Jul/Aug 2009

Volume 6 No. 41
GBP 25 - UK, ROW
USD 45 - America
EUR 35 - EMEA
www.ISJ.tv

Data Profile - Centralisation

Panel - Global Custody
US pensions - New portfolios
THE GLOBAL SECURITIES SERVICES INDUSTRY MAGAZINE Irish funds - Kinetic Partners

Class Inaction

Where compensation
for UK pension
funds falls behind

Front Cover Section ISJ41.indd 1 17/07/2009 18:00

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 ISJ Investor Services Journal Heads up

P.14 Class Actions P.12 US Pensions P.14 Panel Debate P.22 Irish funds

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

P.04 News Most respondents indicated that the state of STP in derivatives has no
changed over the prior year, while 25% stated conditions for STP had
Editor’s letter improved, and 13% believed conditions had worsened.
influence regulatory decisions the effect that a prohibition on
Courtroom drama Figure 10: In the past
as he suggests? This magazine year,
class how have
action STP conditions
litigation has had for on derivatives
changed for the middle and back office processes at your organization?
would hope so. Regular readers British pension funds’ appetite
Political and regulatory will recall the leader from June’s for seeking collective claims
tension over the future of issue, outlining the initiative that How abroad,
have STPdespite
conditionsstrong research
changed in the last 12
months?: Derivatives
financial institutions has rarely these investors must take to and that highlights the hundreds of
been higher this year than over the demands they must make millions being forfeited.
Better
Editor: the last four weeks. on the services they receive, in US25% pension funds are in a
Ben Roberts
ben.roberts@2i.tv
In particular, the fall turn encouraging the greater state of portfolio upheaval. More
out from the European transparency, accountability, major schemes are rebalancing About the
Contributing editor: Commission’s draft for its new Unsure
their allocations, and though same
Anthony Harrington
and communication of banking 0% 62%
regulation of hedge funds has operations that is supposed to this has meant a flight to bonds,
Reporter: typified the traditional schism in define a brave, new world. credit and liability-driven
Kimberley Ferguson Worse
kimberley.ferguson@2i.tv philosophy for this investment Investor action is explored investing, 13%there has also been
vehicle between “Anglo-Saxon” in a different context in renewed faith in long-term
Account managers:
Tarik Rekiouak
capitalism and a continental this issue. Class actions equities as well as other distance
tarik.rekiouak@2i.tv European view dominated in the have become a global ‘plays’, such as private equity. It’s
media by the French. To clamp Source: Celent Japan STP survey
phenomenon, compensation as if pension fund managers see
Senior account manager:
Patricia De La Grange down, or not to clamp down, on a vital battleground against the light at the end of the tunnel,
trish.delagrange@2i.tv hedge and private equity funds? When asked whatbut factors werecautiously
are still limiting progress
watching in STP, respondents
past malpractice. Despite the
Lord Myners, the UK’s most commonly cited for aatrain.
lack ofRead
standards,
on, complexity of transactions
starting
Business development manager: complexity and time that class
James Olweny Financial Services Secretary and market fragmentation. page 12. From These now,
external
ISJ factors reflect the nonstan
is setting
actions can often contain,
james.olweny@2i.tv dard nature of many of the complex derivatives instruments traded in
to the Treasury, emerged as more collectives of investors its sights on Sibos in Hong Kong
the undoubted “lead plaintiff ” Japan. The internal factors most cited were data issues, as well as lac
Mark Needham are seeking payback in many - keep in contact to tell us your
mark.needham@2i.tv making the case for hedge funds of automation for some functions. For example, most firms surveyed
markets. But not the UK. This plans for this event. n
in a courtroom stuffy with rely on fully manual exceptions handling for derivatives.
Website design: issue’s cover feature assesses Ben Roberts, Editor
Peter Ainsworth public opinion. Figure 11: What are the common causes of a lack of STP for derivatives?
peter.ainsworth@2i.tv
One significant Myners
STATS-SNAP Our
Operations manager: comment was that if Common causes for the lack of straight through pro-
Sue Whittle graph illustrates Common Causes of Lack of STP: Derivatives
institutional investors can cessing in Japanese banks for derivatives SOUCE: Celent
sue.whittle@2i.tv the challenges in
make clear which regulatory the middle and Marketfr
Market agmentation
Fragmentation
Commercial director: they want applied to fund
Jon Hewson back offices in Lack of
Lack of Standards
standards
jon.hewson@2i.tv managers and which would be Japan. The market Complexity
Complexity of transactions
Transactions
costly and unnecessary, “this fragmentation
CEO: Mark Latham Suffi cient up
Insufficient stream processing
upstream data
processing/data
mark.latham@2i.tv will send a powerful message to and lack of
Infl exible Systems
Inflexible systems
policymakers”. standards may
2i Media plc Inconsistent data
Inconsistent Data
UK 16-17 Little Portland Street,
Is this a rallying cry to hint at the uneven
institutional investors? Can development for Relianceon
Rebalance oninternal
Internal manual
Manual processes
Processes
London W1W 8BP, UK
T: +44 (0) 20 7299 7700 they express a strong, cohesive complex products 0%
0% 10%
10% 2 20%
0% 30%
F: +44 (0) 20 7636 6044
viewpoint – and can they in Asia. % of Respondents
USA 410 Park Avenue, 15th Floor
New York, NY 10022 Latest mandates
T: +1 212 231 8421 Source: Celent Japan STP survey
F: +1 212 231 8121
© 2009 2i Media plc Month Winner Client Location Assignment Mandate size
All rights reserved. No part of this
publication may be reproduced, in whole
July RBC Dexia Wilson Asset Mg’mnt Sydney Custody n/a
or in part, without ..................................................................................................................................................................................
Copyright 2009 © Oliver Wyman
prior written
permission from the July BNP Paribas West LB AG. Hungary/Poland Local service provider n/a
publishers.
June BNP Paribas EMCF Portugal Settlement outsourcing n/a
ISSN 1744-151X.
June State Street PensPlan Italy Investment Services USD100 m

1-13 ISJ41 ML.indd 1 17/07/2009 12:30

 ISJ 267

Contents ISJ Investor Services Journal

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Contents
In this issue

Legal Sebastien Danloy, panel

COVER STORY member, page 14
COVER STORY 10 Class Inaction - Pension
funds
More countries around the world
are amending class action laws,
with the UK still far behind. Ben
Roberts assesses the ability and
appetite for UK pension funds to
obtain compensation.

Custody

12 Reborn in the USA - US

Pension Funds - Anthony
Harrington explores the changes
and sentiment among the US’s
biggest schemes and the impact
on their custodians. Reborn in the USA, pension funds,
page 12

14 Global Custody - Panel

Debate - Technology and
client concerns are just two areas
of global custody for this issue’s
panel to ponder.
Technology

Class Inaction 20 Data Profile - Smart Co

Pension funds, page 12 - Data Management
Ben Roberts talks to Jean-
People Baptiste Le Dantec of Smart Co
about data centralisation
04 Letters
Fund Administration

06 News and mandates John Hamrock, Kinetic Partners,

The last month of updates in
custody, clearing and settlement,
securities lending, legal and
compliance and technology.
08 News analysis -
MEMBER - periodical
publishers association
Morocco a-go-go
Plus, analysis of the repo market.
22 New rules for a world page 22
leader - Irish funds and
regulation John Hamrock
of Kinetic Partners explains
the success of the Irish funds
industry.
24 Directory of services
The company listing.

TO RENEW YOUR SUBSCRIPTION

PLEASE TELEPHONE:
+44 (0)20 7299 7700
OR VISIT... WWW.ISJ.TV
Denise Valentine, Aite Group
US pension funds, page 12

1-13 ISJ41 ML.indd 2 17/07/2009 12:30

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 Letters
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32
Dear ISJ
Asset managers are clearly
Letters
under extreme pressures to
both cut costs and defend
revenue whilst at the same time
demonstrating more effective
risk control and meeting the
challenge of more stringent
compliance requirements.
The custodians that have
invested in attribution and
risk management tools and
can make these tools available
to asset managers efficiently
and effectively will be the most
successful.
The key success factor for
asset managers is clearly the
retention of clients, even good
managers go through periods
of bad relative performance
and obviously most managers
are experiencing poor absolute
performance right now.
In such conditions asset
managers must have a clear
understanding of their own
sources of return and risk and be
able to articulate these sources
to their clients. Custodians not
able to assist their clients in this
dialogue of understanding with
the ultimate owners of capital
will suffer the same fate as the
asset manager, loss of revenue.
Carl Bacon, Chairman,
StatPro n
Dear ISJ
Improving efficiency
and driving down costs are on
the minds of most business
managers today. One way
to achieve this is through
the consolidation of similar
processes across business
areas. Historically firms would
commonly have separate
lending desks for equities and
fixed income products, each
supported by different systems.
This silo’ed approach can lead
to inefficiencies in processing,
increased risk, lack of visibility
and high costs associated with
the support of a myriad of
systems. Firms are now seeking
the benefits of consolidating
1-13 ISJ41 ML.indd 4
information and systems across
areas of their business that have
similar functional requirements.
This is simple to say, but not
easy to achieve. The utopian
picture might be to have
common processes consolidated
across the entire firm, for
example margining, asset
servicing, billing etc. The world
of securities finance, however,
still has so many variables and
nuances that are not supported
by general solutions.
Organisations that have
tried to shoe-horn securities
finance into generic systems have
commonly found this incredibly
challenging, ultimately resulting
in a service-quality reduction in
the processing of the securities
finance transactions.
A more achievable solution
is to have a specialist securities
finance platform which is
common to equity and fixed
income sides of the business. It
should offer functionality for
front, middle and back office
processing, as well as market data
analytics giving market colour
and performance measurement.
Most solutions available
today originated from either a
repo or securities borrowing
and lending background, and
therefore have their strengths in
one area or the other.
Firms now have the
opportunity to leverage a single
solution from one proven
supplier. (SunGard Apex.)
Jane Milner, product
specialist, Securities Finance,
SunGard n
Dear ISJ
The first half of 2009 has
been marked by the focus which
policymakers and legislators have
given to mitigating counterparty
risks in OTC derivative
transactions.
This is entirely
understandable given the
counterparty risk concerns that
became amplified through the
collapse of Lehman Brothers. But
it is important that counterparty
risk concerns do not remain
concentrated on the OTC
derivative markets or on the
sell-side, as the buy-side has
made it very clear that reducing
counterparty risk exposure is a
high priority for it too.
This is of particular
importance for hedge funds,
given the complexity of the
settlement process which they
are subject to.
Currently, the settlement of
hedge funds’ trades between their
executing and prime brokers
occurs as OTC transactions
without any CCP guarantee. All
parties, including the underlying
hedge funds, are exposed
to counterparty risk. The
introduction of a CCP in this
settlement chain substantially
reduces counterparty risk
between the prime and
executing brokers, and thereby
also substantially reduces the
exposure of the hedge fund to its
executing brokers.
Through Omgeo’s recently
announced partnership with
EuroCCP, these counterparty
risks can be mitigated with an
institutional trade processing
model that will route hedge
fund/prime broker equity
trades - as well as other OTC
transactions - from trade
matching through CCP netting
and onward to settlement
finality.
In the second half of this
year, when regulators and
policymakers begin to prescribe
actual solutions to address
counterparty risk concerns, they
should be cognisant of, and
leverage systems that are already
being developed by the industry,
for the industry, and for the buy-
side as well as the sell-side.
Leigh Walters
Executive Director, Global
Sales and Head of EMEA,
Omgeo n
To express your views, write to
ben@2ipartners.com or write a blog at
www.ISJ.tv
ISJ Investor Services Journal
Custody
News
LONDON - Citi’s Global
Transaction Services business
was appointed by East Capital,
the asset manager, to provide
custody, fund administration,
cash management and
transfer agency to its Special
Opportunities Fund, launched in
March. GTS was also appointed
by Chemspec International
Limited, a leading China-based
chemical manufacturer, as the
depositary bank for its NYSE-
listed American Depositary
Receipt (ADR) programme.
PARIS - BNP Paribas won the
GE Real Estate Management
France SAS mandate to provide
depobank,
custody, registrar services and
fund administration for their
OPCI funds.
In its annual Pension Survey,
Capita Hartshead found
investment strategy, employer
funding and legislation
compliance to be the top three
concerns of UK pension fund
trustees. Findings suggested
that regular meetings, training
and regular statement reviews,
in that order of importance,
would help alleviate investment
worries.
WestLB AG and the central
institution for the savings banks
in North Rhine, Westphalia and
Brandenburg, appointed BNP
Paribas Securities Services
as asset servicing provider in
Hungary and Poland.
Fund Administration
The Nomura Trust and Banking
Co. reached an agreement with
Nikko Citi Holdings Inc. and
Citigroup International LLC
to acquire all of the shares of
NikkoCiti Trust and Banking
Corporation for around 19 billion
yen. The Japanese bank is set
to move it’s London offices from
Canary Wharf to the City.
17/07/2009 12:30
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1-13 ISJ41
Caceis advML.indd
climb EN 5203x267H.indd 1 17/07/2009 12:30
5/06/09 16:38:45
 News
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32
International Fund Services
(IFS), State Street’s hedge fund
administration company, won
the mandate to provide third
party fund accounting, fund
administration, tax and risk
services to five master-feeder
fund structures at a total of USD6
billion in assets managed by New
York-based
Caxton Associates and affiliates.
KAS Bank N.V. is to acquire
Deutsche Postbank
Privat Investment
Kapitalanlagegesellschaft mbH
(PPI), the fund administration
business of Deutsche Postbank
Group, following a signed
agreement in Bonn.
Citi extended its services to hedge
funds with middle office suites to
undertake ‘complete end-to-end
servicing’ for the sector. .
AdvisorShares Trust, the actively-
managed exchange traded fund
(ETF) provider, selected BNY
Mellon Asset Servicing to service
its funds, including custody, fund
accounting, fund
administration, basket
calculation, and transfer agency
services for AdvisorShares’ multi-
manager
and single-manager strategies.
Legal
NEW YORK - Bernard Madoff, the
disgraced financier at the centre
of a USD50 billion ‘Ponzi’ scheme,
was sentenced to 150 years in jail
by a US District Court. Madoff, 71,
apologised to his victims.
International financial offshore
law firm Conyers, Dill & Pearman
has offered support for the recent
alterations to the legal framework
surrounding mergers and
acquisitions involving Cayman-
domiciled companies.
Regulation
The lack of unified action by
national watchdogs has led to
“regulatory turmoil” that may
put the UK´s Financial Services
Authority at an international
disadvantage, according to David
Little of Rule Financial, the
consultant. “The FSA has been
1-13 ISJ41 ML.indd 6
leading the regulatory world, but
the others must follow,” he said
at a securities lending conference
in Barcelona last month . “All
regulators are
trying to work out where to
impose their will, and it is difficult
for the FSA to act alone. This could
lead to unintended consequences,
such as that it might drive
business away from FSA-regulated
markets.”
Lord Myners, the UK Financial
Services Secretary to the Treasury
has demanded that the European
Commission’s controversial draft
proposals for alternative funds
have “major surgery” before it
ever comes into reality.
“The UK is not in the business
of blocking more stringent
regulation, contrary to what some
in Europe may say,” he said at an
AIMA event.
Securities Lending
The International Securities
Lending Association (ISLA)
appointed Kevin McNulty, a former
managing director at Barclays
Global Investors, as CEO from 1st
August 2009.
The Australian Securities &
Investment Commission (ASIC)
lifted the ban on the covered
shortselling of financial shares
on the 24th May, 2009. The
decision, however, will be reversed
if market conditions sufficiently
deteriorate.
SecFinex launched its central
counterparty for securities
lending to operate across the
NYSE Euronext markets of
Belgium, France, Portugal and the
Netherlands. LCH.Clearnet is the
clearing house.
LONDON -The head of European
securities lending at Deutsche
Bank believed prime brokers
will not be bypassed if a central
counterparty is introduced. Ben
Sofoluwe explained that “if a
central exchange was introduced
to the stock lending market,
hedge funds would still seek the
multiple services that a prime
broker offer rather than going to
the exchange directly”. The point
was raised at the second Global
Securities Lending Summit .
Clearing
MOSCOW - The National
Depository Centre (NDC),
Russia’s only settlement
depository servicing for all debt
and equity securities of Russian
issuers, and Vedeniye Reyestrov
Kompaniy CJSC (VRK), a
specialist registrar, adopted
an electronic data interchange
(EDI) system in their information
interactions.
The Singapore Exchange has
introduced collateralisation
of large securities settlements
and is considering revisions
to participant investment
into its Clearing Fund. The
collateralisation practice
strengthens the robustness of
SGX’s risk management framework
to weather different market
conditions.
Société Générale Securities
Services expanded its clearing
activities to include some of
the new European multi-lateral
trading facilities. The move by
the bank follows the increasing
prominence of the new trading
venues whose low trading cost
continues to claim market
share away from the traditional
exchanges.
J.P. Morgan’s GlobeClear business
now provides clearing and
settlement services for members
of the Equiduct Trading System,
owned by the Borse Berlin AG.
StreamBase Systems, Inc.
announced the release of
StreamBase 6.3, the latest version
of their award-winning Complex
Event Processing (CEP) software
platform. StreamBase 6.3
includes updates to the core CEP
platform, and marks the launch of
StreamBase’s Foreign Exchange
(FX) Aggregation Framework.
EuroCCP, the European subsidiary
of The Depository Trust &
Clearing Corporation (DTCC),
has slashed its clearing fees
from six euro cents to five euro
cents per side - the lowest fee
level charged for clearing in
Europe. This is as a result of the
increased competition in trading,
ISJ Investor Services Journal
specifically from new multi-lateral
trading facilities such as Chi-X,
and the growing demand for the
all-in cost advantage of efficient,
low-cost and robust central
counterparties.
The European Multilateral
Clearing Facility N.V selected
BNP Paribas Securities Services
for its settlement outsourcing in
Portugal. BNP Paribas’ solution
will allow underlying EMCF clients
to trade Portuguese securities on
multiple MTF platforms, and in
Portugal, BNP Paribas will act as
settlement agent for EMCF.
Technology
BATS Europe recorded its highest
average daily market share for a
month in June, handling 5% of
trading in the FTSE100, 6.19% of
the CAC40, 4.15% of the DAX30,
4.25% of the AEX and 3.32%
for all Europe.
Elsewhere BATS Global Markets,
the holding company of BATS
Trading and BATS Europe, is
to launch a US equity options
exchange - BATS Options - in early
2010.
Logica signed up 48 banks
represented by The Banks’
Association of Turkey (TBB) to use
the IT firm’s financial messaging
service.
SunGard and RBC Dexia Investor
Services have co-developed an
automated fund trading and
settlement solution to allow
customers of the technology
provider to access and trade
with around 9,000 additional
funds available in Europe on RBC
Dexia’s platform through a single
connection.
ACA Valores implemented tools
from 4sight Financial Software,
the technology provider
for custodians, brokers and
intermediaries. The bank uses
4sight Securities Finance (4SF)
for its agency lending business,
with the system providing cross
portfolio availability, collateral
management, reporting and risk
management. n
For more news, as well as features,
events and video interviews, visit
www.isj.tv
17/07/2009 12:30
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 News Analysis
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
Morocco a-go-go Repo
growth
The BNP Paribas-BMCI link up comes amid
growing interest in the North African state
Morocco is developing into a magnet
for more international business, both from
Europe and its North African peers, with a
burgeoning stockmarket.
Last month BNP Paribas signed a co-
operation agreement with BMCI Securities
Services - a Moroccan based service
provider that is more than 66% owned
by the bank - to provide the custodian’s
international clients with custody, local
clearing and global corporate trust
services.
BNP Paribas has used BMCI as its
local sub-custodian for the last five years,
explains Philippe Kerdoncuff, head of new
markets development for BNP Paribas
Securities Services. The latest tie-up is a
classic ‘local-knowledge-meets-global-
contacts’ bi-partite situation.
“In Morocco we’re servicing the
international players investing in Morocco
secutities. Of course, BMCI already has
domestic clients, but the main objective is
to service international clients – the main
custodians and some investment banks.”
He explains that a custody client would
be ‘booked’ with BMCI and supported by
a dedicated local coverage team, but the
global relationship management will be
orchestrated by BNP Paribas Securities
Services outside the country.
The Casablanca Stock Exchange’s
market capitalisation has quadrupled in
five year, he adds, and listed equities is the
key attraction for the institutional clients.
“The growth has been strong. There have
been a few IPOs in the market, the stock
exchange is growing and developing to
allow foreign companies to be listed, and
also lots of international asset managers
are investing in emerging markets
globally.”
Morocco is the fourth largest African
market after South Africa, Egypt and
Nigeria and the largest in North Africa.
Kerdoncuff has seen a few Tunisian
companies interested in a Moroccan
listing, as well as increase in the technology
spend by the Casablanca Stock Exchange,
which is under the supervision of the
Ministry of Finance and Privatisation with
its share-capital is held in equal parts by
brokerage firms. All of these factors have
1-13 ISJ41 ML.indd 8
spurred the increase in activity in the
market.
“We will continue to look at the region,
including Egypt.” n
Comms tech
Commodity traders and their back offices
will be spoiled for choice after a flurry
of software launches and upgrades for
trading and settlement systems.
Brady, a trading, risk management
and settlement solutions for metals and
commodities, after signing new deals with
Xstrata Copper as well as with a “leading
global investment bank” active on the
London Precious Metals Clearing Limite
earlier this year, is now looking to Asia
with the opening of its new Singapore
office. This has already led to a precious
metals deal with Japan’s leading trading
company. In July, the company announced
revenues of approximately 40% in the first
six months of 2009 compared to the same
period in 2008 - an increased operating
profit for the first six months of 2009
compared to the first half of 2008.
Misys extended its Confirmation
Matching Service to cover base metals
within its Metals Suite. The upgrade comes
after SWIFT expanded its MT600 series
messages to incorporate base as well as
precious metals transactions.
Then Trayport became the first OTC
broker trading system to offer electronic
submission of energy OTC trades to LCH.
Clearnet’s systems, essentially a real-time
straight through processing system - a
step forward in supporting OTC Cleared
markets.
“Trayport are proud to be the first OTC
broker trading system to offer electronic
submission of energy OTC trades to LCH.
Clearnet’s systems. Improving the OTC
Cleared model is crucial for the evolution
of the OTC European energy markets
and our integration with LCH.Clearnet
will ensure the process becomes far more
automatic,” said Dan Smith, head of
broker systems business at Trayport. n
ISJ Investor Services Journal
Is this the year of repo? Conversations in
conferences this summer about the money
markets, government bond issuances
and securities lending all seem to be
converging to indicate bond-cash lending.
ICMA found a significant dip in repo
transactions overall in March, even though
the repo trading in government bonds
increased to 84.7% from 81%. and the
market is eagerly awaiting the industry
body’s follow up survey in September.
But the central thrust for the increase
in repo transactions is the relative security
of these financing transactions away from
the money markets.
At the ISLA/RMA Securities Lending
conference in Barcelona last month David
Little of Rule Financial, the consultant,
said banks are reassessing the role of their
capital markets division in “the biggest
strategic rethink” of modern times. In this
context the repo markets gets “a strong
tick”.
David Rule, outgoing CEO of ISLA,
also on the panel, agreed that the repo
market could see strong growth. “In trying
to look at the wider regulatory changes,
it´s going to include an increase in capital
management and less leverage. If UK
banks will have to hold large gilt repo
books, bond lending will perhaps become
even bigger.”
To GSL.tv at the event, David Rule said
a key trend will involve money market
funds in Europe catching up with the US,
engaging in repo with only government
bonds.
“That’s bringing the buy-side into the
repo market and increasing the supply of
money in to the repo market, particularly
the longer maturities. That [would be]
very welcome as there has been a lack of
money available to borrow three-month.”
He credited the presentation given by
Michele Stubbe, the head of the market
operations analysis division from the
European Central Bank, who highlighted
the path in which the markets could be
weaned off central aid. “The repo market
will be key. I think the growth of a funds
sector that is actively investing in repo, and
indeed reinvestment of sec lending cash
collateral in repo, will be key.” n
17/07/2009 12:31
1-13 ISJ41 ML.indd 9 17/07/2009 12:31
 Class Actions
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32
Class Inaction
Inertia over the UK’s class action laws leaves pension funds with signifi-
cant obstacles to getting compensation, writes Ben Roberts.
Fears of another major investment bank
default have been receding for the last few
months, but the activity for investors of all
hues to disentangle themselves from some
of the beleaguered remaining institutions
has increased.
In the post mortem of the market crash
and government bailouts, more investors
are seeing yesterday’s losses as tomorrow’s
potential compensation, and the emerging
global phenomenon of class actions – a
single lawsuit made by multiple claimants
against the same entity – has seized
headlines.
A class action, otherwise known as
‘representative action’, is a lawsuit in which
a large group of investors or consumers
collectively bring a claim to a court based
on common injury over a certain time
period. In the US, one of the world leaders
for this type of litigation, class actions
are overseen by the Federal Rules of
Civil Procedure Rule 23 and 28. A suit is
typically filed with a named ‘lead plaintiff ’
or multiple plaintiffs, to represent a ‘class’.
There are two types of action, explains
Stephen Everard, managing partner at
GOAL group, a class action specialist law
firm. “You can do a class action where you
go to court, as with the US system, and
the judge decides there’s a case to answer.
Then it would follow the usual pattern
of the forensic accountants to work out
the losses suffered by investors - to see if
the company had made full disclosure,
where the share price would have been
versus where it was, using peer index, daily
inflation tables, a whole raft of factors.”
Sufficient damages and losses incurred
from the first day the company should
have disclosed through its did finally
get round to disclosing would then be
calculated.
“The alternative is that a group of
shareholders get together, normally
brought together by one of the specialist
law firms, and form a foundation and take
a direct action.”
Everard explains that a foundation
approach benefits the defendant in the
sense that the company can agree and
negotiate on a settlement. “If it goes to
court, that number is largely out of their
1-13 ISJ41 ML.indd 10
hands.”
GOAL Group conducts detailed
research to identify where a company’
share price might have been artificially
raised on the back of fraud of lack of
full company disclosure, as compared to
an index of its peer group. On page 14,
a chart displays the case of Enron, the
energy group accused of fraud in 2001 due
to years of mismanaged accounting and
insider trading.
As with defaulting banks, specific class
action cases have come to represent wider,
encapsulating issues. Where Lehman
Brothers and its collapse defined the perils
of sub-prime mortgage trading, Enron and
the lawsuit against Royal Dutch Shell, the
oil group, has summed up the ubiquitous
talk of company opacity and responsible
governance.
On 29th May, the Amsterdam Court
of Appeals approved issued a binding
declaration ordering Royal Dutch Shell
to begin payment of USD381 million to
a foundation made up of more than 150
institutional investors from 17 European
countries, plus Canada and Australia. It
includes USD352.6 million in cash paid
from Shell and an expected payment to
non-US shareholders out of a USD120
million fine Shell paid to the US Securities
and Exchange Commission.
The action against Royal Dutch
Shell relates to the company’s
misrepresentations concerning details
of its oil and gas reserves between 1999
and early 2004. All non-US investors who
bought Shell shares during this period
technically had a claim against the firm. A
leaked email from Walter van der Vijver,
then head of oil and gas exploration at the
firm, to the chairman, bemoaning the need
to lie about its reserves, sealed the case for
a class action, and a suit was filed in a US
district court.
Two years later, the oil company sought
settlement for the non-US investors, and
the scene moved to the Netherlands. The
foundation structure of the combined
claimants – which lawyers say is easier
to facilitate out of court settlements – is
slightly different to a class action. Dutch
law does not allow aggrieved individuals
10
ISJ Investor Services Journal
to petition the court for a class-wide
settlement.
Nevertheless, it was a situation whereby
institutional investors smelled blood from
a company and sought recompense.
An increasing number of countries
have been amending laws to facilitate
class actions, which have been credited
with improving the efficiency of cases
and reducing legal costs. On 1st June the
Securities and Exchange Board of India
(Sebi) decided to pledge financial aid to
collective lawsuits, leading to expectation
of more cases that seek to take advantage.
The regulator has restricted the funds
to 25 Sebi investor associations and
requires the collective claimants to prove
that each case has affected more than 1,000
investors. Further, the Sebi funding will
not exceed three-quarters of the total costs
of the case.
The decision follows an increased
awareness and culture change towards
investor compensation, a stark sign of the
times from a country that has traditionally
disincitivised such lawsuits.
Australia, too, has seen an increase
in corporate class action, spurred by
strong legislation against misleading and
deceptive conduct.
In the UK, the inability to file class
actions has produced the unorthodox
situation in which UK investors can sue a
UK company in a US court. Most recently
and pertinently this year, two pension
funds – based in Merseyside and north
Yorkshire – filed a class action against
Royal Bank of Scotland.
Like the Royal Dutch Shell, the
funds claimed the bank had withheld
information concerning the state of its
finances prior to its nationalisation by
the UK government in November 2008.
Four months previously, the bank had
undertaken a rights issue, raising GBP12
billion to shore up its balance sheet, the
first of the UK banks during that period
to do so, before accepting a GBP20 billion
rescue by the government.
Stephen Everard explains that case
meets the criteria for a US based case.
“You typically need to have a place of
business in the US, which the bank has;
17/07/2009 12:31
 ISJ Investor Services Journal
your shares need to be tradeable in the
US too,” he says. Everard adds that if the
case is successful it will have ramifications
for further lawsuits against British banks,
including Lloyds TSB and Northern
Rock, two banks part- and fully-owned
respectively by the UK government.
“Although we don’t have class action
legislation [in the UK] in cases against
Lloyds TSB, Northern Rock, you’d be
effectively be suing the government. That
would be interesting.”
The lawsuit ran parallel with another
UK pension fund seeking compensation
in the US, when the GBP1 billion
Avon Pension Fund was appointed
“lead plaintiff ” — the institution
fronting a group lawsuit on behalf of
others, including the North Yorkshire
Pension Fund — in a case against
GlaxoSmithKline, the drugs giant on
grounds of deceit and fraud.
Despite this precedent, Everard and
researchers at GOAL Group are also well
aware that the UK should not expect
a stampede of institutional investors
seeking compensation any time soon. A
recent report from the firm found that
UK local pension authorities lost out on
around GBP200 million from unclaimed
compensation between 2000 and 2007.
The report summarises that the
emphasis of class action suits has shifted
in the last two years from corporate
governance scandals such as Enron – the
US energy group whose accounting fraud
led to multi-billion dollar settlements since
its bankruptcy in 2001 – to losses related
to the sub-prime mortgage lending fallout.
Though Everard says there has been an
increase in claims overall, organising and
filing class actions among UK institutions
is still far from automatic. Inertia and
a lack of understanding have been two
critical reasons.
“There is a huge inertia, even to this
day,” he says. “We do quite a lot of work
for local government authorities, like West
Midlands, and they’ve been very vocal and
supportive to say they’ve received over
USD500,000 in compensation for their
fund. That’s a big fund, around GBP7-plus
billion. I try to work with lots of other
local authorities and they will recognise
yes, we need to do class actions, yes, we
know we should be doing more, we think
our custodian does it but we’re not sure, or
‘we’ll get round to it’. Some I’ve talked to
for about two years and they haven’t done
anything.”
However, class action lawsuits are
likely to increase as governments and
the exchanges want to be perceived as
1-13 ISJ41 ML.indd 11
Class Actions
pursuing good corporate governance: “If into the public domain that questions it
something goes wrong, they [investors should have been sold at a different price.
want to] know there is the wherewithal to That forms the basis of the class action.”
recoup losses.” He adds that domestic lawyers would be
For the UK, others agree with Everard understandably keen for UK laws to change
as to the state of inaction. David Paterson, so they could “get a piece of the pie”.
head of corporate governance at the
National Association of Pension Funds,
sees little appetite for increased litigation.
“It’s not to say they [pension funds] are
not concerned about RBS and the others,
“Class actions is
but the UK structure of governance - becoming a global
where a lot depends on an openness
between companies and shareholders - is phenomenon. If
not a particularly good one to in which to the UK government
have a litigation backdrop,” he says.
Paterson identifies additional doesn’t put it in,
problems to the pursuit of class actions
and achieving a worthwhile settlement.
it doesn’t give
Class actions often take a long time to shareholders a lot of
get to court; when they do, the period of
time in which the class action is seeking choice”
compensation may be a few years in the
past. Many things could have happened or
Stephen Everard
changed since then to affect the clarity of GOAL Group
the claim.
“In the course of the five years since the
fraud, the fund manager might have been
changed, perhaps you’ve changed your
custodian. There are quite a few things
Getting engaged?
that make it a bit more difficult to launch a A survey by the National Associa-
claim.” tion of Pension Funds found that
He adds that pension funds also face funds are becoming more active in
a crucial cost-reward decision. “You’ve their contact with their investment
got to look at the potential value to the managers and the companies in
fund. We’re talking about small amounts which they invest, though there is
of money sometimes; is it cost effective to still room to do more.
pursue the claim?” The NAPF survey found:
Everard echoes this concern, and reveals
that only around 12% of the total loss
within the class action period is typically 49% of respondents said
recovered. But there are success stories out they would be spending more time
there, and GOAL Group has helped the scrutinising investment managers on
West Midlands Pension Fund to recover engagement issues post-crisis
around USD500,000. The fund, in turn,
has been a vocal supporter of the class
action process
Pension funds must keep up to speed 44% of schemes have a direct
with the relevant bodies responsible for engagement strategy
identifying claims on their behalf. This
62%
can be a mixture of the fund’s custodian
and external law firms. Bedford Pension believed that work
Fund, for example, uses Northern Trust
priorities conflicted with a pension
and the US-based law firm Barrack, Rodos
& Bacine to monitor developments. scheme’s further engagement
Geoff Reader, head of pension fund
management at the fund, revealed to ISJ
that the organisation has 11 outstanding
cases seeking cash reimbursement.
25% believed their scheme’s
engagement had some impact on a
“Claims have been just on the back of company’s board membership. 18%
our holdings,” he says. “So a manager has
believed they had an effect on com-
bought stock X and then that’s gone down
in value - then more information comes pany strategy.
17/07/2009 12:31
 Class Actions ISJ Investor Services Journal
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Reader has reservations, however, as

to the overall benefits of increased class TheEnron
end Timeline
for Enron: GOAL Group research shows
actions, particularly during more fragile discrepancy between company price and peer index
Total Shares Sold by Insiders: 20,882,957 shares
Inside Trading Proceeds: $1,198,332,223
07/00 – 09/00
economic circumstances. “There’s only a Insiders sell
1,239,388 shares
01/01 – 03/01
Insiders sell 400

certain amount of money in the world; if 100

for $108+ million 1,136,548 shares
for $82+ million
01/00 – 03/00
you take money away from companies for Insiders sell
2,940,125 shares
class actions - which affects shareholders 90
for $208+ million 04/01 – 07/01
Insiders sell

– then personally, I’m not convinced that 80

2,807,803 shares
for $143+ million
300

ultimately it might not be the best solution 05/99 – 07/99

Insiders sell
794,934 shares
for the whole economy. So it may not be 70
for $30+ million 10/01
Insiders sell

the best thing for everybody to be doing.” 60

462,151 shares
for $6+ million

Everard at GOAL Group says: “Class 10/98 – 02/99

Insiders sell
200
2,253,958 shares
actions is becoming a global phenomenon, 50
for $67+ million

not just the US. If the UK government 40

doesn’t put it in then people will have to go 10/00 – 12/00

Insiders sell

through direct action through foundation. 30 1,650,882 shares

for $118+ million 100

If the government doesn’t allow class 20

04/00 – 05/00
Insiders sell 08/01 – 09/01
09/99 – 12/99
action legislation, then it doesn’t give the 03/99 – 04/99
Insiders sell
Insiders sell
972,588 shares
3,552,044 shares
for $266+ million
03/01 – 04/01
Insiders sell
Insiders sell
585,667 shares
465,329 shares for $24+ million
shareholders a lot of choice. There’s only 10 2,021,540 shares
for $71+ million
for $39+ million for $30+ million

one route to take, so they will try to drive a 0 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb 0
Aug
98 98‘98 Jan ‘99 Aug ‘99 Jan ‘00 Aug ‘00 Jan ‘01 Aug ‘01 Jan ‘02
direct action, a one-to-one or one-to-many
$ Per 98 98 98 99 99 99 99 99 99 99 99 99 99 99 99 00 00 00 00 00 00 00 00 00 00 00 00 01 01 01 01 01 01 01 01 01 01 01 01 02 02 Peer
Share Index

arrangement.” n Total Chronology

shares sold by insiders: 2,882,957 Inside trading proceeds: USD1,198,332,223
1998 09/99 08/00
VOD deal terminated – Blockbuster failed to provide movies.

Reborn in the USA

WEOS strong. 15-20% Erns growth. EES signing high quality
07/98 contracts. Strong Erns growth in coming years.
Strong Q2 income. EES continues to progress.
£1.4 billion of Osprey notes sold through various investment banks.
10/98
10/99
Strong Q3 income. Excellent progress on EES. Will move quickly
to complete fibre optic network. Strong Q3 99 income. EES exceeds expectations. Optimistic
about Broadband trading. EPS growth in excess of 15%.
11/98
11/99
Enron sells $250 million 6.95% notes through investment bank.
Business excellent – strong growth prospects. Stock hurt
12/98 by rumours. Enron right – future bright. Stock decline superb
High return Int’l projects – major Erns gains for years. opportunity to buy top growth name. Enron did first bandwidth
Dabhol will contribute to Erns in 99. trade – ‘Day One’ of a potentially huge Enron market.
EPS growth 15-20%.
1999 Investment bank sells $750 million Yosemite LEOs.
Investment banks sell $500 million Enron CLN.
Technology sound. Rapid growth intact. Stock sell-off overdone.
09/00 All businesses doing very well. Will hit Erns targets.
EES growth remarkable. New contracts over $2 billion. Potential to
04/01
double size of Co. Turned corner on profitability. Great collection
of large contracts. Well managed. EIN buildout on schedule. Great Q1 01 results. WEOS outstanding. EES + EBS rapidly
accelerating – each generating high levels of Erns. Very optimistic.
Full VOD rollout in 01.
Increases 01 EPS to $1.75-$1.80. 15% growth in 02. Growth
Investment banks sell $1.65 billion of Osprey notes.
sustainable for years.
10/00
05/01
Strong Q3 00 income. Very optimistic about the strong outlook.
Fundamentals improving. Enron’s fortunes have not peaked.
Merchant investments hedged. EES at breakout pace. VOD
Erns power continues to grow.
deal value $1 billion – going fine. All components in place.
EBS designed to take advantage of broadband glut. Investment bank sells € 200 million Enron CLN.
11/00 Investment bank sells $500 million Enron CLN.

US pension funds have been making some tough

01/99
Strong 98 income. Leading position in each business. Strong
balance sheet. Well managed. EES successful – contracts worth
$3.8 billion. WEOS strong. Very optimistic. 15% EPS growth.
Rumours of shortfall untrue. Business performing very well.
Investment bank sells £125 million Enron CLN.
2000 Comfortable with $1.65 EPS for 01.
06/01
01/00 12/00
Fundamentals improving. Long term Erns growth will reach 25%.
Strong 99 income. Great year. Continued strong WEOS growth, Strong growth to continue. Growth and strong Erns are reason to

decisions to adjust in difficult circumstances,

breakout performance from EES and rapid development of EBS.
02/99
EBS will drive growth – expected to accelerate. EES profitable.
Enron sells 27.6 million shares @ $31.34 through various
Momentum building. Monumental earnings potential.
investment banks.
02/00
03/99
Investment banks sell £200 million Yosemite LEOs.
buy Enron. VOD launched. Unparalleled quality of service. Solid 07/01
technical foundations. Enron will hit or beat EPS estimates. Re: possible losses in
Broadband and India – ‘All of these (questions) are bunk!’
2001
Investment banks sell $475 million and € 515 million Marlin notes.
01/01

writes Anthony Harrington.

Enron becoming ‘BlueChip’. Positioned for strong growth. Extremely
strong franchise. Dabhol to be strong contributor to Erns. Mgmt
effectively using off balance sheet non-recourse financing.
04/99
Strong Q1 99 income – shows continued strength of business. EES
added $1.7 billion in contracts. EES profitable by Q4.
Well managed. Erns power building.
05/99
03/00
World leader. EBS network unbeatable scale and scope – off
to tremendous start. EES exceeded goals. To double contract
volume in 00 to $16 billion. Profitability expanding rapidly.
04/00
Strong Q1 00. Positive momentum. Trends sustainable. Will
accelerate. Strong response to intermediation. Enron GE
Strong Q4 00 results. Breakout performance. $16 billion in EES
contracts. Outstanding year. Increasing profitability. WEOS has
significant sustainable competitive advantage. Successfully
launched VOD. Proven technology. Will increase profitability.
Increases forecasted EPS growth.
02/01
Fortune criticises accounting. Enron says sour grapes by analysts
Strong Q2 01 income – strong growth and strong profits. EES to
double profits in 01. Fundamentals excellent. No loss on Dabhol.
Will have 01/02 EPS of £1.80-$2.15. Stock will recover.
08/01
Performance never stronger; business model never more robust;
growth never more certain.
Skilling resigns. Co. never in better shape. Strongest ever.

The last year has been one that US
over 20-to-30-years to dump stock and benefit of a rebalancing exercise.”
of New Economy. who have failed to get investment banking business. No changes in outlook. Performance accelerating. Nothing to
Well managed Co. Global powerhouse. Growth to exceed Enron no black box. disclose. Numbers look good. No problems. No accounting
05/00
17% per year. issues. Enron machine in top shape. The best of the best.
Broadband market larger than estimated. Will reach $100 billion Enron sells $1.9 billion 0% convertible notes.

However, with markets still in the

Expect stock to recover.

crystalise losses. Instead, he says, fund

Enron sells $500 million 7.375% notes through various investment banks. in 03-04 with 3-4% margins. Monumental earnings potential.

fund managers are highly unlikely to

03/01
06/99 Enron sells $175 million 8.375% notes via investment bank. Business in good shape. WEOS, EBS intermediation great. Very 09/01
No other Co. offers such impressive sustainable growth. optimistic for VOD. Everything fine. EBS business predicted on Lay: ‘incredibly cheap stock’.
06/00

forget in a hurry. As recent findings from managers should be looking to rebalance

Management team capable – knows how to mitigate risk.

07/99
Strong Q2 99 income. Hitting on all cylinders. Master of risk
Enron sells $325 million 7.875% notes via investment bank.
07/00
doldrums, stock can be bought cheaper,
surplus of supply – declining prices for Enron. Balance sheet
great. Financing vehicles have ‘de minimus’ share issuance
requirements.
10/01
$1 billion writeoff; $1.2 billion shareholder equity reduction. Core
fundamentals strong. Excellent prospects. Strong EPS outlook;

their portfolios. “If you have a neutral asset and the ‘sell high, buy low’ maxim is
Strong Q2 00 income. Business booming – gaining momentum. Strong, unique business. Tremendous growth. Will continue strong

Conneticut-based consultants Greenwich

management. EES well positioned for significant Erns in 00 and EBS profits escalating. Ahead of expectations. VOD contract over liquidity fine.
Erns performance. EES had breakout year – proven concept
beyond. $200 billion of potential contracts. Outlook excellent. $1 billion. New EES contracts - $3.8 billion. Never in better shape. with profitable dealflow. $30 billion in contracts in 01. EBS model 12/01
Erns to grow 15+% per year. Very excited about future. working. Intermediation growing exponentially. VOD successful.

Associates makes clear, it is likely to allocation and one asset goes down and
08/99
Enron sells $225 million 7% notes, preferred stock through various
investment banks.
Enron/Blockbuster VOD deal: ‘Killer App’. Unparalleled
quality of service. encouraged amid rebalancing.
Enron in top tier of world’s corporations.
ENRON BANKRUPT.

be followed by several years of sharply one goes up, you rebalance your portfolio The company’s latest research, carried
reduced investment returns from major by selling the up and buying the down,”
KEY Peer Index Enron through in May 2009, involved interviews
Enron Stock Issuance Price Trigger

he says. The logic of this is that if a stock with 152 large US corporations, goa l
public
asset classes.
group
accelerating investor returns

Rodger Smith, managing director at
Greenwich Associates, says that it has been
“a terrible time” for funds. “They not only
saw their assets go down a great deal, but
it happened over a very short time frame,”
he explains. “The S&P was down 37% and
some of the other markets, particularly
emerging markets, were down 60%, so
depending on where their portfolio was,
fund managers had to deal with very
significant paper losses,” he says.
In interview-based research conducted
between July and October 2008 by the
firm, fund managers said they expected
a slow growth environment for assets for
at least the next five years. Greenwich
Associates is currently in the process of
conducting this year’s research.
Smith argues, however, that it would
be a mistake for pension funds that invest
has fallen by 50%, then it has to improve institutions, endowments and foundations,
by 100% for you to break even. “The math each with total scheme assets of over USD1
is inescapable, so you are trapped waiting billion.
for a stock to outperform massively, just in Findings released to ISJ show that more
order to get back to where you were.” than half of large US funds (51%) have
However, if you rebalance the assets, so reviewed or changed their investment
that you have the same amount of money policy as a result of the global meltdown
invested in the stock at 50 of its value% as and 51% plan further changes in the
you did at 100%, then the stock only has coming years. “In a nutshell, what we are
to improve 50% to make you whole again. seeing is institutional funds reacting to
This is why rebalancing is such a powerful the financial crisis mainly by reducing risk
strategy. Smith estimates that around three exposure and cost, and by reviewing their
quarters of the funds that Greenwich has investment policy,” Smith says.
spoken to have rebalanced their portfolios Some 47% of funds said that they
over the last 12 months. had reduced their securities lending
Rebalancing is not a simple exercise, programmes through 2008 and the first
however. “The real problem you face as a quarter of 2009, while another 19% said
fund manager in a falling market is that that they planned to make reductions in
even as you are rebalancing, the stock value future.
keeps falling,” Smith explains. “You have to Greenwich Associates found support
get a market rebound in order to get the for the idea that funds are investing into

12

1-13 ISJ41 ML.indd 12 17/07/2009 12:31

 ISJ Investor Services Journal
either opportunistic funds or alternative
assets to generate outperformance. Some
36% of managers interviewed said that
they planned to invest in opportunistic
funds, while 23% said that they already
have made the reallocation.
Some 21% of managers said that
they had already moved to more passive
mandates, while a further 19% expected
to do so through the coming year – an
illustration of the drive to de-risk and
reduce the scope of active management.
More US funds have been moving
out of international equity, with 31% of
funds saying they are either decreasing or
substantially decreasing their exposure
to international equities. However, it is a
mixed the picture is somewhat complex,
with the drive for alpha pushing some
funds back into emerging markets. For
example, 21% say they plan to increase
their exposure to international equities.
In an era of ultra low interest rates,
so the recent boom in liability driven
investing (LDI) – apart from exceptions
such as J.C. Penney’s defined benefit
scheme - has been punted into the long
grass. Instead, Smith says, funds strive
to cap their liabilities as best they can. In
some instances, this means closing the
defined benefit plan altogether.
“For salaried employees this is a fairly
easy thing for US corporates to do. But
we are also seeing reductions in employer
contributions to defined contribution
schemes,” he says.
Denise Valentine, senior analyst at Aite
Group, says that it has been clear for years
that a significant percentage of S&P 500
companies had underfunded final salary
pension schemes. Now with the 30% to
40% falls in asset values, these schemes
have lots of company, she says.
A particularly depressing factor, she
says, is that both risky and cautious
strategies got thumped by the downturn.
“There are actually very few real options
for schemes in the current economic
environment. You can either cut benefits
to limit liability or you can get involved
in different kinds of investment to try to
generate outperformance,” she says.
There is some evidence that the flow
of funds from institutions to hedge funds
picked up sharply in May. However,
Valentine urges caution in turning one
month’s figures into a trend. “What we
could be seeing are schemes who made this
asset allocation decision up to a year ago,
then held back on it in the face of growing
market uncertainty. Now that things look
as if they could be picking up again, they
could be reactivating this earlier decision.
1-13 ISJ41 ML.indd 13
We need figures for a few more months
before we can say that pension funds are
definitely moving back into hedge funds,”
she says.
Valentine points out that pension funds
tend not to move quickly when it comes to
reallocating assets. “There is a long process
of analysis, and a whole round of dog and
pony shows with fund managers.
“Then the data that comes back is
analysed in depth. Trustees make a short
list of possible hedge fund or private equity
fund managers they might want to invest
with, and they invite the managers back
again for further discussions. Nothing
happens quickly,” she says. CalPERS is an
example: it recently completed its asset
allocation review that lasted a few months,
in which it reassessed its allocation to
alternatives among other assets along the
lines of liquidity.
Valentine points out that private equity
has long been a popular asset class with
US pension funds - more so, in fact than
hedge funds. “Pension fund trustees and
managers understand that private equity is
a long play, and they can wait ten years for
their returns. However, the private equity
market has really plummeted and people
are desperate to get the market back into a
growth cycle,” she comments.
Sarah Angus, private equity analyst
with global custody and securities lending
consultants Callan Associates, says that a
number of Callan’s pension fund clients
today have very significant sums of
uncommitted capital placed with property
fund managers. “Typical allocations we
are seeing being allocated to private equity
from large funds are between eight and ten
percent. Though some funds are going as
high as 15%,” she comments.
According to Snyder, fund managers
believe there is value to be found in private
equity, if you can sit tight for the long
term. “There are still a number of players
waiting for the proverbial bottom of the
market. Transaction volumes in private
equity are still very depressed and have
been for the last six to nine months.”
Angus points out that there are
hundreds of billions of dollars in
commercial property mortgages coming
due for refinancing in the next few years.
“Not all of these properties will have issues,
but a good portion of them will and that
will create real opportunities for investors,”
she says.
In the last year a number of funds
have paused to re-evaluate their securities
lending programmes.
The California State Teachers
Retirement System (CalSTRS), the
13
Pension Funds
USD179.9 billion California Public
Employees’ Retirement System (CalPERS)
and the New York State Common
Retirement Fund, all opted to withdraw
financial stocks from securities lending.
The trustee view was that if securities
lending was assisting short selling, and if
short selling was unduly driving down the
price of financial stocks being held by the
funds, then the funds were not acting in
their own best interests and the fees gained
could not cover the costs
However, Laurie Zeppieri, head of
securities Finance Product Management
for the Americas at Citibank, says based
on a number of academic studies, most
regulators now realise that short selling
has a number of beneficial impacts on
the market. “It helps price discovery, and
there is now a growing body of evidence
that during the short selling ban, markets
became more illiquid and were subject to
the same or more volatility,” she says.
Zeppieri says that there is now a great
deal that agent lenders can do to add
value for clients as they prepare to move
back into securities lending. “It was only
natural that some funds should pause and
take time to both re-evaluate the objectives
of their securities lending programmes and
to get buy-in from their Boards for those
objectives,” she says.
Zeppieri adds that the bank is having
a number of conversations with new
prospects who want to commence
securities lending. One of the issues for
beneficial borrowers, she says, involves
pooled funds. With cash collateral being
the preferred collateral type, lenders
found that some cash pools had invested
poorly, basically jeopardising the lender’s
collateral. In the light of this, a demand has
built up for segregated accounts. Citi has
long run an open architecture approach
where clients can choose to have their own
segregated accounts.
Further, funds re-entering the securities
lending market want a new approach on
counterparty risk and recall risk. There is
much the agent lender can do to help track
the risk and to provide risk mitigation,
particularly when the agent lender has the
global scale that Citi does, she says.
Aite’s Valentine says US pension funds
will predominantly stay with the straight
and narrow. “They are going to be sticking
much closer to what they know and
understand best. If they have had success
in a particular area, they will return to
it. Alternative investment managers are
going to have to explain their strategies
in great detail and provide a high level of
transparency,” she concludes. n
17/07/2009 12:31
 Panel Debate
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
Panel: Global Custody
Steve Smit is Senior
Managing Director, Head
of Global Markets Europe
and Investor Services
UKMEA at State Street.
1. Linking with local banks
has become a well-recognised
tactic for custodians to enter
new markets, particularly
emerging markets. Have your
plans for such expansion and
collaboration changed over the
last year?
SMIT: Our approach varies by
market, but in the Middle East
and Eastern Europe — two
markets where we see significant
growth potential — we are
establishing local operations
centres to signify our long-term
commitment to these regions.
We opened an office in Doha,
Qatar, last August to expand our
operations in the Middle East,
where we have had a presence in
Dubai since 1993.
The region is an area of
increasing opportunity,
particularly given its prominence
with sovereign wealth funds. The
Doha office focuses on our Global
Markets and Investor Services
businesses, with an emphasis on
sovereign wealth, central banks
and emerging asset management
companies. In addition to Qatar
itself, the office provides a
base for us to target markets
including Saudi Arabia, Kuwait,
Bahrain, Oman and the United
Arab Emirates.
In Eastern Europe, we are
looking to increase our presence
in the region as the financial
infrastructure in markets such as
Poland continues to mature.
14-21 ISJ41.indd 14
Nadine Chakar, Executive
Vice President and Head
of Europe, Middle East
& Africa (EMEA) at BNY
Mellon Asset Servicing
CHAKAR: Strategic growth
in Europe, the Middle East
and Asia-Pacific has always
been and remains part of our
plans since we decided to put
our two companies together
back in 2007, and the market
conditions over the past
year – which have left many
companies in a more precarious
position and forced even the
stronger players reassess what
activities they can really view
as core going forward – means
that there are unquestionably
interesting opportunities out
there. And, given we have come
out the other side of the crisis
as a strong, liquid and well-
capitalised organisation, one
that is today has the highest
credit ratings of any US bank,
we are extremely well positioned
to make the most of those
opportunities.
The big question, as always, is
whether any potential takeover
target is a good fit. That was
certainly the key criteria for our
own merger, and as I said, our
performance through the crisis
has certainly vindicated that
approach. We’ve seen a number
of would-be ‘bargains’ snapped
up in the past couple of years,
but the asset servicing business
is not merely about accumulating
assets – the quality or value of
any book of business comes down
to the interaction of various
criteria: the mix of clients, the
economics of servicing them, the
New markets, client
relations and technol-
ogy are just three of
the subjects pondered
by this month’s panel
on global custody.
Sebastien Danloy is
global head of custody
sales and relationship
management at SGSS.
opportunities for cross-selling
and , yes, whether there is a
clear ‘fit’ – both intellectually
and commercially – with our own
business model
DANLOY: A year ago the plan
was to leverage the presence
that the Societe Generale group
has on a global basis and in
emerging markets. The objective
was to leverage the fact that we
own quite a lot of subsidiaries
across CEE and North Africa,
and leverage the local presence
and coordinate the product
development and sales approach
to custody services provided
by these entities, knowing that
all these banks we acquired
all have some custody services
available, mostly sold to local
players and not to international
players. That’s why, if you
look at Morocco or Croatia or
Czech, we are the best known
custody provider for domestic
institutions, so in those markets
we are the number one provider
for local players.
So the aim was to have all these
entities regrouped under the
supervision of SGSS so we can
do two things: one, upgrade
service levels in line with the
expectations of international
players; and two, to actively
promote these services to
institutional investors and
intermediaries outside the local
markets.
14
ISJ Investor Services Journal
2. Do you have plans to enter
new markets in the near
future?
SMIT: We see the Middle East
and Eastern Europe as regions
with enormous potential. While
our presence in both regions
is not new, we have recently
expanded our operations there
to capitalise on the growing
business opportunities. China
is another region of huge
opportunity, with its increased
cross-border flows and growing
pensions and insurance markets.
Again, our presence in China
is not new — State Street has
operated in Hong Kong for
more than 25 years and we have
been actively involved in the
Chinese financial landscape
since 1997, working with many
of the country’s leading financial
institutions.
CHAKAR: Well, we currently
service clients in 77 markets
worldwide, so we already cover a
lot of ground. That said, we are
always looking at opportunities
to extend our global reach and
local servicing capabilities,
whether that is via organic
growth or alternatively through
joint ventures or full-blown
acquisitions. But, as already
noted, we’d only move forward
if everything adds up to our
satisfaction.
DANLOY: After the number of
countries we’ve incorporated in
the emerging markets, I think we
need some time to ‘absorb’ these
countries. Not all the markets
in which Societe Generale is
present are part of this new
concept, but we’ve started with
a group of around 10 countries
and we know there are some
17/07/2009 18:02
14-21 ISJ41.indd 15 17/07/2009 18:02
 Panel Debate ISJ |ISJ Investor
Investor Services
Services Journal
Journal
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48

countries we’ve excluded from our analytical and reporting administration now outsourcing. and experience in delivering
this approach - that will come solutions, and indeed we have That’s valid for hedge funds complex, multi-jurisdictional
as a second step. We wanted to enhanced our offerings around managers but also traditional solutions and our focus on a
focus on the countries with the core performance measurement, asset managers – they realise globally integrated approach
largest potential and in which historic risk reporting and asset now the activity is non-core across all in-scope sites.
we had sufficient expertise in liability matching information and there is more scrutiny from The recent flu pandemic
custody services and where we – specifically, FAS 157 reporting the regulators on this service has further highlighted the
had a client base domestically. and our Trustee Board Reporting and therefore are already importance of contingency
solution for UK and European questioning the long term future planning — another priority
3. Many people have cited the pension plans. Independent of the company and we can for customers. At State Street,
increase in what institutional valuation for OTC derivatives is see a lot o outsourcing deals we have a comprehensive
investors are asking of their another key area. happening. business continuity programme
asset managers, such as We’ve revamped Workbench, The second thing is the in place throughout our global
independent administration, our information delivery expectations from your third operations.
and enhanced client reporting. platform so that clients now party administrator. Until
Have you experienced such have access to enhanced recently, it was not unusual for CHAKAR: Certainly, more robust
changes and how are your online reporting, analytical the third party administrator risk management is a clear
conversations with custodial and monitoring services via when it had to value an priority for regulators worldwide.
clients different to a year ago? a single portal. The focus on instrument that was illiquid – an But capital preservation and
fuller disclosure and exposures OTC for example – to ask the risk mitigation have always been
SMIT: For our customers and will also be felt in areas like fund manager for a price, or at the foundations of what we do,
their clients, risk is firmly top of collateral management and best ask the fund manager for a so in that respect it is business
the agenda. hedge fund administration, market maker who might give a as usual from our perspective in
They want greater assurances where we would expect to see an price. recent months – if admittedly a
about the security and integrity upsurge in outsourcing. Likewise Sometimes the market maker little more intense than usual.
of their assets, and enhanced, around transfer agency, where would give one valuation – but We continue to look to educate
independent reporting — hence we are seeing a lot of activity as is it accurate? I think a lot of clients about the various
the trend for asset managers to asset managers recognise the administrators didn’t really risks – be they operational,
transfer responsibility for a wide harsh realities and are finally know. Today, there’s no doubt counterparty or systemic – and
range of investment operations throwing in the towel – there in my mind that the clients provide them with the tools and
to independent third-party are fewer and fewer people who we have are expecting us to expertise they need in order to
providers. are continuing with in-house independently value all these address them. I’d add that it
The separation of investment administration in this space. instruments and be capable works both ways: firms will be
management and pricing can On a final note, there has of valuation. It’s one area of expected to carry our intensive
lead to greater comfort for unquestionably been a persistent business where we can see a lot due diligence on their service
investors. In addition, the value downward pressure on fees in of clients coming in, in the area providers, custodian banks
proposition can be significant recent years. That has only been of OTC and structured product included, and that will lead to
— asset managers can benefit exacerbated as asset values have pricing. greater scrutiny of providers’
from the economies of scale fallen, but at the same time we financials and on the back of that
achieved by their investment are starting to see a new realism 4. In a recent market survey an acceleration in the flight to
service providers. Throughout on the part of some clients by Investor Services Journal, strength that has been gathering
the investment lifecycle, asset that you get what you pay for. custodian respondents pace for some time now.
managers are considering Certainly, from our point of view, said their clients’ highest
the outsourcing option more we cannot allow our margins to priority was to understand DANLOY: Operation risk is one
seriously then ever. In the be eroded indefinitely, because and gain assurance about the thing, but counterparty risk is
middle office in particular — that will only damage our ability operational risk. How can this also important. When you’re a
one area where we are seeing to make the very significant best be communicated? customer of a provider I think
particular interest — they stand reinvestment, literally hundreds the first thing that’s important
to realise significant advantages. of millions of dollars, that is SMIT: Generally, customers are to know is: ‘what is the provider
Over the past year, our required if we are to ensure placing a renewed focus on due ready to accept in terms of
conversations with customers we are at the top of our game diligence — and that extends responsibility and liabilities
have focused on how we can in respect of technology and to their dealings with their when it comes to these things?’
support them through the new intellectual capital. investment service providers. By counterparty risk I refer
pressures that a new financial They are interested in visiting to the fact that the custodian
landscape creates, whether DANLOY: There’s been a shift in our offices in person and gaining safe-keeps your assets but that
those pressures are coming from terms of the expectations from a better understanding of custodian may be using third
their investors or increasingly our client base and from their the infrastructure behind the party agents across quite a
demanding regulation. clients. Independent valuation is servicing of their funds. And, number of countries to safe-keep
important, and if you’re a hedge at the bid stage, customers are these assets in the local markets.
CHAKAR: Perhaps unsurprisingly fund manager and do your own asking more questions about The question is: what is a global
given the crisis, transparency in-house administration, there risk. They want to understand in custodian ready to accept in case
and risk now well and truly may be a lack of transparency greater detail our approach to of failure or insolvency of one of
cemented at the top of their list that your investors might not risk throughout the lifetime of its agents or sub-custodians?
of priorities. We fully expect to necessarily like. We see people our relationship with them. It’s not a crystal clear answer
see ever stronger demand for who had provided their own We emphasise our expertise and institutions are not always

16

14-21 ISJ41.indd 16 17/07/2009 18:02

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07-07-2009 17:17:47
 Panel Debate
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
taking the same level of risk.
Also, the institutions that have
their own in-house agents might
be at an advantage to those who
only use third parties. If I use
Societe Generale as my agent in
30 markets around the world, I
have reduced my risk in these 30
markets.
So you have some global
custodians who also operate
locally, but the ones that don’t
do sub custody have to bear their
own level of risk.
5. The same survey found that
there has been an increase in
the number of institutional
investors who seek to
‘unbundle’ the custody service
they receive. How do you assess
the opposite attractions of
being a ‘one-stop-shop’ with
the perceived greater clarity for
investors who seek different
specialisms from different
service providers?
SMIT: Where custodians
once focused solely on their
traditional role of safekeeping,
they increasingly offer a wide
range of sophisticated, add-on
services, such as risk analysis,
transfer agency and securities
lending — to name but a few.
In recognition of our growing
remit, we label ourselves
‘investment services providers’
or ‘global services providers’.
This trend has been driven by our
customers’ needs — they want
to treat us as a one-stop shop
where they can buy integrated
solutions that incorporate
services across the investment
lifecycle.
The potential benefits of
integrated solutions are
significant, not least in terms
of data integrity. Data requires
inputting only once and can
be deployed across multiple
systems, facilitating greater
straight-through processing
and reducing operational risk.
This approach also enables
consistent reporting as you have
a consolidated view of activity.
In today’s environment , where
the focus is on risk and cost,
integrated solutions represent a
compelling proposition. But as
an investment service provider,
you need to be good at every
14-21 ISJ41.indd 18
element if you are to offer a
credible, bundled solution.
CHAKAR: It’s a classic ‘horses
for courses’ scenario. For
some larger clients, especially
the multinationals there are
very appreciable benefits to
consolidating down to one
provider that offers a bundled
solution spanning multiple
markets and regulatory
environments.
In particular, a bundled
approach provides them with
a consistent and harmonised
level of service and information
delivery via one standard
interface. That has a real
upside for them in terms of
transparency, efficiency and risk
mitigation. On the other hand,
some institutional investors
still prefer to cherry-pick the
‘best of breed’ in different
areas. That may better fit their
own risk profile, in that they
may be required to use multiple
providers to spread any risk
across a number or providers.
The trick is to be able to be
flexible enough to service both
constituencies, and to so that
your offering needs to be at once
scaleable and modular.
DANLOY: There are various
trends in the market, and these
two trends are conflicting, and
it’s hard to say: ‘this is the way
people operate’. You have large
players that tend to unbundle,
and have the scale and size to
justify doing so. They do this
because they can then appoint
whoever they believe is the best
provider for every single part
of the services they require.
So, one will be custodian,
one transfer agent, one the
securities lending agent, one
collateral manager. They can
do it with sufficient size and
internal resources.
For small and medium sized
players, I think they still go for
the bundled approach because
it’s easier for them, to manage
one relationship and the value
they take from one relationship
is more than enough for them,
and the benefits they might
derive from using various
providers will not be enough
to upset the fact that they
18
would have to manage various
relationships.
6. 2009 has seen significant
activity in the development
of technology in almost all
aspects of the capital markets
and asset management. What
is the number one area of
technology that a custodian
this year will have to invest in
or enhance?
SMIT: Keeping pace with the
increasingly complex servicing
demands of customers is
essential. One area where the
need is particularly urgent is OTC
derivatives, which have become
an increasingly important
component of any investment
strategy. They enable investment
managers to avoid certain risks
while enjoying more consistent
returns, providing a measure
of capital protection. While the
industry foresees enormous
growth in the overall volume
of derivatives transactions,
the financial crisis has focused
people’s attention on the pricing
and administration of these
transactions. The technology
platforms in use today were
mostly designed for traditional
investment products, such as
equities and bonds. As the use
of OTC derivatives expands, the
need to confirm transactions
with great accuracy and speed
will grow.
In addition, derivatives
trades now involve collateral
arrangements that supporting
platforms must be equipped
to manage. These challenges
underline the need for third-
party administrators to make
the strategic investment that
will enable them to offer expert
capability and capacity. This has
certainly been an area of focus
for State Street.
CHAKAR: Broadly speaking,
analytical and monitoring
tools. As already noted, in
2009 all roads lead to greater
transparency. More than
ever clients need real-time
access to portfolio exposures
across multiple asset classes,
investment structures and
regions. As the people who
oversee the industry’s plumbing,
ISJ |ISJ Investor
Investor Services
Services Journal
Journal
TS
through which vast amounts
Su
c
Ti
of global data flow day in
and day out, we are uniquely
positioned to transform
that raw information into
the market intelligence that
allows our clients to sidestep
potential pitfalls and seize
the opportunities when they
arise to continue to grow their
1
businesses.
More specifically, we are focusing
our energies on derivatives, in
particular on risk mitigation and
risk reduction products in both
the exchange traded derivatives
and OTC derivative spaces
DANLOY: For me the area where
all the custodian community
needs to improve is risk
mitigation. There are two angles:
the customers’ assets - risk
monitoring the overall exposure
- and the counterparty risk, ie,
how you effectively mitigate
the risk you have with various
counterparts.
I mentioned the sub
custodians, but also if you look
at securities lending, what
is the risk you have with the
borrowers? Lehman Brothers
was a very active borrower in
the securities lending market.
This includes counterparties to
trades that have been executed
by clients but that you need to
settle afterwards. If there’s one
area that we need to improve
is monitoring the risk of the
counterparties your clients are
using across the various products
and services you deliver.
Further, we’ve been very
good at assessing end-of-day
positions, but I think intra-day
monitoring is an area in which
custodians need to improve our
systems need to evolve.
7. The hedge funds sector is
stabilising - more money is
flowing into this industry and
there is now a blurring line
between ‘alternative’ and
‘mainstream’ funds and their
services. Is this a significant
area of growth for you as a
custodian?
SMIT: We see enormous
opportunities in the hedge fund
sector. Despite the battering
that many funds have taken as
17/07/2009 18:02 TSAM N
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Streamlining buy-side operations and technology from front, middle to back office

15thæS eptemberæ2009,æHya ttæR egencyæJe rseyæCit yææ æ æwww .tsam.us

TSAMæ willæ bringæ togetheræ theæ mostæ senioræ innovatorsæ toæ
addressæ theæ industryÍ sæ fundamentalæ issuesæ throughæ front,æ Advisoryæ Panel
middle and back office. During the annual convention, due to
takeæ placeæ thisæ Septemberæ inæ Newæ York,æ attendeesæ willæ haveæ æ Derekæ Stein
Stein,æ
theæ choiceæ ofæ overæ 40æ presentationsæ takingæ placeæ duringæ 4æ nicheæ æ Chief Information Officer, æ æ
streams. All in one day! æ Barclaysæ Globalæ Investors

Theæ programmeæ isæ dividedæ intoæ

youæ theæ choiceæ of:
4 æ streams,æ offeringæ Seanæ Kelley,æ Managingæ Director,æ æ æ
Globalæ Head,æ Technologyæ Andæ æ æ æ
Operations,æ Deutscheæ Assetæ æ æ æ
Tacticalæ ITæ Governanceæ Management
Thisæ streamæ presentsæ anæ exclusiveæ opportunityæ designedæ toæ addressæ theæ
buy-side operational challenges that technology presents. The program
drawsæ togetheræ theæ sometimesæ opposingæ needsæ ofæ operationsæ andæ IT,æ andæ æ Peteræ Noll,æ Chiefæ Technologyæ æ æ
usesæ caseæ studies,æ presentationsæ andæ interactiveæ sessionsæ toæ allowæ youæ toæ cer,æ Pioneeræ Investments
Officer,
benchmarkæ youræ ownæ ITæ operatingæ modelæ toæ identifyæ whereæ investmentæ addsæ
value to your bottom line and enhances business processes. Attendees will
beæ CXO,æ VPæ andæ director-levelæ andæ areæ responsibleæ foræ settingæ theæ technologyæ ææ Jamesæ Mazarakis
Mazarakis,æ Formeræ
strategy for their company. Key to discussions on the day will be SOA-based Chief Technology Officer,æ
architectures,æ highæ performanceæ architectures,æ capacityæ enhancementæ andæ ææ T.æ Roweæ Priceæ Associates
futureæ scalability,æ ITæ andæ businessæ processæ outsourcing,æ riskæ managementæ
and talent attraction and retention.
æ Michaelæ Cloherty
Cloherty,æ Deputy
Dataæ Stewardshipæ Modelsæ &æ Techniquesæ cer,æ æ
Chief Operating Officer æ
Fundamental across the entire investment process, effective Data
Managementæ willæ beæ aæ keyæ componentæ ofæ triumphæ foræ investmentæ
æ Generalæ Motorsæ Assetæ æ æ
managementæ companiesæ whoæ areæ ableæ toæ design,æ implementæ andæ leverageæ æ Management
their data. This stream is, therefore, business critical for practitioners
whoæ wantæ toæ establishæ oræ maintainæ theiræ positionæ ofæ excellenceæ inæ dataæ Martinæ Korn,æ Senioræ Vice
management.
President,æ Chiefæ Informationæ æ æ æ
Performanceæ Measurementæ &æ Attribution Officer, OppenheimerFunds
Withæ theæ recessionæ havingæ hitæ theæ entireæ economyæ atæ aæ globalæ scale,æ moreæ
thanæ everæ beforeæ institutionalæ investorsæ needæ toæ understandæ whereæ theiræ
investment strategies have succeeded and where they have fallen short. æ Georgeæ Batejan,æ Senioræ Viceæ
Performanceæ measurementæ andæ attributionæ departmentsæ areæ confrontedæ withæ æ President,æ Chiefæ Information
unprecedentedæ pressureæ toæ provideæ consistentæ andæ accurateæ performanceæ Officer, Evergreenæ Investments
and attribution information in less time at an increasingly global scale.
Furthermore,æ whileæ tryingæ toæ retainæ clientsæ onæ theæ oneæ side,æ performanceæ
departments,æ onæ theæ otheræ side,æ areæ seeingæ themselvesæ increasinglyæ Toddæ Juillerat,æ Managingæ
challenged by recruitment and retention of talent in their departments. Director,æ Head,æ Performanceæ
Measurement,æ Stateæ Streetæ
Clientæ Reportingæ
Caseæ studiesæ fromæ buy-sideæ practitionersæ whoæ areæ strikingæ aæ balanceæ Globalæ Advisors
between superiority of reports and efficiency and are re-evaluating
andæ redesigningæ approachesæ toæ clientæ reportingæ andæ theæ technologyæ Alanæ Goldstein,æ Chief Information Officer,æ
involved. You will hear about strategic reporting initiatives utilizing
scarce resources by enhancing operational efficiencies, data accuracy BNYæ Mellonæ Assetæ Management
andæ quality;æ howæ toæ meetæ clientsÍ æ increasinglyæ complexæ andæ moreæ adæ
hoc demands with a reduced headcount; how to organize and motivate Rickæ Eng,æ Chief Operating Officer,æ
employees during difficult times to meet increased client demands for more
complexæ customæ reportingæ asæ wellæ asæ innovativeæ reportæ delivery:æ fromæ face- Leggæ Masonæ Capitalæ Management
to-faceæ withæ aæ hardæ copyæ toæ webæ andæ videoæ messagingæ toæ nameæ butæ aæ fewæ
specialist case study topics.

14-21
TSAM ISJ41.indd 19 .indd 1
NA Ad 203x267 17/07/2009 18:02
13/7/09 14:07:20
 Technology
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
a result of the market turmoil,
there are signs that the industry
has started to regain confidence.
Hedge funds are adjusting
to what will undoubtedly be
a fundamentally different
environment.
Firstly, their investors are
likely to demand independent
custody and administration of
their investments. Although
many large hedge funds will be
understandably reluctant to
walk away from their substantial
investment in internal
administration, they will find
it increasingly difficult to say
‘no’ to clients’ demands for the
increased assurance that comes
of independent pricing and
administration.
To meet investors’ need for
information, support and clarity,
hedge funds are already asking
administrators with experience
in all asset types and investment
strategies to provide a complex
and expanding list of services.
Further, the financial crisis has
driven hedge funds to start
using traditional custody banks
and increase their use of third-
party custody arrangements that
allow collateral to be held away
from counterparties — a reaction
to the collapse of critical
financial institutions in autumn
2008.
CHAKAR: I’d suggest it is overly
simplistic to suggest that
custodians should or could
simply disintermediate the prime
brokers. There have capabilities
– notably around capital
introduction, electronic trading
platforms that provide front-end
trading and order-routing, and
cross-margining across multiple
asset classes and products – we
do not possess as a custodian.
My view is that continued
co-existence will be the way
forward. What we have done is
to extend our capabilities to
ensure we can work much more
efficiently and effectively with
the prime brokers to the benefit
of the end client.
For instance, post-execution
we provide a truly end-to-end
service for alternatives, which
means the client only need
touch the trade once. We deliver
back office services, we instruct
14-21 ISJ41.indd 20
ourselves as custodian, we value
the trade independently and also
provide performance, all off the
same platform.
We are also helping them ‘slice
and dice’ data to ensure they
have the information and market
intelligence they need from a
reporting and risk management
perspective. It is a fully
integrated solution, and as such
much more efficient solution in
respect of cash and collateral
management.
But to address the other part
of your question, we certainly
do continue to see – and service
– demand from increasingly
sophisticated long side
investors, our traditional client
base, for short exposure through
long/short strategies, 130/30
and 120/20 funds and the like.
I have no doubt that will only
become a bigger part of what we
do going forward.
DANLOY: The hedge fund
industry had a tough time and
has recovered well, even if you
look at the performance of the
industry as a whole it might be
one of the best years ever.
But with the AIFM (EU)
Directive still be discussed, and
with some of the constraints
that might be placed on these
fund managers, I can’t tell you
today whether the way forward
for the hedge fund industry is
rosy of not. It will depend on the
discussions at EU level. The UK
doesn’t necessarily think they
same way as alternative funds
as the French. So I will be keen
to see the consensus. Clearly
some of the directions taken in
the initial draft might have a
major impact on the hedge find
industry.
If the AIFM proposals confirm
that a hedge fund needs to have
a provider based in Europe,
even if domiciled elsewhere, I
think a lot of these institutions
in offshore centres will find
it difficult to provide going
forward.
I would say the hedge fund
world has never been one in
which SGSS has wanted to
develop its business. We service
hedge funds but it’s not the
main focus in terms of business
development for us. n
20
Data profile:
SmartCo
Jean-Baptiste Le Dantec at
SmartCo, a leading software
company for the middle and
back office, says the concerns
of current and prospective
clients regarding the tools for
data management is two-fold.
“Firstly, how to generate
savings – [this is] due to the
contraints and the uncertainty
in the market. The second
thing is how to be ready to
increase the size of activity.
They anticipate concentrations
- that means anticipating the
ability to acquire some other
company or to be merged with
other company.”
The company’s flagship
product, Smart Financial
Data Hub is an overall
solution bought by asset
managers, custodians and
other investor services firms,
and covers repositories for
securities, third-parties,
indices and benchmarks,
funds and mandates, as well as
operational data.
One significant challenge
is the disparate nature of data
in financial institutions. There
is often a mosaic of different
systems and data feeds that
have accumulated over time,
have different uses and present
information in their own way.
These innumerable variables
can hinder efficiency, as well as
the ability to merge systems.
The answer, says Le Dantec,
is to find a way to centralise
the data. “They need to
centralise the information as
it will be easier for them to
merge with an information
system of another activity.
That will also handle a strong
increase in terms of the
value of data they manage. It
needs to be managed in one
central department across
geographical locations.”
He adds that there are
differences between asset
managers and custodians
C
ISJ | ISJ Investor
Investor Services
Services Journal
Journal
as to their capacity for
centralisation. “The less
advanced in the subject
of data centralisation are
the investments banks.
Traditionally, they are
more used to have vertical
organisations. The front office
and middle and back offices
are specialised: one part of the
company deals with the equity,
one fixed income and another
dealing with derivatives, for
example.
“For the asset managers,
given that in one portfolio
the manager may have very
different instrument types,
they have been used to
centralising data. So they are
more advanced.
“For the custodian and the
investor services providers,
they have different activities,
such as fund administration.
What some custodians are
working on now is to set the
grounds for establishing a
kind of business support line
on which they will put all the
data management tasks - that
will be an internal service that
will deliver the data to the
business lines. Some of our
French customers are moving
in that direction, and offering
data management as a service
externally.”
Le Dantec says clients
T
want to be able to evaluate
which data feeds and sources
have been worth the financial
investment. “Clients are getting
data from different providers
so they have a lot of data
providers that don’t have the
same quality. Then this data is
used in different parts of the
organisation.
From centralising data, he
says, SmartCo’s system is able
to calculate and extract reports
on the systems and then tell
them who’s used the data and C
where it’s come from. n
17/07/2009 18:02 Dutch su
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14-21 summit
Dutch ISJ41.indd 21 print ad - 16-06-09.indd 40
magazine 17/07/2009 17:59
17/07/2009 18:02
 Ireland
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
Ireland’s fund evolution
Regulatory regime views investor protection and transparency
as priority in Ireland, writes John Hamrock, Kinetic Partners
Thanks to Ireland’s dedication to
providing cost-effective, efficient and
highly skilled fund administration,
its global reputation as a leader in
international investment management
continues to expand.
Clearly, recent events have required
hedge funds to question existing business
models and investors to increasingly seek
greater transparency. This increased
scrutiny has furthered Ireland’s strong
industry position. With EUR1.4 trillion
in total assets under administration,
half of which is comprised of hedge
fund administration, Ireland continues
to demonstrate its strength and future
potential.
Introduction
The recently announced joint venture
between Morgan Stanley, Goldman Sachs
and Bank of America Merrill Lynch, which
are launching 13 exchange-traded funds
and 22 exchange-traded commodity funds
domiciled in Ireland is evidence of the
country’s growth.
For US traditional and alternative fund
managers, Ireland represents a gateway for
exporting advisory services. US mutual
funds have tax disadvantages when sold
to non-US investors whereas European
registered mutual funds, also known as
Undertakings for Collective Investments
in Transferable Securities (UCITS),
offer greater tax efficiencies when sold
worldwide. Ireland enables US fund
managers to establish themselves in the
EU. Investors, in turn, benefit from access
to more tax competitive products and
added transparency. Ireland is one of the
leaders in Europe for UCITS funds.
“2009 will be the year of the regulated
investment product,” states Gary Palmer,
CEO of the Irish Funds Industry
Association. “In particular, new fund
start ups are feeling increasing pressure
from investors seeking more risk-averse
products and regulated jurisdictions.”
Ireland today
Ireland’s regulatory regime has always
viewed investor protection as a priority
while recognising the importance that
hedge funds place on quick market
access. To reassure investors and ensure
that there are no delays in hedge fund
22-23 ISJ41 ML.indd 22
products reaching the market, Ireland
introduced the Qualifying Investor Fund
(QIF) to balance meaningful oversight
with flexibility. QIFs are authorised and
regulated by the Irish Financial Regulator,
and all parties to the fund must also
be similarly authorised and regulated,
including custodians, trustees and prime
brokers.
Ireland is home to many large global
banks, asset management and service
providers. The Irish Stock Exchange is
a global leader in the listing of funds.
Ireland recently signed a memorandum of
understanding with China, thus opening
the Chinese market to the distribution
of Irish funds. There is no tax on income
or capital gains within Ireland-registered
funds. A range of double taxation treaties
with countries around the globe exist with
no ‘taxe d’abonnement’.
“These products will allow us to
continue to serve our clients’ ever
expanding needs across all spectrums
of their businesses as well as open new
distribution opportunities for Delaware,”
said Christopher McCarthy, co-head of
Global Sub-Advisory Sales and Services for
Delaware Investments.
In spite of a difficult 2008, the
UCITS brand is widely recognised
and distributed in over 140 countries.
UCITS are transparent, and governed
by tried and tested regulation with a
focus on risk management and investor
protection. UCITS III has brought
flexibility to accommodate alternative
strategies utilising leverage and short
exposure. UCITS has evolved to meet
changing market demands through the
implementation of UCITS III and the
introduction of UCITS IV (estimated
implementation by 2011).
UCITS alternative strategies can
utilise total return swaps, futures and
options, hedge fund indices and financial
indices, repurchase agreements and other
derivatives used in efficient portfolio
management, and over-the-counter (OTC)
derivatives subject to certain criteria.
Within the UCITS product framework,
fund sponsors may opt for traditional
long-only investment packaged as a non-
sophisticated investment such as equities
and bonds.
A non-sophisticated UCITS may
22
ISJ Investor Services Journal
measure its global exposure (ie, leverage)
using the commitment approach, which
essentially aggregates the underlying
notionals to determine the fund’s degree
of leverage.
Alternatively, the fund sponsor can use
derivatives with leverage to seek enhanced
absolute returns.
The sophisticated UCITS must
measure its global exposure utilising
the value at risk or another regulator-
approved methodology. Increased
product offerings can be available under
UCITS, such as fund of funds, index
funds, exchange traded funds (ETFs)
and derivative funds. However, physical
shorting of UCITS alternatives is not
permitted; instead, shorting must be
through a synthetic means such as use of
derivatives.
A number of ‘130/30’ funds have been
launched under UCITS III. This type of
investment strategy augments an existing
100% long-only strategy with an added
30% synthetic short sell, also known as
“short extension”. The extra 30% long
exposure is a leveraged exposure offset
by a 30% short exposure in assets which
the investment manager believes are
overvalued. Other configurations such as
150/50 or 120/20 are also possible.
UCITS Guidance Note 3/03 provides
guidelines on how cash settled derivative
instruments must be covered at all
times by liquid assets, ie, money market
instruments and transferable securities
that can be repurchased, redeemed or
sold at limited cost, in terms of law fees
and narrow bid/offer spreads and very
short settlement delay. Under UCITS III,
FDSs (financial derivative instruments)
may be used subject to certain limits.
A fund is permitted to invest up to
100% in other UCITS funds and up to
30% in aggregate non-UCITS funds
provided that these funds meet certain
criteria (ie, must be regulated to a
standard equivalent to a UCITS) and in
the case of both UCITS and non-UCITS
are subject to certain diversification
rules (eg, maximum 20% in a single
investment). The aggregate credit risk
exposure to each derivatives counterparty
cannot exceed 10% of the net asset value.
A UCITS fund cannot use a prime broker,
but similar type arrangements may be
17/07/2009 09:09
 ISJ Investor Services Journal
possible through the use of International
Swaps and Derivatives Association/Credit
Support Annex arrangements.
UCITS IV implementation
UCITS IV was granted informal
acceptance by the European Parliament in
January 2009 and awaits final ratification
by the European Council of Ministers.
Once adopted, UCITS IV will permit the
passporting of management companies
across borders. It will introduce a
streamlined administration of cross-
border fund distribution and allow for
cross-border fund mergers that will
facilitate cost efficiencies resulting in
lower fund expenses and better returns for
investors. Master-feeder structures will be
allowed which will lead to greater pools
of assets and economies of scale. The Key
Investor Information Document will be a
succinct document describing the fund’s
characteristics. UCITS IV will also lead
to enhanced cooperation mechanisms
between national regulators in Europe.
Non-UCITS
In addition to UCITS funds, Ireland also
allows for non-UCITS funds to compete
with alternative funds domiciled in
traditional offshore centers. Essentially,
there are three categories of non-UCITS
funds:
1. Retail Fund
A retail non-UCITS fund is not required to
have a minimum initial subscription limit.
Generally, the investment diversification
limits are similar to the UCITS regulations.
It is harder to register a retail non-UCITS
fund for cross-border distribution.
2. Professional Investor Fund (PIF)
With a PIF the minimum initial
subscription requirement per investor is
EUR125,000. Derogations from investment
restrictions imposed on retail non-
UCITS funds may be granted by the Irish
Financial Regulator on a case by case basis.
3. Qualifying Investor Fund (QIF)
QIFs are designed for high net worth
individuals or institutional investors. The
investment restrictions and borrowing
limits are not applied. The minimum
initial subscription per investor is
EUR250,000. The QIF is confined to
Net Assets of European UCITS (EUR bln)
8,000
6,000
4,000
2,000
0 depreciation coupled with
2000 2001 2002 2003 2004
UCITS Non UCITS
22-23 ISJ41 ML.indd 23
individuals with a minimum net worth in
excess of EUR1,250,000 or to institutions
which invest on a discretionary basis and
having a net worth of at least EUR25
million.
Ireland - tomorrow
On 30th April, 2009 the European
Commission issued a new draft Directive
on Alternative Investment Fund Managers.
In this directive, alternative investment
funds are defined as any collective
investment undertaking, which is not a
UCITS, and so could include hedge funds,
funds of hedge funds, private equity funds,
real estate funds, infrastructure funds, and
non-UCITS retail funds.
This directive will impose added costs
on managers in terms of requiring them
to hold additional capital, implement
complex new fund reporting and risk
management systems. The Irish fund
administration industry will analyse the
new directive in great detail and work
closely with hedge fund manager clients
to help adapt to the new directive as
efficiently and seamlessly as possible. This
directive, coupled with the harsher UK tax
regime, may lead alternative investment
managers to consider establishing in
Ireland.
Clearly, Ireland is well-positioned
to grow from fund administration to
security analysis, trading, and portfolio
management. Government agencies such
as the Industrial Development Agency
(IDA Ireland) and Enterprise Ireland are
devoting significant resources to attract
asset management companies to establish
a presence in Ireland. The Government
and industry are working together to
build a world class third level academic
institution dedicated to offering advanced
degrees in security analysis and portfolio
management. There are also a growing
number of professionals in Ireland who
have attained chartered financial analyst
(CFA) qualifications.
Additionally, Ireland has a strong
global reputation in technology with
companies like Intel and Hewlett Packard
long established on its shores that may
be leveraged for the asset management
industry. Quant
UCITS growth shops, for
The graph shows the growth example, utilise
of assets in European significant
technology in
domiciled UCITS from EUR3
trillion in 1998 to EUR7.9 managing index
trillion through 2007. The and enhanced
drop in assets in 2008 to index portfolios.
EUR6.1 trillion was due to
the combination of market And beyond...
The benefits of
net redemptions. domiciling funds
in Ireland is
23
Ireland
UCITS documents required
Application to the Irish Financial
Regulator; Business plan prospectus;
Simplified prospectus; Memorandum
and Articles of Association/Trust
Deed/Common Contractual Fund
Deed; Custody/administration
agreements; Investment management/
advisory agreement; Distribution
agreement Derivative (or risk)
management process; Directors
questionnaire; Annual Financial
Derivative Instruments (FDI) report
attracting more attention on the global
investment playing field. Indeed, the
country has accomplished a good deal
this past year, particularly as Ireland has
secured itself as a gateway for global
funds distribution.
Clearly, 2008 and the opening months
of 2009 have been difficult for the global
financial services industry. The speed
and the tone of regulatory change will
be challenging for the asset management
and servicing industry, both in Europe
and in the United States.
The asset management industry has
proven its resiliency and its ability to
adapt in difficult market and regulatory
environments. In spite of all the bad
news, the significant fund redemption
levels and the more stringent industry
regulations, we are encouraged by
the initiatives underway with asset
management firms to increase cross-
border marketing and distribution, to
recruit sales and business development
professionals, and to execute corporate
mergers and acquisitions. With the
increased scrutiny that less-regulated
offshore centers and tax havens are
facing, Ireland’s future as a regulated
fund centre looks bright. n
UCITS service providers
Promoter - entity which the Financial
Regulator requires to stand behind
the fund; Management company -
eight core management functions;
self-managed UCITS funds efficient
and cost effective option; Investment
manager - no need to be domiciled in
Ireland, but must be approved by the
Irish Financial Regulator; Directors;
Custodian/Trustee - the Trustee is
responsible for duties relating to the
safekeeping of the fund’s assets and
carrying out oversight functions on
behalf of shareholders; Administrator;
Auditor; Irish Stock Exchange listing
sponsor.
17/07/2009 09:09
 ISJ
ISJDirectory
Directoryof
ofServices
Services ISJ Directory of Services ISJISJInvestor
InvestorServices
ServicesJournal
Journal

Asset Servicing
T: +44 (0) 208 760 7130
C: Stephen Everard or
Goal is widely-acknowledged in the financial services sector for its innovative and
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Consultancy

SMA Financial is the UK’s premier provider of SWIFT services and a long standing Simon Murby
business partner of SWIFT. SMA’s vast experience in the banking and securities Managing Director
industry has provided high quality provision of SWIFT related consultancy, training, SMA Financial Limited
system care and bureau services which is second to none. SMA prides itself on their Telephone : +44 (0)20 7940 4200
in-depth and highly experienced team of consultants chosen from the banking and Bramah House,
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Custody & Clearing

BHF Asset Servicing GmbH comprises the custody, depotbanking and securities services
of BHF-BANK Aktiengesellschaft. With around 250 members of staff, approx. EUR 270 Strahlenbergerstraße 45; 63067
billion in assets under administration and a depotbanking volume of EUR 85 billion, Offenbach a.M. Germany
BHF Asset Servicing GmbH is one of Germany’s leading specialists in depotbanking •Contact: Moritz Ostwald
and custody business. It develops innovative and high-class services for investment •Phone:+49 69 667744 838
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the individual needs of its clientele.
bhfassetserv.com
Assets under Administration: EUR 270 bn
No of funds: 478

DnB NOR is the leading provider of Custody, Clearing and Remote Member Service in T: +47 22 94 92 95
Norway. DnB NOR offers a full range of securities settlement, Corporate Action and cash F: +47 22 48 28 46
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As the largest commercial bank in Norway, DnB NOR offers clients full services in
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Banking Securities Services provides award winning local and regional custody services For further information please contact
for investment professionals. We are proud to be the largest custodian provider in Lilla Juranyi, Global Head Custody
terms of assets and number of foreign clients in Central & Eastern Europe. ING has been at + 31 20 7979 435
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Other activities of ING Wholesale Banking Securities Services are Paying Agency Services
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Intesa Sanpaolo’s Transaction Services include : Piazza della Scala 6

• Sub Custody, Derivatives and Remote Membership Clearing
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cash letters intesasanpaolo.com

24

Directory ISJ41.indd 24 16/07/2009 18:15

 ISJ Investor
ISJ Investor Services
Services Journal
Journal ISJDirectory
ISJ DirectoryofofServices
Services
Nordea is the leading financial services group in the Nordic and Baltic region and operates
through three business areas: Nordic Banking, Private Banking and Institutional &
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provides high quality, tailor-made custody services for local and foreign investors dealing with Contact:
Nordic and Baltic securities. Due to the unique history of being formed from four established Nina Groth
banks, Nordea is the only Nordic custody provider with strong local presence and expertise in all Head of Sub-custody and Clearing
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to deliver high quality services that meet both clients’ and each local market’s requirements. E-mail: nina.groth@nordea.com
Leading Nordic custodian: Critical mass and resources available; deep local experience and
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www.rbcdexia.com
RBC Dexia Investor Services offers a complete range of investor services to institutions T: +44 (0) 20 7653 4096
worldwide. Our unique offshore and onshore solutions, combined with the expertise F: +44 (0) 20 7248 3946
of our 5,500 professionals in 16 markets, help clients grow their business and sustain Contact: Antony Johnson
enhanced performance through efficiency improvements and robust risk management Global Head Sales and Distribution
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global custodians with USD 1.9 trillion in client assets under administration. Address: 71 Queen Victoria Street,
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Santander is Spain’s leading financial institution and the largest bank in the euro zone
by market capitalization. Our commitment and contribution to the securities industry is
T: Europe: (34) 91 2893932 / 28
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T: USA: (1212) 350 39 02
Santander’s cutting edge technology enables it to offer a comprehensive array of
W: santanderglobal.com
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E: globalsecurities@
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Financial Asset Services is the custody and investments-servicing division of Standard

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Securities Lending Department
Standard Bank has assets under custody to the value of ZAR1.56 trillion and an overall 25 Sauer Street
market share of approximately 40%. 2nd Floor, Entrance 3
Johannesburg 2001
Standard Bank’s unique selling point lies in its consultative approach to South Africa
relationships combined with the bank’s commitment to custody and investment T: +2711 636 6615
administration services. E: adam.bateman@standardbank.co.za
W: www.standardbank.co.za

SEB is the leading provider of securities services in the Nordic and Baltic area. We
are committed to custody and clearing processes for the wholesale market. We hold
T: +46 8 763 53 04
securities worth over 560 bn EUR and provide services in more that 75 markets, 10 of
F: +46 8 763 69 30
them under the SEB name (Sweden, Norway, Finland, Denmark, Luxembourg, Germany,
C: Goran Fors, Global Head
Estonia, Latvia, Lithuania and Ukraine).
of Custody Services
We offer a full range of securities services including corporate action and information
E: goran.fors@seb.se
services, securities lending and services to remote members of the Nordic and Baltic
W: www.seb.se
stock exchanges. We continuously develop new products in connection with clients and
partners to ensure we deliver the high-quality products our clients demand. We always
strive to make the processes more efficient. With a history of over 150 years in the
securities industry; we know the market and our clients well.

Société Générale Securities Services offers institutional investors, asset managers and Sébastien Danloy
financial intermediaries a comprehensive range of financial securities services: custody, Global Head of Sales,
clearing & trustee services, fund administration, asset servicing and transfer agency. Investor Services
SGSS currently ranks 3rd European custodian and 9th worldwide custodian (Source: Société Générale Securities Services
Globalcustody.net) with EUR 2,580* billion in assets held and valuates 4,354* funds T: +33 (0)1 41 42 98 65
representing assets of EUR 405* billion (as of June 2007). E: sebastien.danloy@socgen.com
W: www.sg-securities-services.com

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With an extensive network that spans over 70 countries, well-positioned in the emerging trade and
investment corridors across Asia, Africa and the Middle East, Standard Chartered’s Wholesale Banking
business combines global capabilities with local expertise to develop innovative products and services C: Giles Elliott, Global Head, Securities
to meet the diverse needs of our corporate and institutional clients in some of the world’s most dynamic Services
markets. Building on a rich banking heritage, Standard Chartered is noted for a client-focused approach P: +65 6517 0134
to business, unmatched on-the-ground expertise and a solid track record of innovative, award-winning E: Giles.Elliott@sc.com
financial services solutions, reflecting our continued commitment to power our clients’ ambitions. As W: www.standardchartered.com
one of Asia’s leading custodians, Standard Chartered serves global, regional and local custodians and
broker-dealers, as well as local and regional fund managers. The Bank plays a key role in promoting the
development of these markets and keeping the international investor community informed of industry
developments across the region.

Swedbank provides client-focused custody services to domestic and international

securities lending (including auto-borrow facilities), derivative clearing services, proxy
voting, full corporate actions and income service. Flexibility is an important aspect of
Swedbanks products and services. Our dedicated Client Relations Managers and Account T: +46 8 5859 1800
Managers are focused on personalized processing and reporting solutions. F: +46 8 7237 147
Other Features: C: Neal Meacham, Head of Custody
• ISO9001:2000 quality certification. E: neal.meacham@swedbank.com
• Swedbank Markets Online (SMO) internet information and reporting tool for A: Stockholm SE 105 34 Sweden
Custody and Securities Lending.
• Nordic Custody alliance with DnB NOR (Norway), OKO Bank (Finland) and
Amagerbanken (Denmark) to offer regional custody product.
Institutional Assets under Custody: USD 70 billion

Data Services
Market Data & Analytics provides high-value real-time market data, indices and back Avox
office services. Information from diverse sources are provided to its customers, tailored Redwither Tower
to their specific information needs. Accuracy and reliability are ensured by collecting Redwither Business Park
the data from the Group’s own trading platforms, such as Xetra® and Eurex® and Wrexham, LL13 9XT
cooperation partners like STOXX Ltd. and the Irish Stock Exchange. Avox®, a majority- United Kingdom
owned subsidiary, validates, corrects, enriches and maintains
business entity data. With an operational model, unique in the industry, Avox® enables T: +44 (1978) 661 813
clients to comply with regulatory requirements and to achieve a holistic view of the risk F: +44 (1978) 661 668
exposure towards a client. W: www.avox.info

Interactive Data Corporation (NYSE: IDC) is a leading global provider of financial market www.interactivedata.com
data, analytics and related services to financial institutions, active traders and individual T: 020 7825 7800
investors. The Company’s businesses supply real-time market data, time-sensitive F: 020 7608 3514
pricing, evaluations and reference data for millions of securities traded around the Brendan Beith
world, including hard-to-value instruments. Many of the world’s best-known financial European Sales Director
service and software companies subscribe to the Company’s services in support of their eu-info@interactivedata.com
trading, analysis, portfolio management and valuation activities. Through its businesses, Fitzroy House
Interactive Data Pricing and Reference Data, Interactive Data Real-Time Services, 13-17 Epworth Street
Interactive Data Fixed Income Analytics, and eSignal, the Company has approximately London EC2A 4DL UK
2,300 employees in offices located throughout North America, Europe, Asia and
Australia.

SmartCo is a leading provider of data management solutions for the financial industry. For further information: www.smartco.fr
SmartCo’s software, Smart Financial Data Hub, covers all the data area, including or info@smartco.fr
financial instruments, market data, third parties, funds, transactions, and provides full
connectivity, a powerful and user friendly front-end, traceability, quality control, data SmartCo
enrichment and customisable workflow. 37 rue de Liège
Our solutions are based on SmartPlanet, an innovative technology focused on data 75008 Paris
management, and able to meet evolving business requirements. France
SmartCo offers to its customers the ability to respond in the fastest way to regulatory and T: + 33 1 58 22 29 60
business changes. E: info@smartco.fr
W: www.smartco.fr

Fund Administration
For more information visit our website:
Established in 2002, IMFC Fund Services B.V. is a boutique hedge fund administrator www.imfcfundservices.com
and a trustee with its offices in Amsterdam and Sydney. IMFC offers third parties
administration and related services to all type of onshore and offshore funds combining www.imfcfundservices.com
high quality, independency, technology, timely calculation with flexibility, experience, t +31.20.644.4558
f +31.20.644.2735
custom-made solutions and competitive rates. Our services include: fund set-up and
Mrs. Consuelo Nardon
corporate services, NAV calculation and other accounting services, R&T agent and other
e: consuelo.nardon@imfc.nl
investors and compliance services.
Rivierstaete Building, Amsteldijk 166,
1079 LH Amsterdam, Netherlands

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Intesa Sanpaolo’s Transaction Services include : Piazza della Scala 6

• Sub Custody, Derivatives and Remote Membership Clearing
20121 Milan, Italy
• Global Custody and Depository Bank for mutual funds, pension funds, real
T: +39 02 8794 2466
estate funds, private equity funds and hedge funds
• Fund Administration for mutual funds, pension funds, real estate funds, F: +39 02 8794 1519
private equity funds and hedge funds W: intesasanpaolo.com
• Paying Agent for foreign funds and sicavs C: Riccardo Lamanna
• Cash and Payment services like swift to checks, mass payments, checks and E: riccardo.lamanna@
cash letters intesasanpaolo.com

Société Générale Securities Services offers institutional investors, asset

managers and financial intermediaries a comprehensive range of financial securities Sébastien Danloy
services: Clearing, Liquidity Management, Custody and Trustee, Fund Administration, Global Head of Sales
Asset Servicing, Fund Distribution Services and Issuer Services. SGSS currently ranks 3rd Société Générale Securities Services
European custodian and 7th worldwide T: +33 (0)1 41 42 98 65
custodian (Source: Globalcustody.net) with EUR 2,731* billion in assets held and valuates E: sebastien.danloy@socgen.com
5,158* funds representing assets of EUR 499* billion (at end March 2008). W: www.sg-securities-services.com

Swiss Financial Services

Drawing upon an extensive track record of proficiency, dependability and (Ireland) Ltd.
responsiveness, Swiss Financial Services acts as administrator as well as registrar and Block 4B,Cleaboy Business Park,
transfer agent of funds investing in a broad range of financial instruments. These Old Kilmeaden Road,
include futures, foreign exchange, equities, options, bonds and other funds. Waterford, Ireland
T: +353 51 351180
We perform accounting and administration services for diverse fund types domiciled F: +353 51 871595
in, but not limited to, the United States, Bahamas, Cayman Islands, B.V.I. and Ireland.
Adrian Maher
E: amaher@swiss-financial.ie

Luxembourg: Jean-Paul Gennari,

tel. +352-44-1010 1
Fund Services is a dedicated fund administrator providing customized and flexible services for Switzerland: Markus Steiner,
traditional and alternative investments. tel. +41-61-288 4910
Our comprehensive range of services for investment funds includes fund set-up, registration and W: www.ubs.com/fundservices
support around the world, fund accounting, NAV calculation, risk control and reporting. We have C: Andre Valente
practical experience with registering funds in 28 jurisdictions. T: + 41 61 288 6269
We provide a flexible offering from the full range of services, including Private Labelling, to selected E: andre.valente@ubs.com
functions. Through our leading fund administration architecture, multi-source pricing and powerful A:UBS Global Asset Management -
compliance tools, we offer a tailored, cost effective service. www.ubs.com/fundservices Fund Services, Brunngässlein 12,
PO Box CH-4002 Basel, Switzerland

Hedge Fund Administration

Apex Fund Services Ltd is a global hedge fund administration solution for hedge funds C: Peter Hughes
and private equity clients located in 12 separate jurisdictions across the globe. The Group Managing Director
company uses the software solution, PFS PAXUS, which is a fully integrated hedge fund T: +1 441-292-2739
accounting system combined with web-based reporting to allow clients and investors F:+1 441-292-1884
to access their information 24/7 securely online. We will tailor all solutions to meet E: peter@apex.bm
your needs and our continuing focus on the quality of service and the relationship with John Bohan
each and individual client ensures that we retain our ethos of providing a personalized Group Manager of Operations
service rather than a generic solution. T: +353 21 4633366
Highly qualified and experienced staff, mirrored with top tier technology and F: +353 21 4633377
competitive fee structures make Apex Fund Services Ltd the clear choice for your fund E: John@apexfunds.ie
administration needs.

Custom House Administration &

Custom House, which is one of the world’s largest independent alternative investment and
Corporate Services Limited
hedge fund administrators, was awarded a SAS 70 Type I in May 2007 and a SAS 70 Type II in
A: 25 Eden Quay, Dublin 1, Ireland
December 2007.
T: +(353) 1 878 0807
Custom House offers a round-the-world, round-the-clock service from its office in Dublin and F: +(353) 1 878 0827
representative offices in Chicago and Singapore, enabling it to provide, not only complete C: dermot.butler@
global administration services, but also the ability to produce daily dealing NAVs. customhousegroup.com
Custom House is authorised by the Irish Financial Regulator under Section 10 of the C: david.blair@
Investment Intermediaries Act, 1995, which authorisation does not extend to the Chicago customhousegroup.com
and Singapore representative offices. www.customhousegroup.com

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Fund Services holds a leading position in the area of hedge fund administration Cayman Islands: Darren Stainrod,
with specialized teams around the world. We offer a complete range of services tel. +1-345-914 1076
including accounting, NAV calculation, shareholder services, banking and credit Eire: Don McClean, T: +353-1-436 3636
facilities. US: Concetta Mastrangelo,
With specialist expertise in both single manager and fund of hedge fund tel. +1-212-882 5523
administration, services can be provided for both onshore and offshore funds. W: www.ubs.com/fundservices
C: Darren Stainrod, T: ++1-345-914 1076
Through our comprehensive range of services and products, leading edge
E: Darren.stainrod@ubs.com
technology platforms and superior client service, we work in partnership to offer A: UBS Fund Services (Cayman) Ltd, PO
the solutions you need. Box 852 GT, Grand Cayman, Cayman Is

International Finance Centres

The British Virgin Islands has created a progressive and transparent environment for the
establishment and regulation of mutual/hedge funds and their functionaries. By the end British Virgin Islands
of Q3 2006 the BVI had recognised or registered more than 4,000 funds, and licensed International Finance Centre
some 700 managers and administrators, making the BVI a leading domicile of choice for Haycraft Building
investment business. Benefits of conducting investment business in the BVI include: 1 Pasea Estate
• Fast-track registration and licensing system - funds can be registered in a few days. Road Town
• Presence of qualified, experienced legal, accounting & administration practitioners. Tortola
• A well-developed corporate professional infrastructure. British Virgin Islands
• Modern, robust and cost-effective regulatory and corporate regimes. T: +1 284 494 1509
• BVI private and professional funds fall outside the scope of EU Savings taxation Directive. F: +1 284 494 1260
• Segregated Portfolio Companies - also known as Protected Cell Companies - can now be W: www.bviifc.gov.vg
formed as mutual funds under the BVI Business Companies Act 2004.

Payments & Settlements

VocaLink is the payment transaction specialist. Trusted by the world’s top banks VocaLink
our automated payment system processes over 90 million transactions per day. The Drake House
VocaLink switching platform powers the world’s busiest ATM network and provides Homestead Road
end-to-end management of Europe’s largest ATM estate, while the Real-Time Rickmansworth
Payments platform provides the central infrastructure for the UK Faster Payments Hertfordshire
service. The VocaLink EuroCSM delivers reach for our clients throughout the SEPA WD3 1FX
and beyond with a range of value-added services that leverage our know-how and
technical capabilities. VocaLink is the partner of choice internationally, working T: +44(0)870 1650019
with BGC to process Sweden’s automated payments. F: info@vocalink.com
Find out how we can help your business at www.vocalink.com W: www.vocalink.com

Prime Brokerage
Newedge Global Prime Brokerage Group is a global, multi-disciplinary, solution-
providing team dedicated to delivering superior services to alternative investment Philippe Teilhard de Chardin,
industry participants including hedge funds, commodity trading advisors (CTAs), Global Head of Prime Brokerage
fund of hedge funds, family offices, and institutional investors (insurance companies, T +44 20 7676 8536
banks and pension funds). The Newedge prime brokerage team offers a global range Vincent Tournant, Head of Business
of brokerage services covering a wide range of asset classes including equities, Development T +44 20 7676 8171
bonds, currencies, commodities, and their related listed and OTC derivative products. Duncan Crawford, Head of Capital
We also offer an innovative portfolio-based cross-margining solution, a dedicated Introductions T +44 20 7676 8504
account management desk, hedge fund start up services, quantitative information on E: pbinfo@newedgegroup.com
the hedge fund industry, capital introductions services, and recently prime brokerage www.newedgegroup.com/primebrokerage
services to Sharia compliant hedge funds. Newedge is wholly owned by Calyon and
Société Générale, with both companies having 50% ownership.

Securities Lending
Data Explorers (www.dataexplorers.com), based in New York and London, is the UK: 2 Seething Lane, London, EC3N 4AT
world’s most complete resource for data, analysis and insight into securities T +44 (0) 20 7264 7600,
lending and short selling. The company’s proprietary data gives an unrivalled, F +44 (0)20 7392 4004
comprehensive view on share lending and short-selling activity. With data sourced US: 75 Rockefeller Plaza, 19th Floor
directly from securities lending desks of over 100 of the top lending firms and New York, 10019, USA
representing most of the global securities lending market, Data Explorers has built T +1 212 710 2210 F + 1 212 710 2212
a reputation with leading financial institutions as the source for short intelligence Julian Pittam T +44 (0) 207 264 7616
that informs their decision-making and their coverage of market sectors and E:julian.pittam@dataexplorers.com
companies. Please visit our Blog: dataexplorers.com/news, Twitter, twitter.com/ New York: Ken Read T +212 710 2210
dataexplorers, Video dataexplorers.com/daily-briefing and LinkedIn linkedin. E: kenneth.read@dataexplorers.com
www.dataexplorers.com
com/companies/data-explorers sites.
www.equilend.com
EquiLend is a leading provider of trading services for the securities finance EquiLend Europe Ltd.
industry. EquiLend facilitates straight-through processing by using a common 14 Devonshire Square
standards-based protocol and infrastructure, which automates formerly manual London, EC2M 4TE
trading processes. Used by borrowers and lenders throughout the world, the +44 (0) 207 426 4426
T: UK- +44 (0)20 7743 9510
EquiLend platform allows for greater efficiency and enables firms to scale their C: Michelle Lindenberger
business globally. Using EquiLend’s complete end-to-end services, including pre- E: michelle.lindenberger@equilend.com
and post-trade, reduces the risk of potential errors. The platform eliminates the A: 17 State Street, 9th Floor
need to maintain costly point-to-point connections while allowing firms to drive New York, NY, 10004
T: US- +1 212 901 2224
down unit costs, allowing firms to expand business, move into different markets, C: Michelle Lindenberger
increase trading volumes, all without additional spend. This makes the EquiLend E: michelle.lindenberger@equilend.com
platform a cost-efficient choice for all institutions, regardless of size. W: www.equilend.com

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eSecLending is a full service securities lending agent and administrator of
customized securities lending programs. Their program has been adopted by many of
the world’s largest and most sophisticated asset gatherers including pension funds, T: US- +1 617 204 4500
mutual funds, investment managers and insurance companies. They are a third party T: UK- +44 (0)20 7469 6000
industry specialist providing lenders with customized programs, high touch client C: Christopher Jaynes
service, comprehensive risk management, and superior risk adjusted returns. The E: info@eseclending.com
firm takes a highly consultative approach with their clients by structuring separate, W: www.eseclending.com
non-pooled programs and utilizing a competitive auction to determine the optimal A: 175 Federal Street, 11th FL, Boston, MA
route to market for their clients’ lendable assets. Having built their business to 02110, US
incorporate investment practices such as the use of specialists, multiple-managers,
unbundling, price transparency, and competition, their approach ensures best A: 1st Floor, 10 King William Street,
execution and also provides clients with greater control over their programs, allowing London EC4N 7TW, UK
them to more effectively monitor and mitigate risks and counterparty relationships.

Eurex is one of the largest derivatives exchanges and the leading clearing house
in Europe. Wherever you are located, we provide you with access to the benchmark
futures and options market for European derivatives. Eurex also offers short term
W: www.eurexseclend.com
funding products, such as Eurex Repo. Eurex Repo is among the forerunners in
T: +41 58 854 2066
providing integrated trading and clearing for repo transactions. Eurex’s latest F: +41 58 854 2455
innovative marketplace is called Eurex SecLend. E: info@eurexseclend.com
Eurex SecLend. Europe’s leading investment banks participate as borrowers Eurex Zurich Ltd., Selnaustrasse
in the Eurex SecLend marketplace, acting as principal brokers, dealers and 30, 8021 Zurich, Switzerland
intermediaries. They all benefit from Eurex’s leading state-of-the-art trading and
processing services. For Eurex, service and technology innovation is not just a
buzzword. New trends are being transformed into inventions through the adoption
of advanced trading practices. Find out more on www.eurexseclend.com.

FINACE® is the only fully integrated solution today which supports the future T: +41 (0)44 298 92 00
business model within the area of Securities Finance and Collateral Management. F: +41 (0)44 298 93 00
The architecture of FINACE® is based on a stable, leading edge technology A: COMIT AG, Pflanzschulstrasse 7,
platform, which was developed with performance and robustness as the focus of CH-8004 Zürich, Switzerland
design. With flexibility at its core, customer-driven extensions and modifications W: www.finacesolution.com
can be quickly and easily applied to the standard component set. www.comit.ch

JPMorgan’s Securities Lending program is unparalleled due in no small part to New York: William Smith
T: 212-623-5664
the Firm’s breadth of capability, financial strength, professional expertise and
E: william.z.smith@jpmorgan.com
seamless operations. Our program enables investors to access a broad spectrum of
London: Michael Fox
lending markets, with a diverse borrower base, offering a broad indemnification T: 44 207 742 0256
against borrower default, while achieving very competitive bids for their E: michael.uk.fox@jpmorgan.com
securities - all of this in an environment designed not to compromise the activities Sydney: David Brown
of their fund managers. As one of the founding members of EquiLend, a global T: (61-2)92504606
automated platform for borrowers and lenders, JPMorgan is at the forefront E: david.ldn.brown@jpmorgan.com
of technology and is ideally placed given its integrated lending, custody and W: www.jpmorgan.com/wss
accounting platforms.

Santander is the only Spanish financial institution with a team exclusively

dedicated to securities finance & with the purchase of Abbey in 2004 has W: www.gruposantander.com
expanded its capacity on a Global basis with trading teams in London (UK) & T: (3491) 289 39 42/54
Connecticut (USA). E: securitieslending@
gruposantander.com
Santander’s leading local capabilities in Spain, Portugal, UK, USA & Latin
America, along with its solid balance sheet & combined with the state-of-the-art
technology, provides its clients with the broadest range of solutions in securities
lending & financing, including availability across all assets classes, as well as
access to uncommon emerging markets.

Around the world, securities financing is managed on SunGard’s Email: securities.finance@

proven solutions for international and U.S. domestic securities lending and sungard.com
repo for over 250 clients. Through our Loanet, Global One, Martini and Astec Contact:
Analytics products and services, we provide comprehensive business solutions EMEA: +44 (0) 20 8081 2779
and information with worldwide reach for equities or fixed income securities America’s: +1 (646) 445-1179
financing. These solutions – all in an integrated, exception-based processing Asia Pacific: + 62276400
architecture – includes order routing, pre-trade analytics, trading, position Visit: www.sungard.com/
management, operations, accounting, settlement and reconciliation. securitiesfinance

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BI-SAM is a leading provider of analytics software, client reporting and data

management solutions to the investment management community.
Our integrated and innovative solutions have already been adopted by many A: BI-SAM Ltd
renowned asset managers in France, Belgium, Luxembourg, UK, Hong Kong and 1 Cornhill
Singapore who have assets under management ranging from 10 to 450 billion Euros. London EC3V 3ND
The B-One suite of products covers: performance measurement, performance T: +44 (0)20 3008 5834
attribution (equities, balanced and fixed income), risk attribution (ex-post and ex- F: + 44 (0)20 3008 5831
ante), as well as multi-lingual client reporting and factsheets. This suite of products E: marketing@bi-sam.com
can be used either as stand-alone applications or ASP hosted solutions. W: www.bi-sam.com
The Company has approximately 45 employees in offices located in Europe (Paris,
London, Luxembourg). Offices in Asia and North America are under consideration.
The Company is headquartered in Paris.

DST International is the world’s premier vendor of technology solutions to the global investment T: UK +44 (0)20 8390 5000
management community with over 700 clients in 55 countries, and 1500 employees in 19 of the Boston +1 617 482 8800
world’s leading financial centres. Our wide range of asset management solutions meet the needs of Hong Kong +85 225 812 880
fund managers, dealers, settlement staff, custodians and record keepers operating as international F: +44 (0)20 8390 7000
asset managers; from front office simulation, opinion management and modelling functions, E: info@dstintl.com
through data management, dealing and settlement to custody and corporate actions. The suite of A: DST House, St Mark’s Hill, Surbiton,
products can be used either as stand-alone applications or brought together in flexible combinations Surrey, KT6 4QD
according to specific needs. W: www.dstinternational.com

Eagle Investment Systems LLC is a global provider of financial services technology,

serving the world’s leading financial institutions. Eagle’s Web-based systems support W: www.eagleinvsys.com
the complex requirements of firms of any size including institutional investment T: +44 (0) 20 7163 5700
managers, mutual funds, hedge funds, brokers, public funds, plan sponsors, and F: +44 (0) 20 7163 5701
insurance companies. Eagle is committed to providing enterprise-wide, leading-edge A: The Bank of New York Mellon
technology and professional services for investment accounting, data management, and Financial Centre
performance measurement. Eagle’s product suite is offered as an installed application or 160 Queen Victoria Street
can be hosted via Eagle ACCESS, Eagle’s application service provider. Eagle Investment London EC4V 4LA
Systems LLC is a division of The Bank of New York Mellon Corporation. To learn more
about Eagle’s solutions, contact sales@eagleinvsys.com or visit www.eagleinvsys.com.

Financial Tradeware provides integrated solutions for medium to small sized Investment
Management firms, Fund Managers and Hedge Funds, covering the full trade life cycle. W: www.f-tradeware.com
It is part of the Dharma Group of companies and benefits from the joint contributions T: +44 (0)20 7493 2773
and experiences within the group of market traders, business analysts, financial services F: +44 (0)20 7495 4858
professionals and skilled Microsoft Certified programmers. The company has developed a C: Graham Bright
suite of applications that integrate and Straight Through Process (STP) real-time trading, E: info@f-tradeware.com
back office administration, accounting and compliance. Ultra.net®, S-Messenger® and A: 31 Dover Street
H-Fund® arwe the company’s flagship products all based on Microsoft.NET infrastructure. London W1S 4ND UK
The company also offers a Member Concentrator for hosted SWIFT connectivity and Member
Administered Closed User Group (MA-CUG) services for Corporates and Hedge funds.

Isis Financial Systems provides mission critical investment management software and
services to many large and small companies. Our customers perform a broad range of
functions including fund accounting, derivative and hedge funds, wealth management, Contact:
and pension and endowments, etc…. Our integrated solution services the front, middle, Isis Financial Systems
and back offices of these companies with software that accommodates most any security 14 Felton Street
type. Built on a contemporary three tiered architecture our application helps financial Waltham, MA 02453
companies improve operating efficiencies, increase accuracy and reliability and improve Sales@IsisFS.com
customer service. (00-1) 781-209-0262
IsisFS has the experience and IMS has the tools to improve your operations and save you
money.

SunGard is one of the world’s leading software and IT services companies. SunGard serves
more than 25,000 customers in more than 70 countries, including the world’s 25 largest SunGard Global Trading
financial services companies. 25 Canada Square, London E14 5LQ

Tel +44 (0)20 8081 2000

Dedicated to post trade securities operations, GL RIMS is your comprehensive real time
securities post execution processing solution, covering middle office, settlement and
Fax +44 (0)20 8081 3399
accounting requirements. Its wide use of automation enables global capital markets
organisation to achieve maximum STP. It is a flexible, highly scalable and easy to install www.sungard.com/globaltrading
platform with a new Service Oriented Architecture feature that allows smooth and
efficient connections with other third parties within a company. Email: info.globaltrading@sungard.com

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A:IGEFI Group Sàrl - 7, Rue des

IGEFI is the foremost provider of software solutions for international fund promoters, Primeurs,
third-party service providers and fund managers. Its prestigious client-base is testimony L-2361 Strassen
to our commitment, service and quality with more than 200 expert staff supporting T: +352 26 44 211
clients from seven offices worldwide including Bangalore, Boston, Frankfurt, Geneva, F: +352 26 44 21 44
London, Luxembourg and Paris. MultiFonds is operational in more than 20 countries E: marketing@igefi.com
worldwide and support investment funds assets in excess of US$ 2 trillion. MultiFonds W: www.igefi.com
Fund Accounting and MultiFonds Transfer Agency are developed on a “one system-one C: Mr. Jesper Steiness - Head of
database” philosophy and provide significant advantages including reduced overhead Business Development
and IT support costs and single look and feel reporting for global clients. Europe & Asia
E: jesper.steiness@igefi.com

For more information on Information

Mosaic, please visit our website at
Information Mosaic is a global provider of advanced custody, corporate actions and wealth www.informationmosaic.com
Global:
management solutions to the global securities industry. Information Mosaic’s business
emullan@informationmosaic.com,
professionals leverage decades of financial industry expertise and technical knowledge
US:
to deliver complex projects on time and within budget. Since inception, the company emadigan@informationmosaic.com
has utilized the most modern technology to develop solutions to run on a scalable, Europe:
single platform. Today, Information Mosaic supports clients from offices in Boston, aleyder@informationmosaic.com
Dublin, London, Luxembourg, New York and Singapore. Currently, six of the top 10 global Asia:
custodians deploy Information Mosaic solutions worldwide. djennings@informationmosaic.com
General Enquires:
jflett@informationmosaic.com

For more than a decade, administrators, managers, and advisors have relied
on KOGER for dependable software tools backed by extensive industry T: 001-201-291-7747
experience and expertise. Now, for those who want to reduce costs and streamline F: 001-201-291-7808
business processes, Koger offers Fully Integrated Fund C: Mr Ras Sipko
Administrator, a vertically integrated suite serving the back-office software needs of the E: ras@kogerusa.com
fund industry. KOGER USA
Fully Integrated Fund Administrator consists of three core programs: 12 Route 17 North
~ NTAS, the New Transfer-agency System Suite 111
~ E*TAS, Electronic Transfer Agency System Paramus
New Jersey, NJ 07652, USA
~ GRID, Global Reach Interface Daemon
W: www.kogerusa.com
Other programs, such as PTAS, KIT, and KORS available separately, complement the core
competency of Fully Integrated Fund Administrator.

Misys provides integrated, comprehensive solutions that deliver significant results to

over 1,200 financial institutions globally. Our buyside solutions help asset servicers,
asset managers and hedge funds handle the latest complex products, streamline
processes, reduce costs and improve STP. Misys Summit is our award winning, www.misys.com
multi-asset class solution that boasts 18 years OTC derivatives market expertise. tcm.marketing@misys.com
With extensive OTC buyside coverage and the market leading structured products
module, Misys Summit delivers the solution you need for handling the end to end
process for OTC. We also provide a customisable ASP service for fast implementation
and lower costs.

Building on over twenty years of experience in capital markets and cross-asset software
solutions, Murex introduces Mx Asset Manager - a unique cross currency, cross asset fund
management solution capable of handling the full range of products, from plain vanilla to C: Hélène Desbiez
the most complex derivative products. Business Development Manager
Coupled with a high degree of flexibility and customization, Mx Asset Manager T: +33 1 44 05 32 00
features a multifaceted design catering to the needs of both service providers E: helene.desbiez@murex.com
(prime brokers, administrators, asset servicing providers) and direct clients (portfolio W: www.murex.com
managers for mutual, pension or hedge funds, insurance companies).
With so many new challenges presented to buy-side managers when integrating
increasingly-complex derivatives into their portfolios and funds, Mx Asset Manager
represents a strong and reliable ally for dynamic position keeping and multi-dimensional
risk management in a thriving market.

Odyssey Financial Technologies is an industry leader in the global provision of wealth

and asset management solutions and services to the Private Banking, Mass Affluent and
London Office:
Retail Banks as well as Institutional and Fund Managers. Over 200 financial institutions Martin House
in more than 30 countries have chosen Odyssey solutions. Odyssey focuses on providing 5 Martin Lane
a comprehensive range of components for portfolio management (PMS), advisory London EC4R 0DP U.K.
process, customer relationship (CRM), compliance, risk, analytics and Enterprise Data
Management (EDM). The components are deployed on a single scalable wealth and asset T: +44 (0)20 7621 5800
management platform, facilitating the enterprise-wide implementation of solutions F: +44 (0)20 7621 5899
and data management. Founded in Luxembourg in 1995, Odyssey today has offices in
the key financial centers, including London, New York, Singapore, Zurich, Frankfurt, E: info@odyssey-group.com
Brussels, Geneva, Madrid, Toronto and Tokyo. Odyssey’s operational head office and main W: www.odyssey-group.com
development centre is located in Lausanne, Switzerland. Throughout this knowledgeable
network Odyssey employs over 600 professionals.

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 ISJ Directory of Services ISJISJInvestor
InvestorServices
ServicesJournal
Journal

peterevans is a leading provider of front to back office solutions for the financial services
sector. With 23 years experience peterevans takes a sophisticated and dynamic approach
to assist customers in reducing costs and witnessing an increase in margins by seamlessly peterevans
replacing costly and restricting legacy platforms. peterevans works in a collaborative New Broad Street House
manner and sees clients as partners to help meet all the demands in today’s marketplace. 35 New Broad Street
The xanite product suite offers a highly configurable, flexible and fully integrated, browser London EC2M 1NH
T: +44 (0) 29 20 402200
based, comprehensive front to back solution that complies with message standardization
E: info@peterevans.com
and settlement harmonization. Deployed as a single application or integrated as W: www.peterevans.com
components into your existing platform. Each of the xanite modules can be delivered via an
ASP or self-hosted. Covering: wealth management, custody corporate actions clearing and
settlement private client and on-line stock broking.

Pirum provides a full suite of automated reconciliation and straight through processing
(STP) services supporting Operations within the global securities finance industry. The
company’s on-line SBLREX service encompasses daily contract T: +44 20 7220 0961
compare, monthly billing comparison, mark-to-market & exposure processing, pending F: +44 20 7220 0977
trade comparison, income claims processing and C: Rupert Perry
custody reconciliation. E: rupert.perry@pirum.com
Subscribers to Pirum’s services significantly increase their operational efficiency and A: Pirum Systems Limited
reduce their risk by using Pirum’s solutions, as staff are able to focus on fixing the 37-39 Lime Street
exceptions instead of using their time to check and process routine business. These London, EC3M 7AY
automated processes are more scalable and risk controlled too, allowing W: www.pirum.com
significantly higher volumes to be managed without corresponding increases in
operations headcount.

Princeton Financial Systems (PFS), a 100% subsidiary of State Street Corporation, is a leading
provider of portfolio management and accounting systems, investment compliance, data For more information, visit Princeton
management, and reporting solutions to the global investment industry. Our solutions are
used worldwide by over 430 leading investment managers, custodians, insurance companies, Financial’s website at www.pfs.com or
pension funds, hedge funds, and banks, which manage combined total assets of over $5 www.pfs.aquin.com.
trillion in more than 40 countries.These include ABP, AEGON, AIG, Allianz Global Investors, T: +1 609-987-2400
BNP Paribas, CaIPERS, CACEIS Investor Services, Citi, Commerzbank, Credit Suisse, HSBC F: +1 609-987-9320
Insurance, Metropolitan Life Insurance, Nationwide, Northwestern Mutual, Prudential, RBS, C: Lorne Whitmore, Vice President,
Société Générale Securities Services, and State Street. MIG21, PFS’s award-winning investment Global Sales & Product Management
compliance and risk monitoring solution, optimizes pre-trade and post-trade compliance E: lwhitmore@pfs.com
checking, the administration of regulatory, prospectus, and internal investment guidelines A: 600 College Road East,
along with the consequent resolution workflows. PFS, headquartered in Princeton (NJ), has Princeton, NJ 08540, USA
offices located throughout the United States, Canada, Australia, Singapore, and China as well W: www.pfs.com, www.pfs.aquin.com
as in United Kingdom, the Netherlands, Luxembourg, France, Germany, and Switzerland.

Founded in 2002, Redi2 Technologies is a leading provider of fee billing solutions to the
global financial services industry. Redi2 offers flexible, feature-rich solutions that help
firms streamline operations, improve cash flow, reduce costs, enhance client service and Redi2 Technologies, Inc.
meet compliance obligations. 1771 Broadway St.
Redi2’s flagship fee billing and revenue management solution Redi2 Revenue Manager Oakland, CA 94612
helps financial professionals more easily manage the fee billing process, including client T: +1 (510) 834-7334
setup, multi-currency fee and accrual calculations, invoice and advice generation, E: info@redi2.com
W: www.redi2.com
accrual reconciliation, adjustments and reversals.
Our open APIs and support for industry-standard relational databases ease integration
with third-party solutions, including accounting, performance measurement and CRM
systems.

Netik’s team have spent the past 25 years perfecting the art of bringing
together market, reference, portfolio accounting, performance and risk data For more information please
from disparate sources into a single version of the truth (SVOTTTM). The result visit: www.netik.com
is a highly scalable and sophisticated business data model that has been or email: marketing@netik.com
designed to process all securities and offers a complete model for traditional
and alternative markets.

SimCorp Dimension is a powerful, comprehensive and truly seamless investment

management system. It can handle NAV and other calculations, with complete related
T: +44 (0)20 7260 1900
accounting, for a huge variety of fund structures and product types, including regional
F: +44 (0)20 7260 1911
specialities.
C: Elizabeth Gee, sales director
SimCorp Dimension has been designed from scratch as an enterprise-wide system, of SimCorp Dimension
handling all aspects of the investment management process and related administration E: elizabeth.gee@simcorp.com
functions, consistently. Data is recorded once into a core database so that reporting is W: www.simcorpdimension.com
made easy, there is no reconciliation of data and no duplication of procedures. A: SimCorp, 100 Wood Street,
-By cutting latency in securities processing, our clients are recognising new efficiencies, London EC2V 7AN
reducing costs and increasing throughput
-By streamlining their customer on-boarding processes, our clients are gaining faster
access to fees, increasing customer satisfaction, gaining greater cross-sell opportunities.

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