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Equinoxe closes in on $10b in assets under administration

Global fund administrator Equinoxe Alternative Investment Services Ltd is set to hit the $10 billion mark for assets under administration within weeks, just over five years after launching as a Bermuda start-up.

The company, led by chief executive officer Stephen Castree, now has offices in the US, Ireland and Mauritius, as well as its Hamilton headquarters on Bermudiana Road, and employs around 65 staff, 14 of them on the Island.

Equinoxe services hedge funds, fund of funds, family offices and alternative portfolios of insurance and pension funds.

Mr Castree is confident of achieving further expansion in the near future — but whether that will translate into jobs in Bermuda depends on a number of factors, he said in an interview with

The Royal Gazette.

Equinoxe is winning business from larger rivals as clients are attracted by the customised service that the boutique administrator is able to offer, Mr Castree said.

He has seen an uptick in business in both Europe and the US, and is working toward expansion in the Asian market. In Bermuda, the biggest source of new business is from insurance-linked securities (ILS), which include catastrophe bonds and sidecars.

Like all international companies, Equinoxe has a choice of where to locate new hires, Mr Castree said.

“We will carry on putting people in the most appropriate locations for the work and where we can find and hire the right people,” Mr Castree said.

Finding candidates with the appropriate qualifications and experience within Bermuda was not easy, he said.

“A lot of jobs have been lost on the hedge fund administration side, but many of those people were overseas workers and they’ve now gone,” Mr Castree said. “Overall, the talent pool has been reduced and when we advertise, we only get one or two qualified applicants.

“A lot of people who have the experience are no longer here and after they’ve gone home, the chances of bringing them back are pretty slim.”

He stressed that his own company had never had a problem with getting the work permits it needed from the Immigration Department. However, he felt that the uncertainty and time delay created by the immigration process were factors in the consideration of where to locate new hires, especially when a new client made it necessary to bolster staffing quickly.

In a changing business landscape, he said Bermuda should no longer consider itself as competing against traditional offshore rivals like the Cayman Islands, rather it is competing against the world in a global marketplace, Mr Castree said.

“The trick for Government is how you incentivise jobs being put in Bermuda,” he added. More international business jobs would support local business and local jobs, he added.

Mr Castree has been involved in a collaborative effort between public and private sectors to attract more asset managers to the Island. One of the concepts being worked on is the creation of a seeding platform providing capital for Bermuda fund managers to manage.

“It’s at the capital-raising stage,” Mr Castree said. “It would involve a pool of assets in a seeding fund and an investment team to allocate that money to managers. In order to receive an allocation, you would be required to have a Bermuda-domiciled fund and you would be expected to use Bermuda services as far as possible.”

He estimated that the seeding fund would need to raise at least $75 million to $100 million to attract ten to 15 fund managers. Competition was great and raising the funds would be a challenge, he added.

Bermuda is doing well in the ILS space. About a third of the estimated ILS global market of $15 billion consists of Bermuda special purpose insurers.

That translates into work for companies like Equinoxe, which works with law firms and audit firms to assist in the launch of ILS funds, consults on investment and insurance terminology, structures and accounting.

“The growth in the ILS space is a great opportunity for Bermuda to showcase its skills in asset management to the world and bring the asset management space in Bermuda closer to the globally successful reinsurance market,” Mr Castree said.

There were also opportunities for fund administrators in the private-equity business, he said, particularly with the hole left by the relocation of the JP Morgan private-equity operation away from the Island in June this year.

Now servicing in excess of 145 funds, Equinoxe restricts the growth of its new clients each quarter to maintain its premium service level. Global Custodian ranked Equinoxe the top administrator in North America and Europe.

Equinoxe CEO Stephen Castree (Photo by Mark Tatem)

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Published December 06, 2012 at 12:00 pm (Updated December 06, 2012 at 11:59 am)

Equinoxe closes in on $10b in assets under administration

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