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Hedge funds facing increased investor demands for STP efficiencies

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TFG Financial Systems, a provider of real time risk and portfolio management systems, has said it is seeing increased adoption of the straight through processing (STP) workflow module of its core portfolio and risk management system, TFG Complete. 

TFG confirmed this has come about as a consequence of increased scrutiny by investors of operational risks within hedge funds, including the middle and back office.

In the past six months TFG has added five prime brokers and two fund administrators to its already comprehensive service provider coverage, reflecting demand from end clients for a more integrated and automated STP solution. This demand is being driven by investor requirements for further reductions in operational risk.

Barry Fenwick, CEO of TFG Financial Systems, says: “Our clients are being pushed by their investors to demonstrate that they not only have trading strategies and risk management practices which bear rigorous scrutiny but also have the operational efficiency to support all their trading activities.”

TFG’s STP workflow module is an integrated component of its real time risk and portfolio management system, TFG Complete. It represents one of the few applications of its kind on the market to offer full support of the middle office workflow, seamlessly integrating TFG’s existing real time event monitoring system with the middle office and the fund manager’s administrator and prime broker.

TFG Complete is also capable of managing multiple service provider relationships while still delivering solid STP: one TFG client, managing multiple managed accounts with several prime brokers, recently completed 94 per cent of its trades with zero manual intervention, from the trade execution platform, through TFG Complete, to its administrator, thereby minimising operational risk. 

Fenwick adds: “Our clients have come to expect that TFG will provide them with an integrated, robust and real-time platform to manage their operational environment. Our platform delivers true straight through processing and enables sophisticated risk management and portfolio valuation, giving fund managers a truly effective way of controlling costs whilst allowing for increased trading capacity.”

TFG Complete is configured to address the needs of each individual firm, as no two funds are the same. It allows flexibility in its approach to trade confirmation and reconciliation to ensure middle office needs are met. A fully-integrated platform with a high degree of automation, TFG Complete is helping hedge funds to both reduce operational risks and the costs of running middle offices, and this at a time when investor and regulatory scrutiny are more onerous than ever.

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