Managed acct outsourcing deals seem to have grown thin on the ground. New York-based Edgewood Management has outsourced its separately managed account (SMA) processing to SEI.

Oaks, Pa.-based SEI provides account administration, performance calculation and reporting, account and trade reconciliation and manager-trade support for Edgewood's institutional, private client and retail separate accounts.

Increasing scrutiny

"We've experienced significant growth, and by relying on SEI's operational infrastructure, we've been able to meet that growth without undue business stress and the need to add more resources," says Edgewood's CFO Faust Rotundo. "Additionally, teaming with SEI has demonstrated that we have an operating environment that can withstand investors' increasing scrutiny."

Big-cap growth shop Edgewood manages about $6.5 billion.

Besides SEI, firms that opt for outsourced approach to SMA-processing can turn to units run by Citigroup, JPMorgan, PNC and Market Street Advisors.

About 40 SMA-processing deals have been made public in the past 13 years, with more than half of them announced since early 2005. Looking at deal flow through early 2007, it would seem that SEI and Citi had pulled ahead of the big-name pack with JPMorgan running third.

Since then though, Edison, N.J.-based Market Street Advisors -- the only SMA processor whose offerings aren't ancillary to larger mutual-fund, institutional-account and hedge-fund operations -- says it has set the pace. Meanwhile SEI hasn't publicized many SMA-processing deals since early 2008, when it landed Berwyn, Pa.-based Turner Investment Partners.

SEI's Investment Manager Services unit provides outsourced processing for mutual funds, alternatives, ETFs, collective trusts in addition to SMAs.

Through its subsidiaries and partnerships SEI administered $360 billion in mutual fund and pooled assets at the end of June 2009. -FWR

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