Aging Dodd-Frank Act Brings More Robust Private Fund Data

It’s been three years since the Dodd-Frank reforms were signed into law. Title IV of the act included expanded registration and disclosure requirements for registered investment advisers. Last year, we wrote an analysis of the top Private Fund Administrators. Unsurprisingly, the data revealed that some of the most prominent financial institutions were among the most widely used administrators, with firms like State Street, JP Morgan, Citigroup, and others leading the way.

With another year of data now available for analysis, we can begin to explore trends and year-by-year changes in these disclosures. Since last year, not much has changed with respect to private fund administrators. The same group of financial institutions round out the top 10 in both 2012 and 2013. However, there was a slight shuffling at the bottom.

The two charts below present a side-by-side view at the top ten private fund administrators in 2012 and 2013, based on an analysis of Form ADV.

RIA 2013 Table5

The top six private fund administrators held the same places in 2013, but there were some small changes in market share. State Street (1st) and SS&C (4th) increased their share of market, while BNY Mellon (3rd) and SEI (6th) were flat compared to the prior year. Rounding out the top six, CITCO (2nd) and Citigroup (5th) both lost a little ground in 2013, but still maintained their same relative positions on the list.

There were bigger changes at the bottom, with a couple of firms jumping to higher positions. Northern Trust gained 171 additional funds compared to this time last year, enough to overtake JPMorgan Chase for 7th, and US Bank bumped down Morgan Stanley to take 9th place.

According to SEC Chair Mary Jo White, “the hedge fund industry as a whole is experiencing dynamic change — moving from what some would say was a secretive industry, to a widely-recognized and influential group of investment managers.” As the required disclosures of the Dodd-Frank Wall Street Reform and Consumer Protection Act continue to accumulate, a more comprehensive database will emerge, providing further insight and analysis into the industry. These disclosures should benefit investors, and we will continue to monitor them.