BNY Mellon's Pershing Unit Releases New Whitepaper Focusing on Outsourcing Solutions for Hedge Funds

BNY Mellon's Pershing Unit Releases New Whitepaper Focusing on Outsourcing
Solutions for Hedge Funds

JERSEY CITY, N.J., Oct. 5 /PRNewswire-FirstCall/ -- Pershing LLC, a BNY Mellon
company, and Aite Group LLC have published a new whitepaper that examines
critical hedge fund operations and provides managers with best practices and a
systematic framework for helping them select and effectively manage
relationships with third-party outsourcing solution providers.

The whitepaper entitled, Fueling Growth: Outsourcing Solutions for Hedge
Funds, is available through Pershing Prime Services and BNY Mellon Alternative
Investment Services. According to the report, an increase in client
redemption requests is threatening the viability of even the most well-managed
hedge funds. Many fund managers are taking action by reassessing their
overall investment strategies and evaluating their relationships with key
service providers, such as those with prime brokers, fund administrators and
information technology companies. Hedge funds must consider a multitude of
factors to help make an informed decision on establishing an outsourced vendor
relationship, including cost, evaluating disparate information, balancing
internal resources, prioritizing short- and long-term business goals and
establishing appropriate relationship metrics. Key findings from the
whitepaper include:

-- Choosing the Proper Outsourcing Model - A majority of hedge funds have
favored the approach of implementing a hybrid outsourcing model
because
it provides them with operational flexibility to meet short-term goals
using third-party service providers for some key functions, while
allowing the firm to develop internal capabilities for long-term
expansion;

-- Smaller Hedge Funds Challenged by Resource Restrictions - The hedge
fund
market is dominated by small- and mid-size funds, many of whom lack
expertise in specific functions and have limited resources. These
funds
often opt to outsource a significant portion of their functions to
third-party solution providers and to their prime broker. Smaller
hedge
funds should also consider outsourcing essential business functions
including legal, accounting, administrative and back-office-related
tasks, such as clearing and trade reconciliations;

-- The Role of the Prime Broker - Most leading prime brokers have
seasoned
internal consulting teams who have relationships with a broad array of
service providers--such as law firms, real estate agencies, recruiting
firms and software vendors--and can facilitate introductions with
various vendors who can potentially meet the needs of the hedge fund.
Hedge funds should consider seeking out their prime broker's counsel
before establishing a new relationship with a third-party firm; and

-- Consider Disaster and Recovery Planning in Vendor Selection - The
stability of a third-party solution provider should be an important
consideration for hedge funds as it relates to their disaster and
recovery planning. As hedge funds rely more heavily on outsourced
services, they should execute proper due diligence on a vendor's
financial viability, technology capabilities, contingency around
business continuity and disaster recovery, management and customer
service.

To help hedge fund managers better understand business continuity and disaster
recovery planning processes and principles, Pershing Prime Services, in
collaboration with Eze Castle Integration and its colleagues across BNY
Mellon, has developed a guidebook entitled, Establishing Business Continuity
and Disaster Recovery Plans: A Hedge Fund Manager's Guide. The guidebook
provides fund managers with strategic insights into creating thorough plans
that may help minimize financial loss and the negative effects of downtime on
their firm's strategic plans and operations.

Craig Messinger, managing director of Pershing Prime Services, said, "It is
important for hedge funds to develop a thoughtful, long-term outsourcing
strategy to ensure that its needs for support during various stages of the
fund's lifecycle are closely aligned with its goals and objectives to serve
investors well. Employing this type of approach will enable hedge fund
managers to focus on generating profitable returns for their clients and help
them grow their businesses in a more productive manner."

Sang Lee, managing partner at Aite Group LLC, added, "Substantial benefits
exist for hedge funds that develop strong outsourcing relationships across
their businesses. However, selecting the right vendor relationship is a
complex process. It is critical that fund managers develop a thorough process
to understand their own needs as well as evaluate vendor relationships for
cultural fit and long-term continuity."

Pershing's parent company, BNY Mellon, also provides a wide range of
administration services to hedge funds, funds of hedge funds and private
equity assets through BNY Mellon Alternative Investment Services, one of the
world's leading providers in this market segment with more than $200 billion
in hedge fund assets under administration. In addition to hedge fund
administration, BNY Mellon offers a wide range of accounting, cash management,
collateral management, custody, asset management and wealth management
services to the hedge fund industry.

Pershing Prime Services delivers an unconflicted, comprehensive suite of
global prime brokerage solutions, including extensive access to securities
lending, dedicated client service, robust technology and reporting tools,
worldwide execution and order management capabilities, a broad array of cash
management products and the integrated platform of BNY Mellon. Pershing Prime
Services is a service of Pershing LLC. A copy of Pershing's new whitepaper
and guidebook, and additional information regarding Pershing Prime Services'
capabilities and solutions, can be found by visiting
www.pershingprimeservices.com.

Pershing LLC (member FINRA/NYSE/SIPC) is a leading global provider of
financial business solutions to more than 1,150 institutional and retail
financial organizations and independent registered investment advisors who
collectively represent approximately five million active investors. Located
in 20 offices worldwide, Pershing and its affiliates are committed to
delivering dependable operational support, robust trading services, flexible
technology, an expansive array of investment solutions, practice management
support and service excellence. Pershing is a member of every major U.S.
securities exchange and its international affiliates are members of the
Deutsche Borse, the Irish Stock Exchange and the London Stock Exchange.
Pershing LLC is a BNY Mellon company. Additional information is available at
www.pershing.com.

BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation.
BNY Mellon is a global financial services company focused on helping clients
manage and service their financial assets, operating in 34 countries and
serving more than 100 markets. The company is a leading provider of financial
services for institutions, corporations and high-net-worth individuals,
providing superior asset management and wealth management, asset servicing,
issuer services, clearing services and treasury services through a worldwide
client-focused team. It has $20.7 trillion in assets under custody and
administration, $926 billion in assets under management, services $11.8
trillion in outstanding debt and processes global payments averaging $1.8
trillion per day. Additional information is available at www.bnymellon.com.

SOURCE BNY Mellon

Michael Geller of BNY Mellon, +1-201-413-4179, mgeller@pershing.com