Alternative Assets Under Administration Rose Nearly 17% in 2014

The survey found that institutional investors and globalization were driving much of the increased asset growth for alternative fund administrators.

Institutional investors insist on transparency, while investment managers look for expertise in local and global regulatory and compliance issues as their investment strategies become more global.

Almost all participating administrators expected the number of firms to decline as merger-and-acquisition activity continues to consolidate the administration industry.

They offered varying opinions on the drivers for additional M&A activity, but most agreed on the need for a global footprint and the ability to absorb the ongoing and rising costs of providing regulatory reporting services.

According to the survey, the major trends for the fund administration sector were price competition, cost pressure from more robust offerings and clients' desire for on-the-ground knowledge.

Respondents also noted potential for further industry segmentation between firms servicing the needs of very large managers and those catering to emerging investment managers.

As a group, administrators in the survey were most optimistic on their growth prospects in North America and Europe.

Their expectations for North America, Europe and Africa increased relative to Asia/Pacific, Latin America and the Middle East compared with results in last year's survey.