NEW YORK (HedgeWorld.com)–There is a move among hedge funds from monthly valuation of the portfolio, long the standard in the industry, to daily valuation of assets, said Jeffrey Bieselin, senior vice president at the Bank of New York.
This trend is limited, however, to portfolios that primarily consist of listed or otherwise easy-to-price securities. Daily valuation is very costly for instruments that are hard to price, like distressed debt, and the benefit is insufficient to justify this cost, Mr. Bieselin explained.
He was describing the outlook for hedge fund administration, speaking at a press conference. Outsourcing of middle- and back-office functions, over and above the services administrators have traditionally provided, is another development he identified.
A third trend is the growing importance of funds of funds, which are becoming a larger market for administrators as their assets burgeon with the inflow of institutional money. Funds of funds have different needs, requiring new capabilities in administration.