To avoid the strain on in-house back-office teams, fund managers have, in recent years, increasingly turned to cloud-enabled hosting and managed services to support their operations.
In addition to providing robust accounting and world-class fund administration, SS&C is well-positioned for institutions to use an extensive array of solutions across the Geneva platform, either in a fully-hosted and fully-outsourced environment through SS&C GlobeOp, or in a co-sourced arrangement through SS&C Advent Managed Services.
One of the primary differentiators of the SS&C Advent Managed Services offering is that, while the Advent team maintain and service the system(s) on the client’s behalf, the client has full control and ownership of that system within the Geneva ecosystem. This allows for complete customisation of the user experience for those using Advent Outsourcing Services®, with the full knowledge that SS&C Advent is there to provide operational support every step of the way.
Some of these solutions include:
Reconciliation – including daily positons, transactions and cash reconciliation to all relevant fund counterparties and month-end position and P&L reconciliation to custodians and fund administrators.
Security Master – manage all data feeds and inputs for security master and referenced data configuration across all asset classes.
Trade processing – manage and monitor data feeds from Order Management. Systems and input trades that don’t flow from an OMS, such as private investments, as well as manage referential data set-up when needed, including strategies, custodian accounts and brokers.
Asset Servicing – manage and maintain event processing from data providers, as well as process activity based on agent notices.
Investor servicing – using Geneva, the operational services team manages all aspects of investor servicing, including:
- P&L allocations
- Tax accounting
- Fee calculations
- Investor reporting
Co-sourcing is the main aspect of Advent Outsourcing Services.
“I would estimate that 90 per cent of our new clients have us host the technology, and probably half of them have us perform some type of operational services in a co-sourcing arrangement,” confirms Nolan.
In such a co-sourcing arrangement, a fund manager might licence Geneva, but not touch anything operationally. The SS&C Advent team handles all operational workflows on behalf of the manager, but it is still their data. They always have the option to log in and use Geneva, whatever task they need to perform.
“We have some clients where we shadow their investor allocations even though they aren’t using Geneva. We are very flexible as far as what we offer and our clients appreciate that. It means they’re not boxed in,” says Nerlekar.
What makes this possible is because SS&C Advent owns all of its technology. Everything is proprietary to the firm. It’s a key point of differentiation and means that fund managers are presented with a host of options, as opposed to an ‘all or nothing’ option, that best meet their individual business needs.
Having this flexibility is integral to the manager feeling in control when opting to use managed services. If the manager’s fund AUM shrinks, or they scale back the number of fund counterparties and decide to take more middle- and back-office tasks in-house, there’s no disruption to doing so. Geneva is at the heart of everything; the client owns it. So whether they scale-up or scale-down the co-sourcing arrangement, it has no impact on their day-to-day business operations.
Data matching at scale
SS&C Advent is one of the world leaders at capturing information from banks, fund administrators and other financial institutions. Some of its clients might be using ten prime brokers, four administrators, five banks, with their fund positions and cash held far and wide. That is a lot of data to match.
“As a company, we excel at capturing that information, normalising it, managing it, and matching it accurately,” says Nolan.
“We are highly effective at capturing data from fund administrators and the Street, analysing that information, matching it, and doing a host of reconciliations in Advent Geneva. Why would a fund manager want to reinvent something that’s been tried and tested for so many other fund managers?”
“We also provide a framework that supports data governance functions as well as customised, task management. We’ve built a number of tools that we can layer on top of their workflows to make operations work easier. Ultimately, managers want to focus on generating returns, they don’t want to be building technology solutions and incurring the costs that come with that.”
Geneva lies at the heart of SS&C Advent’s managed services offering. Used by many of the world’s largest hedge fund managers, over the years it has been continually improved to handle the set-up and management of all fund structures, all the accounting, position keeping and cash flow rules, and all of the investor services reporting.
“Our goal is to automate the investment accounting for all legal entity fund structures as much as humanly possible,” asserts Nolan. “That requires a lot of data within the system; whether it comes from order management systems, pricing, security master files, corporate actions and so on.”
“We’ve built tools that help us manage all of that data, and provide a transparent view into the management of all that data. Was everything loaded correctly? Were there any exceptions? Are there going to be issues with next day reconciliations? Our tools are designed to answer those types of questions and solve those problems for clients.”
Evaluating the right technology partner
When choosing any managed services provider, fund managers need to know that they are able to retain clear oversight and control of their funds. Advent takes a detailed, consultative approach to understand what internal operations a manager currently has, where they are trying to get to, before recommending the best solutions.
Nolan refers to three key factors for fund managers to focus on when evaluating a managed service provider.
“Firstly, what is the technology that we are using to do all of the things we say are going to do? We spend time going through things like our reconciliation tool, our task management tool, our governance tool and so on. Our clients want to know that the tools we use have the right business logic behind them.
“Secondly, who are the people doing this? Where are they from, where do they work, and what is their expertise?
“Thirdly, we encourage clients to speak to their peers who are using our managed services. We can tell them a lot and show them a lot, but the best thing we can do is put them in touch with other similar managers, to share their own experience.”
“We think those three aspects are the best way to evaluate us.”