DTCC Expands and Renames a Business Unit

by Karen Gregory

DTCC now has a Wealth Management Services business unit, incorporating Mutual Fund Services, the Managed Accounts Service and a new proposed service for alternative investment products.

Until recently, DTCC's long-established Mutual Fund Services served as the umbrella for all three fund businesses. The name change reflects DTCC's expansion over the past two years into these new and growing product areas.

"Managed accounts and alternative investment products present complex processing dynamics," explained Ann Bergin, DTCC managing director and general manager, Wealth Management Services. "Our customers have asked us to create solutions for these products that will help them reduce processing risk and related errors, ensure business continuity, support regulatory compliance and increase operating margins."

Managed Accounts Service
DTCC introduced the Managed Accounts Service last September to provide the industry with an automated, centralized platform that streamlines communications between sponsor broker/dealers and their investment managers. This service is offered by DTCC Solutions LLC, a DTCC subsidiary.

Managed accounts include separately managed accounts, unified managed accounts and other similar types of portfolios. These investment vehicles are increasingly popular with U.S. investors, particularly those with rising net worth who are looking for nontraditional avenues to expand their wealth.

Alternative investments
DTCC's service for alternative investment products, currently in pilot, will standardize and automate the processing and settlement of a range of products, including hedge funds, funds of hedge funds, real estate investment trusts, managed futures and commodity pools. Subject to approval by the Securities and Exchange Commission, it will be offered by DTCC's National Securities Clearing Corporation subsidiary.

Higher-tier investors also are turning to alternative investment products. Hedge funds alone reached $1.89 trillion in worldwide assets in 2006, according to a report released by Institutional Investor News and HedgeFund.net, and institutional demand for them could triple by the end of the decade.

"Wealth Management Services is committed to fully supporting the expanding asset management industry with new services, as well as enhancements to our traditional ones, many of which have become industry standards," Bergin said. "At the same time, we will leverage our experience and create partnerships with global providers to develop technology solutions that address the ever-growing range of our customers' businesses and their increasingly complex processing requirements." @

Wealth Management Services Quarterly is DTCC's new publication providing news and information on DTCC's three services for the funds industry. This publication replaces Mutual Funds News, a former DTCC publication for the mutual fund industry.

To subscribe to Wealth Management Services Quarterly, send an email to editor@dtcc.com and include your full name, title and mailing address.