Trends in Hedge Fund Investments and Support

what1Since 2008 there has been significant focus on making hedge funds more transparent. Additionally, family offices and high net worth individuals have become more interested in hedge fund investments. These drivers have led to the growth of managed accounts.

The other trend leading to the growth of managed accounts is that the existing institutional investors have been looking for more flexibility and customization with regard to underlying investment selection, as well as fee terms. Based on Elite’s experience and industry literature, independent platform solutions such as AlphaMetrix, Markit, State Street’s InfraHedge, Scens Alternative Investments, Bloomberg’s AIM, Sungard’s Hedge 360, and others have significantly increased their AUM over the last 12-18 months. This is due to the fact that many large hedge funds and funds of hedge funds are using outsourced platforms in order to be quick to market. These platforms each provide some of the following features: analytics, risk management, trading, customized guideline monitoring and daily reporting.

The need for transparency also requires the managers to provide clearer reporting to their investors. This is critical because the underlying investments of the managed accounts are not that easily understood. These investments may be affected by counterparty risk as well as market conditions.

In addition, the major investment managers are implementing much more flexible Client / LP Portals. These platforms allow the investors to understand their holdings by providing full look-through to their allocations, as well as, the components of risk related to each underlying investment. Creating and maintaining the portal data requires integration among multiple disparate systems and data sets. The systems could include market data (such as Bloomberg, HFR, Markit, iLevel, and others) , analytics and risk mitigation, accounting and performance monitoring (HedgeSphere, Investran, Geneva, VPM, Investier, etc.) and CRM (SalesForce, Dynamics, Netage, Backstop, etc.), in addition to the platforms mentioned earlier, which provide front-to-back features (each for different investment vehicle types). So, at the core of these platforms there must be a mechanism to map and standardize the data.

Elite Technology Consulting has extensive experience in data mapping, reconciliation and creation of of data architectures to support integrate client reporting.

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01
Jul
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