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Garrick Smith

Harnessing the strength of European depositaries


Switzerland is a key part of the global business model at BNP Paribas Securities Services, whose successful acquisition last June of Credit Suisse Prime Fund Services has helped it to become an industry leader in alternative fund administration. 

With a depositary bank network spanning 15 European jurisdictions, EUR1.2 trillion of assets under depositary and 1.8 trillion of assets under administration, BNP Paribas Securities Services is leveraging its scalability and breadth of expertise to bring support to Switzerland's fund management community; both traditional and alternative. 

Commenting on the PFS acquisition, Garrick Smith (pictured), Head of BNP Paribas Securities Services Switzerland, emphasises that it demonstrates "our commitment to the alternative investment management space as an administrator and fits with where we see the market going". 

"We see further consolidation taking place among fund administrators. One of the main drivers of this is the convergence of alternative and traditional fund management. We have acquired some high profile Swiss hedge fund managers, and servicing them will help us to support our traditional clients as they increasingly move into the alternatives space. We firmly believe that we are in line with where the industry is headed."

Regulation is certainly proving to be another important catalyst behind consolidation among fund administrators, which Smith is quite sure will continue to play out as a theme over the next few years; potentially reducing the number of administrators in Switzerland to a smaller number of global operators. 

"The impact of regulation is restricting the competitiveness of administrators whose operations are more fragmented. At BNP Paribas Securities Services, we focus on staying ahead of regulation and understanding what needs to be reported; be that in relation to EMIR, AIFMD, UCITS or FATCA. Across the entire regulatory landscape, managers are looking for service providers that have broad investment capabilities. This puts us in a strong position to be seen as a truly viable solution to our clients, not just in Switzerland but across our entire network," says Smith. 

Back in 2013, BNP Paribas Securities Services extended its depositary banking services into Switzerland. Leveraging its wider pan-European and global network quickly enabled the firm to support both traditional and alternative fund managers as their strategies converged in response to investor demand. 

"As we roll out our administration capabilities into Switzerland we are looking to leverage off the back of a substantial team with scalability, experience and global reach. That appeals to a lot of managers and since 2013 we've experienced rapid growth. We started with FoHF managers but now we are servicing single hedge fund managers, and traditional long-only funds. This further underscores the convergence trend underway," explains Smith, who is in no doubt that further consolidation will occur.

"The cost of doing business in the fund administration space is rising, which is putting pressure on administrators who don't have the same scale, breadth of offering or balance sheet as BNP Paribas Securities Services," adds Smith. 

The firm recently unveiled its hedge fund data management solution – DNA Hedge Fund Explorer. This is a data visualisation tool, designed in conjunction with clients, which allows them to interface with their data in a dynamic and meaningful way. 

"DNA – Hedge Fund Explorer is a fully interactive tool that enables managers to design and create fully customisable data interfaces. This is helping us build more dynamic relationships," concludes Smith

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