Blog

Summer is now over – unofficially, at least – and the private fund industry in the US is now back in full swing for what is the home stretch of the year.

So, with the mid-year slowdown behind us, for our blog post this month, we thought we’d check in on the current state of which service providers have been hired by new funds identified from Form ADV’s filed in 2024 so far. We’re also including the overall league table – so, older funds that were previously on the adviser’s Form ADV document - to see if there is anything interesting in terms of firms taking or losing share when it comes to new funds.

We’re looking at administrators, auditors, custodians and prime brokers for this one; we’re also using Gross Asset Value (GAV) of the funds as the league table position determinant. Data is used for the period up to and including 9/2/24.

Administrators

The top five fund administrators for new funds identified on Form ADVs submitted this year are well-known. But what is notable is the gap between State Street, which occupies first place with a GAV of $99.2bn, from US Bank, which holds second place with $36.9bn – almost three times the size.

The biggest mover among the firms nearer the top of the league table is US Bank. Overall, the firm ranked tenth, but is second in the table for new funds.

6,451 new funds representing a GAV of $518.6bn and 72,341 funds in total representing a GAV of $23,765.2bn were filed on Form ADVs submitted since January 1 this year that referenced their administrator.

Figure 1: Top Five Fund Administrators of New Funds Identified from 2024 Form ADV Filings (GAV)

Figure 2: Top Five Fund Administrators of All Funds Identified from 2024 Form ADV Filings (GAV)

Auditors

No-one should be surprised by the league tables at the auditor level. Even for new funds identified on the Form ADV, the big four dominate. The only surprise here, perhaps, is the extent to which they do: in both cases, 80% of all funds are audited by one of the big four. That said, for new funds, the total penetration of the big four was 84%, down from 89% of all funds. Could this be the beginning of a trend?

4,434 new funds representing a GAV of $519.3bn and 70,972 funds in total representing a GAV of $28,434.6bn were filed on Form ADVs submitted since January 1 this year that referenced their auditor.

Figure 1: Top Five Fund Auditors of New Funds Identified from 2024 Form ADV Filings (GAV)

Figure 2: Top Five Fund Administrators of All Funds Identified from 2024 Form ADV Filings (GAV)

Custodians

There is a similar story playing out in the custody world. Market share is not as clear here given that many advisers list multiple custodians for their funds on their Form ADV, but there are two notable differences at the new fund level, with State Street coming in third, up from eighth in the overall table, and Barclays coming in fourth place, moving up from seventh overall. Additionally, the market share of the top five providers at the new fund level is significantly lower than that of the overall picture.

5,721 new funds representing a GAV of $587.9bn and 84,589 funds in total representing a GAV of $26,528.5bn were filed on Form ADVs submitted since January 1 this year that referenced their custodian.

Figure 1: Top Five Fund Custodians of New Funds Identified from 2024 Form ADV Filings (GAV)

Figure 2: Top Five Fund Custodians of All Funds Identified from 2024 Form ADV Filings (GAV)

Prime Brokers

While specific to the hedge fund category, the prime brokers league table still sees the ‘brand names’ atop both lists. Like the custodian category, hedge funds can, and do, utilise multiple primes, so the market share does not exclude other firms. Still, as in some of the other categories, the market share of those firms atop the overall league table is generally much higher than those atop the new funds table.

1,097 new funds representing a GAV of $162.0bn and 9,904 funds in total representing a GAV of $9926.0bn were filed on Form ADVs submitted since January 1 this year that referenced their prime broker.

Figure 1: Top Five Prime Brokers of New Funds Identified from 2024 Form ADV Filings (GAV)

Figure 2: Top Five Fund Prime Brokers of All Funds Identified from 2024 Form ADV Filings (GAV)

That the big names continue to dominate the league tables in the four categories above should be a surprise to no-one; private fund managers tout their use of ‘brand name’ service providers as a middle and back-office differentiator, hoping that the potential investor feels more comfortable and confident investing in private funds that have an ecosystem supported by these so called ‘blue chip’ providers.

It is clear to see that the admin category is the one where the firms atop the leaderboard have the smallest market share. Regular readers of our blog might recall last month’s piece, where we offered our thoughts on the current state of that category specifically. However, what is notable about the data above is that in every category, the total share of the top providers is lower for new funds than it is overall.

Time will tell as to whether other firms end up taking more share or whether this most recent year is an aberration. And it must be emphasized that the data is only for new funds listed on Form ADVs filed so far this year; with four months still to go, much can change.

Still, we’ll be keeping a keen eye on this as we enter the home stretch of 2024 to see if this is indeed the beginnings of a trend in the private funds space.

*The data used in this article comes directly from the SEC’s Form ADV filings. 9AT does not edit or override data, even when it may appear that a mistake has been made by the filer, due to our data ethics and methodology policy.

Editor's Picks:

• Why Hedge Funds Are Pouring into Energy Right Now
• US pension funds increase private credit exposure for 2025
• Dear NFL, Let Fans Invest in Teams Too
• Real Estate in Focus: Signs of Recovery After the Shocks
• Silicon Valley’s elite rattled by prospect of tax on unrealized gains