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It is a spinout of the existing middle and back office services that for 20 years have supported Black River Asset Management, and before that CargillÆs proprietary capital markets trading. LaCrosse will continue to look after Black RiverÆs assets and it opens with $6 billion in assets under administration.
It has had a presence in Asia for almost 14 years as part of Cargill Global Capital Markets, then as Black River. It provides the range of hedge fund operational services, namely, middle-office outsourcing, operations and administration and operates a comprehensive independent valuation capability.
ôFirst and foremost, weÆre here,ö says co-CEO Stuart Feffer, who runs the business with Christopher Kundro. ôThe fact is that there are relatively few providers in Asia, one provider has most of the market share, and most of the others are new to the region.ö
Adds Kundro: ôToday we have 20 people in our Singapore hub and we expect to double it over the next year, mainly sourced through the same channels weÆve been using successfully for years.ö
Feffer and Kundro have worked together for 10 years, most recently at BearingPoint and Capco. Within the alternatives community they are best known for setting up hedge fund platforms and for their authorship of studies analysing operational risk.
La Crosse is the latest arrival to the hedge fund administration scene. There has been an inflow of new hedge fund administrators in Asia in the last 12 months, including Citigroup, Bisys, and the impending rumoured arrival of JPMorgan Chase.
ôFunds have been very vocal in stating that the lack of fund administration capacity has negatively impacted the growth of the hedge fund market in Asia,ö says Feffer. ôItÆs analogous to trying to build a city or raise a new building without having a stable and scalable infrastructure in place. Consequently, the hedge funds, investors, prime brokers and others in the hedge fund community that we have spoken to are excited that we are offering our services in Asia.ö
LaCrosse will also facilitate custodian and prime brokerage settlement. In terms of their hedge fund focus, their aim is to specialise on funds that operate with more complex strategies.
ôNearly all of the fund administration capabilities in the market are primarily built to support long/short equity funds,ö Kundro notes. ôSupport of complex or non-equity strategies is limited to non-existent at most fund administrators located in Asia. We can process, account for, and value instruments including exchange traded equities, fixed income, currency, commodities and related derivatives, including those that require modeling. The lack of support for these types of strategies has slowed the evolution of the Asian hedge fund market from basic long/short equity funds to more complex strategies and investments.ö
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