A recent global survey of hedge fund managers cited technology as the number one area they believe fund administrators should focus on improving in the next two years.
A recent global survey of hedge fund managers cited technology as the number one area they believe fund administrators should focus on improving in the next two years.
Koger’s New-Generation Transfer Agency System (NTAS) is currently used by the world’s leading fund administrators to administer almost USD 2 trillion worldwide. We developed NTAS as a fully integrated, full-featured share-registration and unit trust system to meet the needs of funds and their administrators, but we realise that funds don’t stand still, and neither do we.
We regularly see administrators who, instead of concentrating on improving the way they interact with their current software, simply buy new software to try to solve a problem. We aim to work with our clients to accommodate workflow within their current software systems, thus eliminating inefficiencies and being more cost effective. After all, why take three steps when you only really need to take one?
Financial vehicles are growing more complex, driven by the fund managers’ desire to chase alpha as well as the need to create unique products geared specifically to particular investors. The increasing complexity of hedge funds places more pressure on fund administrators, and it is in the area of planning for the future needs of managers where we view our role as key to the continued success of our clients.
Currently, we believe that there is a disconnect existing between the fund manager, the fund administrator and their software provider. We think the critical missing link is that these three groups don’t come together to discuss future requirements. The administrator has a close relationship with their client, the manager; and we, as software providers, have regular, in-depth conversations with our clients, the administrators, about their needs.
The missing link is a forum where the three groups could work together to discuss future initiatives and where we could all work together to accomplish improved functionality that would benefit the day-to-day operations of a fund.
In terms of the ability to meet changing demands of end investors, we are already looking into the possibility of expanding our global user group to include some investors. This would give us the opportunity to listen to their needs, and hence give them some real weight when working on new functionality. In addition, we would be able to assess the level of interest in new functionality, for example, the ability to consolidate reporting from funds with different administrators into one overall statement for an investor.
A new initiative we are currently working on is an evaluation of the process to prove compliance with SAS70 regulations, to examine whether this can be driven automatically. With the growth in the number of institutional investors, SAS70 compliance is very much a given for fund administrators, but at present, this involves a very manually-driven process, which is therefore time-consuming and costly in terms of human resources.
We are looking into the possibility of software recording the due diligence process from workflow, leaving the administrator needing only to print the report as verification that the due diligence has been carried out.
Rastislav Sipko is Chief Operating Officer for Koger
