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Asset Servicing

Alternative assets under administration up 10.2% in 2017 — eVestment

Alternative assets under administration as of Dec. 31 totaled $8.42 trillion, up 10.2% from the prior year, eVestment said in a survey released Tuesday.

SS&C GlobeOp ranked first among firms with total alternative assets under administration of $1.52 trillion as of Dec. 31. State Street Alternative Investment Solutions was second with $1.27 trillion, followed by Citco Fund Services at $1.156 trillion, and Bank of New York Mellon (BK)'s alternative investment services business at $912.9 billion.

The rankings were identical as the previous year, as of Dec. 31, 2016, when SS&C GlobeOp ranked first at $1.32 trillion, boosted by acquisitions that year of Citigroup's alternative investor services business, Wells Fargo Global Fund Services and Conifer Financial Services. State Street Alternative Investment Solutions was second with $1.254 trillion, followed by Citco Fund Services at $1.047 trillion and BNY Mellon's alternative investment services business at $775 billion.

Among the different asset classes, Minkyu Mike Cho, senior research analyst at eVestment, said in an interview the most interesting increases were among hedge fund assets under administration, which surpassed $4 trillion in AUA for the first time as of Dec. 31, 2017, with $4.21 trillion, up 14% from a year earlier.

"The results from the hedge fund segment were the most interesting for the year just because as opposed to private equity or real assets, outsourced third-party fund administration was kind of deeply entrenched in the hedge fund space," Mr. Cho said. "A growth of 14% year-over-year was pretty stark. A piece of that was asset growth and investor flows into hedge funds. (Another was) the shadow administrator, which is essentially hedge fund firms duplicating the services to a certain extent and that being kind of a large effect on the result."

Private equity and debt assets under administration totaled $2.29 trillion as of Dec. 31, up 18.2% from the previous year, the fastest-growing asset class in the survey as measured by aggregate AUA growth and the growth of the median firm. The median firm performed even better, with growth of 25.1% year-over-year.

Real assets AUA totaled $691 billion as of Dec. 31, up 16.9% from the year before.