Automation as a key to high quality service
Smart, repeatable and “hands off” technology plays an ever-growing role in the delivery of fund administration services. Two primary drivers of a fund administrator’s success are automation and straight-through processing (“STP”).
“Most funds would agree that their experience with a fund administrator primarily comes down to client service, accurate and timely delivery of services and cost,” says Jorge Hendrickson, SVP Head of Sales and Marketing at Opus Fund Services. “Automation and Straight-through-processing (“STP”) are what allows, or prevents, these from happening.”
Opus Fund Services is focused on scaling its proprietary technology to achieve these requirements and doing so in a way that ultimately makes sense for both startup and established funds. They focus on automation and eliminating any human interaction on any part of the workflow wherever possible. This automation feeds into delivering services in a timely, efficient manner. The idea of STP is not something new, but achieving it is difficult and takes time, requires significant investment, and a high pedigree team who understands every detail. Having gone the “build versus buy” route has given Opus a unique advantage in this race, as it is not relying on other third parties.
To illustrate, one of their innovative and intuitive STP products is Opus JET, which creates “straighter” through processing. A key component and traditionally manual aspect of fund administration is determining and then processing the accounting entries needed to generate a Net Asset Value. JET allows the generation of NAVs at a previously unthinkable level of speed and efficiency. Utilising proprietary technologies previously implemented across its Shared Service teams, JET automatically retrieves data from multiple external sources and normalises the information into tens of thousands of accounting entries per month. Technology like JET enables more streamlined audit trails, risk mitigation, and business intelligence for Opus clients.
Everyone wants the best provider they can get at a cost that makes sense to them today. If you want to be in the launch space as a provider, you need to consider how to service funds at a price point which makes most sense. The solution is going to come purely from STP and automation. The goal is to help funds get into business, not to become a barrier to entry.
Part of the process for fund admins entails knowing which services are going to be most applicable for a specific fund and as they grow and evolve, what that means for the admin and the “inputs” that we will be receiving. Fund admins are going to be asking questions like: are inputs going to be submitted on time each month? Who submits inputs? This information feeds into STP; if information is entered late or incorrectly, the process is hindered, and technology put into place cannot function properly. In the instance of JET, if inputs aren’t entered in a timely fashion, the product cannot automate the process.
In addition to hedge funds, Opus is working with launch managers across real estate, venture capital and private equity. “These managers are facing similar operational challenges and rely on their providers to scale alongside them. Interestingly, PE/VC/RE is a bit behind their hedge peers and it is not uncommon for them to be learning about fund administration for the first time and are seeking to understanding how it fits into their world,” notes Hendrickson. “They are realising that handling fund administration tasks internally no longer makes sense from a time, resource, cost and independence perspective. Their investors are also realising that they prefer to invest with managers who are working with technology driven fund administrators.”
SVP, Head of Sales & Marketing, Opus Fund Services
Jorge Hendrickson is based in our New York City office. Prior to joining Opus in February 2013, he worked in Prime Brokerage Sales and Capital Introductions at Concept Capital Markets (now Cowen Prime Services). Previously, Jorge worked at Bay Head Capital allocating seed capital, managed accounts and infrastructure services to launch managers. Prior to this, he also held a variety of operational, trading and marketing roles at Intrepid Capital Management in NYC and Bridgewater Associates in CT.