Bermuda-based global hedge fund administrator Fulcrum Ltd. has accepted a $57 million investment from 3i Growth Capital that secures its independence from rivals seeking to consolidate.

It also gives Fulcrum the financial clout and backing to do business with multi-billion dollar hedge funds and expand its products and geographical reach further into the US, Europe, Asia and the Middle East.

Pertinent for Bermuda is the fact that 3i are no strangers to the world or reinsurance, being the lead investor in the $620m Singapore-based Asia Capital Re start-up last year, which was the first pan-Asia independent reinsurer.

The deal between Fulcrum and 3i will see 3i's Akshaya Bhargava replace Glenn Henderson as Fulcrum's chief executive officer. However, there will be no break-up of the Fulcrum management team and Mr. Henderson will assume the role of chief sales officer.

During the past six months the phones have been ringing "off the hook" at the Fulcrum offices with potential bidders; including large banking institutions and competitors. But it was the 3i investment that most impressed Fulcrum and fitted best with the company's vision of its future as an independent hedge fund administrator able to "grow revenues and profits through an organic increase in funds under administration, new middle-office service offerings and international expansion".

Keeping its independence was key, explained Fulcrum chief financial officer Tim Calveley. Speaking to The Royal Gazette, he said: "We have a great business model and we wanted to keep that.

"We keep our name and our reputation. But now we also have a big name behind us and we can go after the multi-billion dollar hedge funds that used to consider us too small (to do business with)." The 3i injection of capital also gives Fulcrum the ability to invest in its business model and technology, expand its product range and boost its US business, while tapping into Europe, Asia and the Middle East.

Unlike a straight-forward venture capital injection of dollars, the 3i deal will be a "hands-on" link-up, with 3i's Mr. Bhargava becoming CEO.

He has been with the company for a year and has extensive experience in financial services and has a strong track record for growing companies in the business process outsourcing industry.

His career includes a recent spell as CEO of Progeon, India's seventh largest business process outsourcing services company, which he led from start-up to a company with $86 million in revenues, over 7,000 employees and 22 Fortune 500 customers in less than four years. Before that he spent 22 years in leadership roles at Citibank locations in India, the Czech Republic, and the UK.

Since joining 3i, Mr. Bhargava identified and led two business process outsourcing investments. He said: "Fulcrum is an established outsourced service provider of fund administration and middle office services and has built high quality delivery capacity for new business with production offices in Canada and India.

"I feel that Fulcrum is one of the most exciting companies on the market and 3i will be instrumental in leveraging this investment by drawing on our direct management expertise and global footprint to augment and expand Fulcrum's service offering in Europe and Asia."

Fulcrum CFO Mr. Calveley recognises the benefits of bringing in Mr. Bhargava. He said: "All the Fulcrum management team is staying on board. What the new CEO brings is a background in scaling and control. We had no-one on our team that did that."

He added that having such a close association with 3i, a big household name in Europe, would be helpful for the company as it sought further business in Europe and London where the hedge fund business is rapidly approaching the size of the US market.

Current CEO Mr. Henderson said: "3i's global network, corporate connections, and extensive experience in growing businesses will help Fulcrum achieve its potential.

"Fulcrum will retain its independence, delivery model, technology platforms, and dedicated client team approach, scaling these attributes significantly to continue providing a best-in-class hedge fund administration service."

Whitney Bower, a partner with 3i, said: "Our heritage is in growing significant international businesses, so we are thrilled to have the opportunity to build a differentiated company in a large and growing market, with strong management leadership.

"Fulcrum, in particular, has an attractive business model, a superior-quality proprietary technology platform, the ability to support hedge funds' complex strategies, and personnel in place to advance operations."