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BNP Paribas Securities Services
B
NP Paribas is scoring exceptionally well among hedge fund in a marketplace in which the margins in fund management
are also shrinking. On price, tellingly, BNP Paribas gets one of
managers exactly where a bank should: banking, mid-
the best scores in the survey.
dle-office operations and cyber-security. “One-stop services
and single contact, very clear team structure and a designated
Weighted
Weighted
average
average
scores scores
account manager can solve your problem [in a] timely [man-
2016 2016 5.96 5.96
2016 2016 2017 2017 2018 2018
ner],” says a client. In the core fund administration
services,
2017 2017 5.94 5.94
5.96 5.96 5.94 5.94 6.19 6.19
PROFILE OF RESPONDENTS
the verdict is bifurcated, with an excellent score for
fund
2018
2018 6.19 6.19
accounting offset by a lower (albeit still impressive) score for
Respondent
Respondent
profile
profile
investor services. In fund accounting, a client
is glad
to
work
By size
By location
Large who
fund
Large fund
with a “ve ry experienced team” and employees
are “loyal 6% 6%
managers
to the company,” while in investor services, managers
a respondent
6%
6%
insists that “BNP is fully capable of handling Medium-
side Medium-
letters, etc.”
24% 24%
sized fund
sized fund
47% 47%
Indeed, the flavour of the comments is redolent
of
a business
Americas
managers
managers
Large
that understands the needs of sophisticated Small
clients
well that
Europe and
47% 47%
fund
Small so
fund
Medium
little needs to be said. In fact, since it completed
the acqui- 47% 47%
managers
managers
59% 59%
47% 47%
Middle East
Small
18% 18%
sition of the Prime Fund Solutions business of Credit Suisse
Asia
Americas
in 2015, bringing single managers as well as Americas
fund-of-funds
to 59% 59%
Europe Europe
and focused
and
the French bank, an alternatives business originally
18% 18%
Middle Middle
East East
on the needs of institutional investors and funds-of-funds
has
Asia Asia
24% 24%
widened its appeal. The strategic conviction, that hedge and
traditional investment funds are converging Weighted
as well
as glo-
Weighted
average
average
scores scores
by service
by service
area area
Weighted average scores
balising, remains intact. As a major custodian, BNP Paribas can
Weighted
Weighted
+/- the +/-
global
the global
offer managers integrated custody and/or depositary
2016
2017
2018
Service Service
area servic-
area
average average
score average
score average
es, asset servicing and collateral management, as well as the
5.96
5.94
6.19
core administrative functions of fund accounting
and service
investor
Client service
Client
6.18 6.18 2.60% 2.60%
services. The French bank also possesses a thriving prime
On-boarding
On-boarding
5.88 5.88 2.80% 2.80%
brokerage arm, creating opportunities to cross-sell securities
Fund Fund
6.6 6.6 6.30% 6.30%
financing and borrowing services, or the more
selective
accounting
accounting combi-
Weighted average scores by service area
nation of these services known as “enhanced Investor
custody.”
Investor In this
1.50% 1.50%
context, the score for depositary services, albeit
delivered
by 6.15 6.15 Service
services
services
area
Weighted
+/- the global
Reporting
Reporting
to clients
to
a minority of respondents, reads oddly. It suggests
that
average score
average
6.3 6.3 4.60% 4.60%
investors
investors
are yet to be convinced by the ability of an in-house
depositary
Client service
6.18
2.7%
to insti-
to
to work with the fund administration arm of Reporting
the Reporting
same
5.92 5.92 1.00% 1.00%
managers
managers
On-boarding
5.88
2.8%
tution in a way that creates efficiencies for them. Reporting
Reporting
Reporting
to
to
5.49 5.49 Fund
-8.70%
-8.70%
accounting
6.60
6.3%
in general is not the strongest area for the bank,
though
regulators
regulators the
scores for reporting to managers, auditors, investors
and
tax
Investor
services
6.15
1.5%
Reporting
Reporting
to
to
authorities are eminently respectable. “They the provide
tax the tax audi- 5.92 5.92 -1.00% -1.00%
Reporting to investors
6.30
4.6%
authorities
authorities
tors with timely responses and adequate information,”
is the
Reporting
to
managers
5.92
1.1%
Reporting
Reporting
to
to
under-stated verdict of one client. BNP Paribas,
in
fact,
has
6.16 6.16 1.30% 1.30%
auditors
auditors
invested in consolidating trade, position, valuation,
redemption
Reporting to regulators
5.49
-8.9%
KYC, AML
KYC, AML
and subscription, performance and other data,
and
presenting
Reporting
to
the
tax
authorities
5.92
-1.0%
and and
5.95 5.95 -1.70% -1.70%
it to managers in self-organising ways across sanctions
mobile
as well as
sanctions
Reporting to auditors
6.16
1.3%
fixed platforms, so this is likely to be a problem
of
awareness.
screening
screening
KYC,
AML
and
sanctions
screening
5.95
-1.3%
Where respondents are unequivocally impressed
is in the mid-
Depositary
Depositary
5.99 5.99 0.00% 0.00%
services
services
dle office, where the French bank is well-placed
to provide the
Depositary services
5.99
-0.1%
right blend of services.
Corporate secretarial services
N/A
N/A
All in all, these scores suggest that BNP Paribas is dealing
Middle office services
N/A
N/A
adroitly with the strategic conundrum set by regulations that
Banking
services
6.50
6.9%
place investors in the first place and central banks that insist
on allocating adequate capital to risk. The post-crisis convic-
Operations
6.25
2.1%
tion that alternative asset managers would gravitate to banks
Cyber-security
6.26
4.5%
with large balance sheets is now being put to the test, as those
Price
6.46
11.0%
same balance sheets make it harder for bank-owned providers
to compete on price with non-bank administrators – especially
Total
6.19
3.3%
58
Global Custodian
The Hedge Fund Annual 2018