In 2012, Nikolaos Perros was brought in by Citco as global head of private equity and real estate fund services to increase Citco’s presence in private equity and real estate fund administration. Administrators typically provide fund accounting, investor reporting services, tax and corporate services and other support for running an investment fund.
Since then, Citco’s private equity and real estate group has increased from about 150 to about 330 people globally. The private equity and real estate line of business now works with more than 100 unique managers with about 500 funds.
“We’ve invested in it pretty heavily and we’re looking to further establish our reputation that is already great in the hedge fund space,” Perros said in a phone interview.
Perros is seeing increased interest around the creation of hybrid funds — for example, a hedge fund trading strategy contained in a closed-end vehicle aimed at different types of credit investments.
“Managers are trying to tweak the risk-return lever associated with the traditional funds that they manage to meet the ever-expanding needs of an investor base that is seeking diversification, preferably with a manager that those same investors have invested with over a long period of time,” Perros said.
In real estate, core open-ended funds remain popular. These are pools that invest in a class of property that’s already developed, fully occupied and has a predictable return. “Large institutions and insurance companies want to get into these because they want a steady dividend,” Perros said.
LP demands and cybersecurity are two other factors stoking growth in the external fund administration business.
“Nowadays, LPs want a huge amount of data every month,” Perros said. “This has complicated the job of the GP immensely.”
With cybersecurity, Citco offers longstanding solutions and expertise as regulators continue to encourage GPs to protect themselves.
“We’ve spent a lot on technology,” Perros said. “With cybersecurity, we offer managers the opportunity to leverage the investment we’ve made over the past 10 years to ensure that our systems are world-class. We’ve been dealing with it for a long time. Our business is about our information staying safe.”