Data management is an important determinant of a hedge fund operation’s success. This makes it crucial for hedge funds to invest in a state-of-the-art platform for storing and managing data from various asset stakeholders – from the fund manager, to the client investors and industry partners.
Here are the benefits of a smart and efficient data management practice in hedge fund management, made possible by a portfolio management system with superior features:
Improved accuracy of output. Where advanced computation capabilities are involved, there is going to be significant improvement in terms of the accuracy of data being produced. There will be decrease in human error, as functions may now be automated.
Faster performance of tasks. Through the use of technology, tasks can be performed much faster, saving the company hours and hours and precious manpower that could be devoted instead to more strategic goals. Data can be retrieved and organized in less than a minute, if not with the click of a button, based on specified parameters. And when the employees can do their tasks with speed and ease, they will be much more driven and register higher productivity.
Savings on the use of physical space. When data is kept on physical records, the space to be consumed for a filing system could be significant. Today, innovative data management tools save an enormous amount of information on the cloud – ready to be accessed and updated by authorized users anytime, anywhere. No need to maintain transaction records and the equipment used to store them.
Improved ability to share data. With technology, users can easily share information via their common platform. Cloud-based solutions can be used to upload and download data, and to facilitate collaborations, too.
Promotion of data privacy and security. Speaking of authorized users, the first-rate data management systems can assign access codes to categories of information, so that only the select users within the system can view them. Privacy and security of company and client investor data are paramount and are given much emphasis by industry regulators of hedge funds.
More convenient compliance management. Adhering to the various regulations covering the hedge fund management business can be quite a challenge. With a good data management tool, tasks related to compliance can be made easy. Reporting can be facilitated by features that arrange raw information into required formats, and fund managers may receive alerts for submission deadlines.
Topnotch portfolio management software solutions with these features are available through asset servicing firms.
Friday, March 17, 2017
Sunday, January 22, 2017
Best practices in data management for hedge funds
Our age has been dubbed the age of information. Vast amounts of knowledge are now at the tips of our fingers, and platforms already exist for the transmission of data at the click of a button. For hedge funds, trends involving the improved access to data have become crucial in promoting evidence-based investment decisions – decisions influenced by an analysis of fund growth patterns, interest rates, and risk measures, among other factors.
Below is a list of best practices to adopt, to make the most out of the present crop of data management technologies, and the next ones to come:
Adherence to security protocols. Data is now easily accessed, and shared, across platforms, across continents, in the real-time. Hedge funds need security protocols in place to prevent any breach to the network, which will make a company’s digital infrastructure and business strategy vulnerable to attacks. Protocols should cover such practices as the use of encryption when sending files to other networks, setting up of protection for data storage units and mobile devices, and the installation of advanced antivirus solutions, firewalls, and security patches to the network computers. Staff should be properly briefed – and trained – regarding protection of company information, and strict measures should be in place for any such process of allowed data release.
Automation of select processes. Humans can be prone to errors, especially in tasks marked by repetition and calculations. For these cases, automation features of data management solutions should be duly explored and optimized, because this will ensure accurate and precise outputs. At the same time, this practice reserves the precious time and high-level skills of the staff for core and complicated functions, such as strategizing, building relationships with client-investors, or conducting thorough risk analysis involving the assets under their management.
Use of cloud-based solutions. Data management lends much more benefits when access to information is easy and convenient. A cloud-based data management platform allows this. When data is on the Cloud, multiple parties can simultaneuously view files from wherever they are, make changes that will be reflected in the real-time, and even engage in collaborations. The more advanced solutions are capable of instant data aggregation and validation – functions that only raise the bar in data warehousing.
Among today’s breed of hedge funds, leading asset servicing firms provide the much-needed staff and technology support for adopting these best practices, ushering in a new era in data management among fund managers.
Below is a list of best practices to adopt, to make the most out of the present crop of data management technologies, and the next ones to come:
Adherence to security protocols. Data is now easily accessed, and shared, across platforms, across continents, in the real-time. Hedge funds need security protocols in place to prevent any breach to the network, which will make a company’s digital infrastructure and business strategy vulnerable to attacks. Protocols should cover such practices as the use of encryption when sending files to other networks, setting up of protection for data storage units and mobile devices, and the installation of advanced antivirus solutions, firewalls, and security patches to the network computers. Staff should be properly briefed – and trained – regarding protection of company information, and strict measures should be in place for any such process of allowed data release.
Automation of select processes. Humans can be prone to errors, especially in tasks marked by repetition and calculations. For these cases, automation features of data management solutions should be duly explored and optimized, because this will ensure accurate and precise outputs. At the same time, this practice reserves the precious time and high-level skills of the staff for core and complicated functions, such as strategizing, building relationships with client-investors, or conducting thorough risk analysis involving the assets under their management.
Use of cloud-based solutions. Data management lends much more benefits when access to information is easy and convenient. A cloud-based data management platform allows this. When data is on the Cloud, multiple parties can simultaneuously view files from wherever they are, make changes that will be reflected in the real-time, and even engage in collaborations. The more advanced solutions are capable of instant data aggregation and validation – functions that only raise the bar in data warehousing.
Among today’s breed of hedge funds, leading asset servicing firms provide the much-needed staff and technology support for adopting these best practices, ushering in a new era in data management among fund managers.
Tuesday, November 29, 2016
Private equity: Marching towards 2020
The domain of private equity is marked by increased competition, as spurred by growth of capital, the emergence of new markets, the rise in the number of players, as well as tightened regulation.
To be able to stay ahead in the game, private equity management firms need to be armed with the following sound strategies:
Devote more resources towards understanding new or reformed policies. New protocols or policy reforms are being implemented left and right, and it would do well for fund managers to try to understand their repercussions. Some firms make the mistake of treating compliance as an afterthought, in their bid not to allow it to change the way they do business. But the best and most sustainable way to go about it is to seamlessly integrate it in all stages of the company’s operations. Automation of reporting and audit processes is key, along with a step-by-step compliance monitoring. It’s also important to look closely at how tax reform is being discussed within and outside the industry, and contribute to voices that will promote the standing of private equity business in this aspect.
Consider asset servicing. Private equity management firms need to save every resource they have towards successful steering acquired companies to profitable operations – in levels that will mean high yields for the investors. Enlisting the services of outsourcing partners will greatly help them free up precious manpower and budget, while being able to access first-rate support. The best asset servicing firms possess advanced tools for accomplishing middle and back office functions, including portfolio management systems. They also maintain a pool of professionals who are experienced in these tasks.
Pay attention to cybersecurity. Promoting cybersecurity is no longer just an option to private equity these days. In the age of cyberattacks, it is crucial that asset managers guard themselves against efforts to cull sensitive information that may compromise their business operations at various fronts. Cloud-based data warehousing is fast becoming the way of the future for all fund management businesses, and it poses challenges as regards keeping data accessible only to the right parties. By making more investment towards cybersecurity, not only do firms protect their valuable business data. They also protect the company’s reputation, which in turn boosts the confidence of all prospective client-investors.
By keeping abreast of these pointers, private equity firms are set to generate optimum returns – a win for the client-investors, the fund manager, and the industry.
To be able to stay ahead in the game, private equity management firms need to be armed with the following sound strategies:
Devote more resources towards understanding new or reformed policies. New protocols or policy reforms are being implemented left and right, and it would do well for fund managers to try to understand their repercussions. Some firms make the mistake of treating compliance as an afterthought, in their bid not to allow it to change the way they do business. But the best and most sustainable way to go about it is to seamlessly integrate it in all stages of the company’s operations. Automation of reporting and audit processes is key, along with a step-by-step compliance monitoring. It’s also important to look closely at how tax reform is being discussed within and outside the industry, and contribute to voices that will promote the standing of private equity business in this aspect.
Consider asset servicing. Private equity management firms need to save every resource they have towards successful steering acquired companies to profitable operations – in levels that will mean high yields for the investors. Enlisting the services of outsourcing partners will greatly help them free up precious manpower and budget, while being able to access first-rate support. The best asset servicing firms possess advanced tools for accomplishing middle and back office functions, including portfolio management systems. They also maintain a pool of professionals who are experienced in these tasks.
Pay attention to cybersecurity. Promoting cybersecurity is no longer just an option to private equity these days. In the age of cyberattacks, it is crucial that asset managers guard themselves against efforts to cull sensitive information that may compromise their business operations at various fronts. Cloud-based data warehousing is fast becoming the way of the future for all fund management businesses, and it poses challenges as regards keeping data accessible only to the right parties. By making more investment towards cybersecurity, not only do firms protect their valuable business data. They also protect the company’s reputation, which in turn boosts the confidence of all prospective client-investors.
By keeping abreast of these pointers, private equity firms are set to generate optimum returns – a win for the client-investors, the fund manager, and the industry.
Wednesday, September 28, 2016
Fund administration and the role of third-party asset servicing firms
Fund administration is undoubtedly a very important task nowadays. And it pays for fund managers to have third-party administrators help manage their business. But what do these third party companies do anyway?
Calculating the values of net assets
Fund administrators are usually independent companies that offer a wide range of solutions and services that are mainly designed to assist hedge fund managers in verifying the values of assets, reconciling data, ensuring fair pricing for traded securities, preparing investor statements and other reports, and other tasks.
It is the first task that is arguably the most important, as many people who work for asset servicing firms would agree; accurately calculating net asset values and ensuring all transactions on record had actually happened is vital to the integrity of every hedge fund or similar vehicle.
Data reconciliation
The second of the aforementioned tasks, which is the reconciliation of data, is another key service offered by third-party asset servicing firms, and one that is closely related to asset value verification. Usually, toward the end of the month, broker statements and investment manager statements are checked and verified to make sure they are not inconsistent with one another. Administrators also have to consider different variables that could affect net asset values, such as the inflow and outflow of investor assets.
Fair pricing
Fund administrators also have to make sure that each traded security has been priced fairly. This could require a lot of mathematical grunt work, but thanks to the experienced staff that are now de rigueur for third-party asset servicing companies, this is easier to complete than what one may think. In fact, administrators typically use the averages of three quotations from brokers, and only use sophisticated math when a particular holding is a rather complex one.
The cloud plays a valuable role in administration
In today’s fund administration industry, more and more companies are leveraging higher-end technologies to ensure they take good care of their funds their clients manage, and deliver accurate information on time, all while being compliant with all laws, regulations, and statutes.
Cloud-based technology is a requisite for these firms, who offer a wide variety of middle- and back-office solutions, and handle the tasks mentioned above, among many others. Considering the repercussions of the Bernard Madoff scandal and the higher premium on transparency demanded by investors, hedge fund managers will certainly be better for dealing with third-party companies for their asset servicing needs.
Calculating the values of net assets
Fund administrators are usually independent companies that offer a wide range of solutions and services that are mainly designed to assist hedge fund managers in verifying the values of assets, reconciling data, ensuring fair pricing for traded securities, preparing investor statements and other reports, and other tasks.
It is the first task that is arguably the most important, as many people who work for asset servicing firms would agree; accurately calculating net asset values and ensuring all transactions on record had actually happened is vital to the integrity of every hedge fund or similar vehicle.
Data reconciliation
The second of the aforementioned tasks, which is the reconciliation of data, is another key service offered by third-party asset servicing firms, and one that is closely related to asset value verification. Usually, toward the end of the month, broker statements and investment manager statements are checked and verified to make sure they are not inconsistent with one another. Administrators also have to consider different variables that could affect net asset values, such as the inflow and outflow of investor assets.
Fair pricing
Fund administrators also have to make sure that each traded security has been priced fairly. This could require a lot of mathematical grunt work, but thanks to the experienced staff that are now de rigueur for third-party asset servicing companies, this is easier to complete than what one may think. In fact, administrators typically use the averages of three quotations from brokers, and only use sophisticated math when a particular holding is a rather complex one.
The cloud plays a valuable role in administration
In today’s fund administration industry, more and more companies are leveraging higher-end technologies to ensure they take good care of their funds their clients manage, and deliver accurate information on time, all while being compliant with all laws, regulations, and statutes.
Cloud-based technology is a requisite for these firms, who offer a wide variety of middle- and back-office solutions, and handle the tasks mentioned above, among many others. Considering the repercussions of the Bernard Madoff scandal and the higher premium on transparency demanded by investors, hedge fund managers will certainly be better for dealing with third-party companies for their asset servicing needs.
Friday, August 19, 2016
What is PER in NBA?
The 2015-2016 NBA season has been a historic one to say the least. It first started blowing up social media when Aaron Gordon and Zach Lavine had a dunk off for the ages culminating to be one of the most successful NBA all star weekends in recent memory. Pair that flurry of excitement with oh just the most dominant single-regular season run in NBA history by the man, the myth, the legend Stephen Curry. He led his team to a ridiculous 73-9 that shattered the GOAT Michael Jordan’s 95-96 Bulls for the best regular season record.
On top of that, Curry and the boys continually broke shooting and scoring records which propelled him(Curry) to his second Most Valuable Player award and the first unanimous in the history of the league! Let the claim to fame sink in: THE FIRST UNANIMOUS MVP EVER. We have been blessed with some great legends of the entire tenure of the National Basketball Association but Curry is the first to ever accomplish such a remarkable feat.
On paper, Curry’s single season stats are impressive but not as Godly as you think. You would have been giddy as all hell if you had Curry on your fantasy NBA team as he averaged for the season: 30 points per game, 6 rebounds per game, and nearly seven assists per game. Comparatively Jordan during his legendary run in the ‘95-96 season he averaged nearly identical numbers: 31 points per game, 7 rebounds per game, and nearly five assists per game. Although both of these men led their storied franchises to unbelievable seasons and great overall stat lines they still remain inferior in possibly one of the most overlooked yet important stats.
This stat is PER or Player Efficiency Rating and has been dominated by one man for almost the entire tenure of the NBA. Wilt “The stilt” not only holds the coveted number one spot on the best PER for a single season in NBA history, he actually holds the top two! If Wilt was available for NBA daily fantasy he would have been locked in to everyone’s lineups on a nightly basis. The man was a freak on the court and ultimately reigns supreme. The stat is a measure of based on a player’s playing time, ball touches, shot attempts, and multitude of other factors meaning the more this guy touched the ball the deadlier he was.
For those looking for daily NBA fantasy sleepers, consider veying for low minute players that have excellent PER. Granted if players don’t hit minute floors they undoubtedly won’t be able to produce to a sufficient level, but if the extra opportunities present themself your guy could be in for a huge night.
On top of that, Curry and the boys continually broke shooting and scoring records which propelled him(Curry) to his second Most Valuable Player award and the first unanimous in the history of the league! Let the claim to fame sink in: THE FIRST UNANIMOUS MVP EVER. We have been blessed with some great legends of the entire tenure of the National Basketball Association but Curry is the first to ever accomplish such a remarkable feat.
On paper, Curry’s single season stats are impressive but not as Godly as you think. You would have been giddy as all hell if you had Curry on your fantasy NBA team as he averaged for the season: 30 points per game, 6 rebounds per game, and nearly seven assists per game. Comparatively Jordan during his legendary run in the ‘95-96 season he averaged nearly identical numbers: 31 points per game, 7 rebounds per game, and nearly five assists per game. Although both of these men led their storied franchises to unbelievable seasons and great overall stat lines they still remain inferior in possibly one of the most overlooked yet important stats.
This stat is PER or Player Efficiency Rating and has been dominated by one man for almost the entire tenure of the NBA. Wilt “The stilt” not only holds the coveted number one spot on the best PER for a single season in NBA history, he actually holds the top two! If Wilt was available for NBA daily fantasy he would have been locked in to everyone’s lineups on a nightly basis. The man was a freak on the court and ultimately reigns supreme. The stat is a measure of based on a player’s playing time, ball touches, shot attempts, and multitude of other factors meaning the more this guy touched the ball the deadlier he was.
For those looking for daily NBA fantasy sleepers, consider veying for low minute players that have excellent PER. Granted if players don’t hit minute floors they undoubtedly won’t be able to produce to a sufficient level, but if the extra opportunities present themself your guy could be in for a huge night.
Friday, June 17, 2016
The value of adopting a state-of-the-art portfolio management system
Portfolio management is a complex business. Aside from requiring thorough and regular monitoring of asset performance, managers need to deal with growing demands for transparency and oversight in and outside of the investments and securities industry. Thankfully, these challenges can now be addressed with the adoption of a good portfolio management system.
Below is a discussion of some of the benefits of investing in the best version of this tool.
Keeping up to date with industry developments. With the help of a portfolio management system, client-investors can be provided with reporting tools that are always available online. This allows asset managers to look at upcoming trends, assess their impact on the fund’s performance, and accordingly prepare measures that address emerging risks.
It offers a comprehensive view of all factors needed in making investment decisions. Portfolio management is about dealing with a lot of metrics, and using the insight derived from them to guide future actions. The best of breed portfolio management systems offer a consolidated view of past transactions, the assets under management, and cash flow, allowing for quick and sound decision-making.
Complying with all pertinent regulations becomes much easier. The past financial crises and major investment scandals truly rocked the industry, and spurred a number of government regulations designed to protect the interest especially of the client-investors. But dealing with all of these tight regulations is a huge and time-consuming chore for most firms. When they fail to comply, they are subject to penalties and legal action, on top of seeing their reputation crumble. By adopting a portfolio management technology, most of the procedures related to compliance can be automated, such that the entire process need not take up so much of the company’s resources.
It enables strategizing towards the achievement of financial goals. With a cloud-based portfolio management system, asset managers are able to gather all the data they need in one hub. This in turn allows them to provide all the relevant stakeholders easy access to files, enabling collaboration. When portfolio managers, fund administrators, and other third party service providers can effectively and quickly exchange information, the experience of asset management becomes a seamless process that fosters quick return on investment (ROI).
Firms may invest towards the set-up of in-house portfolio management systems, or access these through top asset servicing firms. These firms can develop proprietary tools, on top of handling a full range of back and middle-office functions.
Below is a discussion of some of the benefits of investing in the best version of this tool.
Keeping up to date with industry developments. With the help of a portfolio management system, client-investors can be provided with reporting tools that are always available online. This allows asset managers to look at upcoming trends, assess their impact on the fund’s performance, and accordingly prepare measures that address emerging risks.
It offers a comprehensive view of all factors needed in making investment decisions. Portfolio management is about dealing with a lot of metrics, and using the insight derived from them to guide future actions. The best of breed portfolio management systems offer a consolidated view of past transactions, the assets under management, and cash flow, allowing for quick and sound decision-making.
Complying with all pertinent regulations becomes much easier. The past financial crises and major investment scandals truly rocked the industry, and spurred a number of government regulations designed to protect the interest especially of the client-investors. But dealing with all of these tight regulations is a huge and time-consuming chore for most firms. When they fail to comply, they are subject to penalties and legal action, on top of seeing their reputation crumble. By adopting a portfolio management technology, most of the procedures related to compliance can be automated, such that the entire process need not take up so much of the company’s resources.
It enables strategizing towards the achievement of financial goals. With a cloud-based portfolio management system, asset managers are able to gather all the data they need in one hub. This in turn allows them to provide all the relevant stakeholders easy access to files, enabling collaboration. When portfolio managers, fund administrators, and other third party service providers can effectively and quickly exchange information, the experience of asset management becomes a seamless process that fosters quick return on investment (ROI).
Firms may invest towards the set-up of in-house portfolio management systems, or access these through top asset servicing firms. These firms can develop proprietary tools, on top of handling a full range of back and middle-office functions.
Wednesday, April 20, 2016
How technology impacts the fund administration business
Market conditions are driving the sustained growth of the fund administration sector. Indeed, more and more business and investors are getting enticed by the benefits of using a third party administrator. At the same time, as the market grows, competition also becomes stiffer. Performance is key to gaining competitive advantage among peers. Of course, performance is affected by how effective the tools used by the administrators are.
Technology and analytics play a big role in setting the operational conditions. Through technology, administrators are given the tools to establish the most efficient and least costly operating model. With the growing clamor for transparency and reporting, the role of data analytics in fund administration becomes more pronounced. Investing in innovative technologies that help establish best practices and consolidate information has become an integral strategy to remain competitive.
However, this increased dependency on technology has also exposed the industry to cyber attacks. Cyber criminals have also become more and more sophisticated with their technologies and approach that cyber risk management can no longer be relegated to the periphery but must be included in the core competencies to ensure security. Funds are associated with a great deal of personal information that must be protected and kept private. An administrator’s policy on how this set of information is protected is a key factor for clients. Now it is fundamental to put in place a robust cyber risk assessment process that tries to strike a balance between accessibility and protection.
Data management and analytics also plays a big role in the struggle of administrators to institute reliable customer identification. Administrators must ensure that clients are protected from identity theft. It must also do its part in securing its own yard from perpetrators of fraud and money laundering. Regulatory requirements that compel administrators to perform the above obligations are enforced more strictly now that threats are more imminent.
In the United States, because of the regulatory requirements that have become stricter, transparency in fund administration has become ever more important. Existing standards and reporting methods are now put under pressure. The requirements compel administrators to gather data from different sources, aggregate it, and submit to the regulating body. To minimize its impact on resources, administrators turned to modern software solutions.
The environment continues to be challenging for fund administrators. Being able to adapt operational model to these changes and investing in technologies, as well as seeking the help of more experienced third party providers can help the firm become more agile.
Technology and analytics play a big role in setting the operational conditions. Through technology, administrators are given the tools to establish the most efficient and least costly operating model. With the growing clamor for transparency and reporting, the role of data analytics in fund administration becomes more pronounced. Investing in innovative technologies that help establish best practices and consolidate information has become an integral strategy to remain competitive.
However, this increased dependency on technology has also exposed the industry to cyber attacks. Cyber criminals have also become more and more sophisticated with their technologies and approach that cyber risk management can no longer be relegated to the periphery but must be included in the core competencies to ensure security. Funds are associated with a great deal of personal information that must be protected and kept private. An administrator’s policy on how this set of information is protected is a key factor for clients. Now it is fundamental to put in place a robust cyber risk assessment process that tries to strike a balance between accessibility and protection.
Data management and analytics also plays a big role in the struggle of administrators to institute reliable customer identification. Administrators must ensure that clients are protected from identity theft. It must also do its part in securing its own yard from perpetrators of fraud and money laundering. Regulatory requirements that compel administrators to perform the above obligations are enforced more strictly now that threats are more imminent.
In the United States, because of the regulatory requirements that have become stricter, transparency in fund administration has become ever more important. Existing standards and reporting methods are now put under pressure. The requirements compel administrators to gather data from different sources, aggregate it, and submit to the regulating body. To minimize its impact on resources, administrators turned to modern software solutions.
The environment continues to be challenging for fund administrators. Being able to adapt operational model to these changes and investing in technologies, as well as seeking the help of more experienced third party providers can help the firm become more agile.
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