THE Edinburgh-based WM Company has won several more contracts to handle the back office administration work of fund management companies following its ground breaking deal with Scottish Widows earlier this year.

Head of marketing Stephen Connelly said one of the new deals involved the administration of investments totalling ``several billion pounds,'' but he declined to name the client.

He was only prepared to identify two relatively small fund managers which had signed up with the WM Company recently - POIS Assurance, a friendly society with #140m under management, and Waverley Unit Trust Management with #10m.

The WM Company is a subsidiary of Bankers Trust, which undertakes investment administration, investment accounting and performance measurement for a wide variety of fund managers.

Its work mainly consists of reconciling accounts for the purchase and sale of securities, monitoring the payment of dividends and interest and measuring how client investment portfolios perform against various benchmarks.

The WM Company originally formed part of Edinburgh stockbroker Wood Mackenzie, but Bankers' Trust bought it in 1987 to complement its role as a global custodian of securities.

The organisation employs 550 people at its headquarters in Crewe Toll on the western outskirts of Edinburgh and had a turnover of #24m in 1994, the last year for which results have been published. Mr Connelly said profits are growing by about 20% a year.

The fastest growing line of new business is the outsourcing of back office administration work.

Scottish Widows, which has #23bn under management, set the ball rolling in February when it cut 600 jobs as part of a major reorganisation and handed over complete responsibility for its investment administration to the WM Company.

Scottish Widows fund managers still decide what to buy and sell, but the WM Company handles all the administration thereafter. The Edinburgh-based life office cut 70 jobs as a result of outsourcing this function and other fund managers have been impressed by its example.

``Since we got the Scottish Widows business the phone hasn't stopped ringing,'' Mr Connelly said.

The next landmark contract for the WM Company was a deal to handle back office work for CastleInternational, a fund management company formed by ex-Dunedin employees with #1500m under its belt.

This was followed in July by a contract to handle investment accounting and administration and performance measurement for Equitas, the new Lloyds re-insurance vehicle with #7000m under management.

Economies of scale have enabled the WM Company to invest in developing a sophisticated new computer system to handle back office work more efficiently. This will become operational next year.

``We have got 130 people devoted solely to developing this platform and we reckon it will cost about #20m in total,'' Mr Connelly said.

Few individual fund management companies could afford to undertake such a large investment on their own account, he noted.

The biggest difficulty facing the WM Company in persuading potential clients to outsource their back office work is the fear of loss of control.

But Mr Connelly said this caution is misplaced. On the contrary, clients can sue the WM Company for compensation if it makes any mistakes, he noted.