’s offering rests in large part on a strong global operating model, complemented by very strong local expertise “close to regulators and close to the industry”. 

A cross-regional bridge in fund services expertise supports asset managers across the globe. With a presence in 17 fund jurisdictions, it has earned its stripes as a leading global provider, backed by the strength of one of the world’s largest banks. This, says Ricard, has enabled it to offer a one-stopshop experience, combining banking and administration in a comprehensive package. 

It offers a fully integrated platform across all fund services: global custody, depositary services, financing services, transfer agency, OTC derivatives middle office and valuation, performance and risk analytics. 

As a specialist fund administrator, it has dedicated teams of experts across private equity, real estate, debt and infrastructure for private market firms and institutional investors. It services more than 815 multi-jurisdictional fund structures across ten locations with a combined value in excess of €145bn ($163bn) as of 30 June 2015. 

The last year was notably successful. BNP Paribas Securities Services increased its assets under custody by 9% to €8trn in 2015, while increasing assets under administration by 30% to €1.8trn. This includes three million listed transactions and 100,000 non-listed transactions. 

“A number of these projects are related to large clients looking to change their model, for example adding consistency across Europe and Asia. We can take them from where they are to having a consistent model across multiple locations and instruments,” says Ricard. 

Another key aspect, says Ricard, is nimbleness and agility. This registers strongly around regulatory issues, enabling it to collate insights into regulatory intelligence for clients, from AIFMD and UCITS to AEOI. For AIFMD, it has expanded its depositary banking network to become one of the leaders in Europe. 

Growth is firmly on the agenda. Last year saw it complete the acquisition of Credit Suisse’s Prime Fund Services (PFS) business unit, which extended its existing business to fully cater to hedge funds. 

With over $240bn of assets, between hedge funds and funds-of-funds, BNP Paribas has become a serious competitor in hedge fund administration globally. It retains over 500 professionals across ten locations including the US, Europe and Asia Pacific, servicing over 926 hedge funds and fund of hedge funds. It has $162bn in assets under administration and $78bn in assets under custody. 

“The Credit Suisse acquisition was a defining moment, where we were suddenly able to reach a critical mass of assets,” says Ricard. “We’ve now made this business consistent across the globe and built a strong investment plan around it, again based on scale, reach, entrepreneurship and innovation.” 

The bank has picked up significant mandates, while developing a new digital platform for its hedge fund business. “We’ve also formulated a strong solutioning tool that will enhance our hedge fund offering, again scaling up and innovating all along the way.” 

In terms of broader fund administration, Ricard highlights regulation and the convergence of traditional and alternative managers as two areas of particular consequence. 

“Regulation remains very important, particularly the effect on the depositary bank industry around things such as AIFMD and UCITS V,” says Ricard. “The next main regulation in train now is MIFID II, which will have a profound impact on transaction costs and the way fund distribution is managed and overseen.” 

Convergence is equally important, as the Credit Suisse acquisition demonstrated. It was a key step in the development of its global fund business, placing it in a strong position to support the convergence of the two manager types. 

The trend is accelerating in a big way, extending into private equity and infrastructure, according to Ricard. “We almost can see going forward that a new space which is being redefined around multi-assets, with a mix of asset classes,” he says.

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