Thu, 13/01/2011 - 15:42
By Alan Raftery - There is a new-found hedge fund environment and the message for all involved is clear – be prepared. Today, it is vital for all in the hedge fund industry to have the right tools to survive and succeed in a volatile setting.
One of the most important requirements is the right technology and operational infrastructure, one that can deliver the service levels required by clients and their investors, and that can ensure smooth transition of front-to-back offering – from order management through to accounting. Increasing efficiencies while having the flexibility to adapt to different trends is definitely the order of the day.
The alternative investment industry continues to go through a period of transformation in the wake of the global financial crisis, mainly driven by a swathe of new regulation across various jurisdictions. This trend will place greater demands on the operational component of the industry.
A particular area that will be impacted is anti-money laundering measures, and specifically the need for identification of underlying beneficial owners. There will also be a greater focus on liquidity as managers analyse the mechanics of the European Union’s Ucits regime. For example, will they be able to generate acceptable returns considering the restrictions inherent in the Ucits rules?
At Koger, we have the necessary solutions to assist clients in addressing the added issues in the field of transparency and liquidity. Our web front-end product, ETAS (for Electronic Transfer Agency System), allows authorised third parties such as asset managers and investors to generate reports on a real-time basis. This is consistent with recent market developments where increased access to information has become a necessity and also where investors are asking for greater granularity.
ETAS also applies within the context of liquidity, as by allowing authorised third parties to access information, it enables them to quantify the liquidity position of their investments.
The alternatives arena demands extremely robust operational processes and software solutions. Hedge fund managers looking to attract new money need to make sure their technology is right in order to ease the burden on the investment manager – whose main responsibility lies in creating alpha.
Hedge funds and their service providers must have fully integrated software solutions that help them to meet their goals and provide the highest levels of client service, systems that enable them to stand out in this new era and allow them to cope better with market dynamics and turbulence.
Koger’s main transfer agency platform, NTAS (New Transfer Agency System), has been built on the basis of all complex processes, such as end-of-period incentive fee processing, being fully automated, thus eliminating manual errors and cutting processing time to a minimum. Koger has also recently launched SWIFT-compliant 20022 messaging capabilities that will drive efficiencies for our clients by reducing the cost of trade delivery and receipt, with the added benefit of reducing manual errors.
Koger’s products can also help reduce costs through our rule engine, which allows exceptions to fund level rules for charges such as management, administration and incentive fees.
Overall we see compliance and liquidity playing a major role over the next year or two. In an ever-evolving industry, Koger is well placed to service the needs of managers and administrators alike.
Alan Raftery is head of operations with Koger in Dublin
Please click here to download a copy of the Hedgeweek special report Cayman Islands Hedge Fund Services 2011
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