Custom House Global Fund Services, the $27bn hedge fund administration business, is responding to increased demand among hedge funds to obtain a licence in ‘onshore’ and EU jurisdictions, by doubling its Maltese headcount, HFMWeek has learned.

The business will increase the number of staff in its Malta office from 20 to 40 by the end of 2010, as it seeks to cater to a series of re-domiciliations, new hedge fund-style Ucits products, which can only be launched within EU jurisdictions, and growing concerns about draft European fund legislation.

Chairman Dermot Butler said the administrator hopes to transfer some of its employees currently based in Dublin, although it has no major plans to downsize its office there.

“We feel that Malta is a potential onshore EU jurisdiction for fund set-up because it is in the EU and is just as local a centre as Luxembourg or Ireland,” he said. “A lot of people are concerned about the AIFM Directive and this gives them a way to set up with greater regulation within Europe.”

Custom House already has a significant presence in Malta as an administrator for National Bank of Canada, including Innocap, its $2bn managed account platform and joint venture with French bank BNP Paribas.

According to HFMWeek’s AuA Survey, as of October 2009, Custom House had $26.9bn in AuA.

Barry Taleghany, an attorney at Loughran & Co. in London, said he expects hedge fund administrators to continue migrating to Malta.

“Malta is proving to be extremely attractive to overseas investors and a mini-boom for local administrators, who are competing effectively with other EU jurisdictions such as Ireland, which suffer from too high audit and legal fees and need targeted corporation tax cuts quickly” he said.