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2009 The Top Hedge Fund Service Providers
Overview | Top Service Providers | By Category | Methodology |


Overview

Morgan Stanley, BNP Paribas Are Hedge Funds’ Favorite Brokers

Morgan Stanley is the prime broker preferred by hedge fund managers with more than $1 billion in assets in the fifth annual Alpha Awards, which ranks the top service providers as chosen by managers of hedge funds large and small.
 
BNP Paribas is the broker of choice among managers of funds with less than $1 billion.

The awards, which originated in Institutional Investor’s sister publication Alpha, rank service providers in five broad categories: accounting, administration, law firms (onshore and offshore), and prime brokerage.
 
Administrators — regardless of what size hedge funds they service — report that business has never been more brisk, even though total hedge fund assets are still down about $400 billion from their 2008 peak of $1.9 trillion, according to Chicago--based Hedge Fund Research. The unprecedented $65 billion investment fraud perpetrated by Bernard Madoff underscored the importance of independent, third--party -administration.

“Largely because of events such as Madoff and the collapse of Lehman, -there’s a drive from investors to see self-administered funds have third-party administration involved,” says Cory Thackeray, head of Goldman Sachs’ administrative ser-vices group, which is ranked No. 1 for a third straight year among managers of large hedge funds.
 
The financial crisis has also sparked a surge in business for law firms serving the hedge fund industry. With fund launches down precipitously and liquidations at record levels, restructuring has become the name of the game.
 
“This was a year in which you needed, as a hedge fund lawyer, to have not just legal experience but real business experience to add that value to clients,” observes -Steven Nadel, one of seven partners in the investment management group at Seward & Kissel, which vaults from fourth place to first as the onshore law firm of choice among managers of bigger hedge funds.
 
Administrators and attorneys aren’t the only professionals to see their businesses surge despite the downturn in the hedge fund industry. Accountants are also reporting increasing demand from clients.
 
“Investment managers communicated more frequently this year than in the past,” says Howard Altman, principal in charge of financial ser-vices at Roseland, New -Jersey–based Rothstein Kass & Co., the top choice of larger funds for a third consecutive year. “That was necessitated by both sides: Investment managers wanted to make sure that their investors were aware of their views on the market, and investors obviously needed some comfort as far as where things stood.”
 
To find out which service providers hedge funds consider the best, click on the Top Service Providers link above.
 
For information about how these rankings were compiled, click on Methodology.


For more information about these rankings, please contact Michele Bickford at mbickford@iiresearchgroup.com.



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