Northern Trust Hedge Fund Services has launched its Portfolio Analytics and Compliance (PAC) service, a guideline testing and portfolio metrics service for hedge fund managers, managed account platform sponsors.
The PAC service allows clients on Northern Trust’s Omnium technology platform to monitor characteristics and guidelines at every level of their portfolios.
Using a proprietary reporting engine fully integrated into Northern Trust Hedge Fund Services’ platform, PAC can produce reports with custom metrics and calculations based on virtually any data element maintained by the system. Examples include, but are not limited to:
• Daily investment guideline testing against investment restrictions such as market value exposures, factor sensitivity exposures, liquidity requirements, or asset class and issuer restrictions, among others.
• Daily portfolio metrics reporting, including tracking of industry/sector exposures, weighted average durations, naked option exposures, hedge ratios, and the ability to identify movements or deviations in the portfolio’s profile or strategy
• Risk profile monitoring, such as changes to interest rate, credit spread and volatility exposure
• Tracking exposure concentrations by issuer, asset class and counterparty
• Monitoring shifts in portfolio liquidity
The Hedge Fund Services team at Northern Trust customises reporting outputs in consultation with clients and performs daily quality controls so each client receives reporting and updates that allow them to effectively manage their portfolios. PAC is available to any client supported on the Omnium technology platform.
“PAC goes beyond traditional compliance reporting,” says Peter Sanchez, head of Northern Trust Hedge Fund Services. “By leveraging the full range of data available in our systems, reports can support our clients’ needs from both a compliance and governance perspective. And because of the flexibility of our data model, reporting can be generated at every level of a firm’s structure, from total firm to individual fund to strategy to an individual trader or portfolio manager. With hedge fund managers focusing on enhanced risk management and managed account platforms growing in popularity, our clients require this level of post-trade analysis to ensure both sound oversight and compliance with investment guidelines.”
A recent Northern Trust Hedge Fund Services survey of hedge fund managers and investors found that more than half of all investors desired more transparency from their managers, even as many managers believe their investors to be satisfied with their current levels of transparency.
“Enhanced transparency and robust governance can be an important differentiator for alternative asset managers with prospective investors,” says Sanchez.
