FEW INVESTORS WORRY about what goes on behind the scenes once they have allocated their hard-earned cash to a mutual fund, as long as they see positive returns. But for fund managers, distributors and financial advisers, efficient administration can mean the difference between success and failure in a competitive industry. Besides the legal requirements of managing money, settling trades accurately or even collecting subscription forms in good time are the less-public, but no-less important, aspects of the business. Last week, HSBC Trustee relaunched its corporate business under the name Institutional Fund Services, to reflect expansion away from the traditional trustee services which have been offered since 1946. HSBC Trustee (HK) head of institutional fund services, Alastair Murray, said: 'We have upgraded our systems and products to offer our clients upgraded services. 'We have had tremendous success in the past 18 months with guaranteed funds and picked up the majority of the authorised guaranteed funds in Hong Kong. Now we are thinking: what is going to happen next?' The group is well-equipped to handle new hedge-fund business, tipped to be the next hot investment area once the Securities and Futures Commission adjusts the rules to let them be marketed at retail level. 'Direct investment hedge funds invest in complicated instruments such as derivatives. They also tend to trade very actively and it is important that our systems can handle more trades more quickly and interface with prime brokers,' Mr Murray said. In the past, HSBC Trustee's corporate business was providing trustee and fund administration services to collective investment schemes, such as unit trusts and retirement schemes. It also fulfilled a fiduciary, or quasi-trustee role, for mutual funds and partnerships - which have different legal structures. 'While these products and vehicles remain our core business, there are other growing areas,' Mr Murray said. 'We have spent a lot of time and effort on technology and are now able to offer some new services which have been extended to other markets in the region.' So far, the company has one client who has outsourced back-office operations - an area expected to grow as it has done in the United States and Australia. Three blue-chip fund houses have signed up for the enhanced 'investor services' capability, which includes taking the chore of issuing investor receipts and statements away from fund managers. HSBC hopes bank distributors and independent financial advisers will begin taking advantage of these options. 'Because of the automation, we are able to handle smaller accounts. We can also handle Chinese characters and this means we can target markets across the region, such as Taiwan and ultimately China.' On the technology front, the net has been thrown as wide as possible. A 'total imaging solution' means employees no longer fuss about with faxes and odd bits of paper. HSBC's proprietary client communications system TRACS, accessible via the Internet, enables clients to view accounts or upload information. An 'open interface gateway' means clients can connect directly to their brokers. The company is a committed participant in the new global settlement systems such as GSTP and Omgeo, giving various communication options amid a global push towards same-day settlement. 'A lot of effort has also gone into improving our straight-through processing,' Mr Murray said. 'We have just had a review from the Society for Worldwide Interbank Financial Telecommunications which found us one of the most efficient at processing cross-border settlements of any company they have reviewed. 'All these improvements enable us to keep up with the six-month reviews we undergo to keep our ISO-9002 accreditation. We believe we are the only fund administrator in Hong Kong that has achieved this accreditation,' he said.