The trend towards outsourcing fund administrative capabilities has spread to Belgium. Following the launch of the European Fund Administration company (EFA) in Luxembourg earlier this year, in what has been referred to as a defensive" move by current service providers, and Banque Internationale á Luxembourg having expanded their operations, Banque Indosuez has now teamed up with Generale de Banque in Belgium to set up Fastnet, a new dedicated administration company.

Fastnet is primarily aimed at the Belgian fund market, though Jean-Claude Stoffel vice president at Indosuez who is responsible for promoting the new company, says that plans for expansion are already underway: "The ultimate goal is to set up a network of such administration centres." He adds: "The next step will be Luxembourg and then France and then we are considering other countries as well."

Fastnet is looking to target its services at the banks currently administering funds in-house in Belgium, who take up approximately 90% of market share. The company has already approached investment group Fortis with its proposals, which Stoffel says has been "really well accepted" adding: "There is a demand for this kind of outsourcing."

In a similar vain to EFA, the core of the new business will be taken up with funds currently held by both banks. These will be transferred over the next few months, amounting to an estimated total of Bfr150bn ($4.2bn) under management, which, says Stoffel, represents "something like less than 30% of the Belgian market share already".

"Generale de Banque will continue to act as a depository bank," he says. "But the daily calculation of the net asset value plus all the affiliated administrative function are now dedicated to Fastnet in the Belgian Ar-dennes and we have 12 people there to do the job. It is a brand new organisation with new staff."

While Stoffel does not admit to any similarity in the two banks' consolidatory move with that of EFA, viewing the Belgian move as more aggressive, Indosuez and Generale de Banque are essentially merging for the same reasons. Stoffel says the idea for the move came from Generale de Banque as they "were not willing to invest dramatically in systems" which seems to be a common reaction emanating from the European fund industry when it comes to administration. Many banks are finding that the costs involved in investing in in-house expertise and resources to dedicate to what is often viewed as an add-on service, are simply not worth the effort.

There is some debate whether fund administration is operated more effectively by a specialist such as EFA and now Fastnet, as opposed to keeping services together within the bank. But while certain banks insist a one-stop service, though more expensive, is significantly simpler for promoters and fund managers to deal with, others are discovering the costs involved are enough to persuade them to outsource."