The market crash was painful for investment firms and their clients, but it has been a boon for a boutique investment administration business in North Carolina.

"Since 2008, a lot of firms have blown up," said Kip Meadows, chief executive of Nottingham Investment Administration in Rocky Mount. "That left a lot of mighty talented people out there, the No. 2 or 3 people at these investment advisers, who said, 'What am I going to do next?' "

The answer to that question for many has been to start new firms. And several of those startups have turned to Nottingham for administration and record keeping as well as advice about getting started. The firm, far from Boston, New York and other investment-industry hubs, has 60 clients, up from 33 in June of 2008. Its assets under administration rose 10% last year, to more than $25 billion.

Nottingham has carved out a niche as an administrator of mutual funds and hedge funds, as well as funds of funds and pooled investment vehicles, and has positioned itself as a firm willing to take on small investment firms and give them lots of guidance.

"We're consultative," Meadows said. "They'll come us and say, 'This is our situation: We've got $500 million or a billion of assets under management; we started with a lot of smaller accounts, and we don't know whether to use a mutual fund or a hedge fund.' "

Nottingham's team talks the investors through the issues: What is their target client base? Are they investing retirement plan assets or the assets of high-net-worth individuals? How the investment firm chooses to market is an important piece of information; those that self-market may find hedge funds a better fit, while those with investment adviser relationships might want to use mutual funds.

The 53-employee firm was founded in 1989. Meadows, a former broker, started the business after hearing from adviser after adviser that they had lots of small accounts and needed a way to pull them together for efficiency's sake.

Nottingham still specializes in servicing small firms like the one run by John C. Thompson in Madison, Wis. "I found them through Google," said Thompson, chief executive and portfolio manager of Vilas Capital Management LLC, a startup with $2 million of assets under management. "They've been excellent at service and have bent over backward to help us get going."

What's more, in the wake of various adviser scandals, investors are no longer accepting in-house accounting, and that has benefited third parties such as Nottingham.

"Investors are just demanding transparency," Meadows said. "One of the first questions in due diligence is, 'Do you have third-party accounting?' "

Advisers seem to welcome Nottingham's flexibility and lack of bureaucracy. Thompson, who was chief investment officer for Thompson Investment Management Inc. in Madison, Wis., compares the firm favorably with the fund-servicing arm of a major bank that company has used.

After Thompson Investment Management was honored in a national magazine a few years ago, the bank insisted that a page of disclosures be stapled to the front of any reprints. Nottingham is "easier to work with," Thompson said.

Meadows says he is seeing more and more convergence between hedge funds and mutual funds. In years past, standout money managers preferred to start hedge funds, largely as a matter of prestige.

As regulators have closed in around hedge funds, advisers have changed their tune, according to Meadows. "They're saying, 'Well, if I'm going to be regulated like a mutual fund, I might as well be a mutual fund.' "

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