Fund Administration: LaSalle muscles in on administration
LaSalle’s hedge fund administration arm now has more than $13 billion in assets, up from $6 billion at launch in March earlier this year. It’s an impressive accrual of assets given the already crowded administration space and indicates a need for administrators with experience in structured products and CDOs.
Allison Smaluk, LaSalle Global Fund Services: Administrators lack systems to cope with structured products
"We saw a lot of independent administration firms taking on hedge funds regardless of whether they could cope with their strategy," says Allison Smaluk. US head at LaSalle Global Fund Services. "Long/short equity was typically the strategy administrators were and are used to serving, and when increasingly managers would start to use structured products, administrators did not have the systems that could cope." LaSalle has entered the administration business from the opposite side to most administrators. The firm dominates the structured product trustee market. At the end of the first half of 2007, the firm was number one in the CDO market, number one in CMBS and fourth in RMBS (as ranked by Asset-Backed Alert). "It made sense for us to enter the market from this angle. We were trustee to structured products users, then last summer we started offering financial reporting for managers, and a natural follow-on was to take that knowledge and launch a full-service hedge fund administration service," says Smaluk.