Drew Douglas, newly appointed head for the local office of one of the Bank of Bermuda's most significant profit generators, Global Fund Services, this week cited factors ranging from the bank's investment in technology to the absolute return strategy of the hedge fund managers that the bank provides services to, as being behind the the division's financial success.

Global Fund Services (GFS), as the name would indicate provides fund services, from offices across the globe. Besides the Bermuda office - which alone has $20 billion in assets under administration and 165 staff - there are GFS offices in Bahrain, the Cayman Islands, Dublin, Guernsey, Hong Kong, Isle of Man, Japan, London, Luxembourg, New York, Singapore and South Africa.

In particular, the bank provides specialist asset managers - from hedge funds, multi-manager funds, private equity funds, traditional funds, emerging market funds, institutional custody and pension funds - with a range of services including fiduciary services, accounting and valuation, custody, banking and treasury, shareholder services including due diligence checks on potential investors and on the US side, tax services.

The division is clearly one of the bank's success stories with an established track record of significant contribution to the bottom line. The bank's release of its third quarter results this week showed that was certainly the case in the third quarter with GFS posting $37.4 million in non-interest income for the bank and accruing $113 billion in assets under administration by the end of the period.

Mr. Douglas, who two weeks ago took over from Allen Bernardo as head of Global Fund Services Bermuda, told The Royal Gazette the division's success could be largely attributed to four factors.

The first factor cited by Mr. Douglas was "the success of our clients in raising assets over the past years" and secondly, he pointed to the bank's "focus on absolute return managers that have performed well during down markets".

Absolute return is a hedge fund term indicating the manager's goal of a risk-adjusted absolute return, as opposed to traditional investment vehicles which aim to outperform a standard market benchmark such as the S&P 500.

Mr. Douglas also cited "proactive" staff as being key to Global Fund Services' success as well as "positive new business flows stemming from a commitment over the past year to role out new technology under our SOLAR programme."

SOLAR was launched by the bank in 2001 and stands for Strategic On-Line Accounting and Reporting team. As a specialist technology unit, SOLAR oversees the development of technology solutions including an automated trade reconciliation platform, hedge fund accounting platform, US investor/partnership platform, GFSTrade, GFSFunds.com, GFSOnline and Offshore Investor Platform.

Mr. Douglas, a Bermudian who returned to the Island after being seconded by the bank to GFS offices in both New York and London, said hedge funds and fund of funds are where GFS is currently seeing the greatest growth.

Mr. Douglas, who is also responsible for global product development services for GFS, was previously responsible for GFS sales and client relationship activities throughout Europe. He has been with the bank since 1992 when he joined as a management trainee and worked on the Fund of Funds lending desk and in the corporate banking credit division. After starting off in the Bermuda office, Mr. Douglas was posted to New York as business development manager. During a three-year tenure there, Mr. Douglas specialised in hedge fund administration and driving the bank's US-based alternative fund business.