Apex predicting a bright future for offshore fund sevrices

Apex Fund Services, one of the world’s largest independent fund administration companies, has published some interesting findings from its global research into how changes in the asset management industry will impact domiciliation and fund servicing patterns from 2012 to 2015.  The findings were drawn from interviews carried out on Apex's behalf between June and October 2011 with 75 fund managers and 25 investors located across the globe. 

There has been much speculation about the impact of the financial crises and regulatory initiatives such as the AIFM Directive and the Dodd-Frank Act on the offshore funds industry in general, and the offshore world in particular.  Many expected that these factors would have an adverse impact on the offshore centres, but in fact the research carried out by Apex seems to suggest the opposite.  Key findings were that:

• Investors will have more influence on managers’ domiciliation and fund servicing decisions, particularly in the hedge funds arena, where investors are predominantly institutions rather than wealthy individuals;
• Offshore centres will prosper and gain market share - something which seems to have become more pronounced since the European financial crisis has worsened, as the offshore financial centres are seen as areas of stability;
• Greater specialisation in fund jurisdictions is anticipated  offshore centres will have to have a particular niche to thrive, and there will be increased "clustering" around those centres;
• There will be consolidation of service providers - particularly amongst fund adminstrators, where there is a move towards the bigger service providers; and  
• Non executive directors will play an increasingly important role on funds, and investors will expect to have more visibility regarding the composition of the Board.

The findings of the survey are bound to be welcomed by the offshore centres, who have successfully fought of threats to their business from legislative and political initiatives in the onshore centres.

The full survey can be accessed on http://www.apexfundservices.com/.