Fund admins could enter cap intro space
Fund administrators could increasingly enter the capital introductions space, to offer a service to smaller or emerging managers, a senior executive at Apex Fund Services has said.
Apex recently launched a cap intro service of its own in what it hopes will help its hedge fund, private equity and long-only clients raise assets.
“Prime Brokers don’t necessarily offer cap intro services to all of the hedge funds they work with, particularly the sub $500 million managers. We saw an opportunity to offer a service to the managers we administer, giving them some structure around these activities, even if they are a small team” said Leah Cox, managing director at Apex Fund Services’ cap intro business.
Apex is planning to launch an online portal aimed at its investor contacts containing details of its manager clients. These investors will be able to review these managers and request information from them. The firm will also provide managers with networking events and road-shows, as well as introductions to prospective investors.
Sceptics point out fund administrators will never be able to compete with the primes on cap intro while one commentator said he doubted they would want to be subjected to the added regulatory oversight of being a registered broker dealer.
“Admittedly, we do not have the same level of resources of a bulge bracket prime yet, but there is absolutely no reason why banks should have a monopoly over cap intro services,” said Cox.
Perhaps a differentiator for Apex is its global network of 33 offices globally - something Cox said would benefit its cap intro services. “We are a truly global business with boots on the ground in a number of countries. We know investors in those countries, and this can be leveraged to help managers raise money,” she said.