ITALY – HSBC says it has received approval to open a custody operation for alternative investment funds in Milan.

The bank has named Paolo Lippolis as manager for its Alternative Fund Services arm in Italy. It said he would be based in Milan, overseeing the development of the office. This includes acting as custodian for local hedge funds and funds of hedge funds with immediate.

He would also recruit a team of accounting specialists to offer fund administration outsourcing services from early next year. It said the hedge fund market in Italy grew by 180% last year.

Paul Smith, global head of Alternative Fund Services, said Lippolis was “a prominent figure in the industry locally”.

“Italian hedge funds have a lot of potential for further growth and the opening of the office means we’re well placed to apply our expertise and knowledge to help the local industry develop and mature."

Lippolis added: "New Bank of Italy regulations, issued in April 2005, allow managers to outsource the calculation of the net asset value of their funds to their custodian.

“This is an important step for the Italian funds industry and will encourage growth in outsourced fund administration."