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Serving Asia’s hedge fund market

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Strategic Financial Solutions, the company that created the PerTrac financial suite – which includes the PerTrac Desktop Analytical Platform, PerTra

Strategic Financial Solutions, the company that created the PerTrac financial suite – which includes the PerTrac Desktop Analytical Platform, PerTrac Net, PerTrac Publishing and Design and PerTrac Web – was established in 1996. Over the past decade, the flagship PerTrac Desktop Analytical Platform has become the world’s leading asset allocation and investment analysis software, used by more than 1,500 corporate, institutional and private clients in 46 countries.

The company’s founders, Milt Baehr and Frank Smith, who came from the alternative investment market, created PerTrac because at the time there was no open architecture investment analysis platform geared to the needs of the sector. Such limited analytics as existed worked only with the proprietary systems of data providers. There was no platform that allowed one to bring in multiple data sources, which is vital for a hedge fund investor, because no single data source captures all of the available fund information. In fact, SFS completes a regular hedge fund data study to shed light both on the universe of hedge funds as well as the coverage by data vendors.

PerTrac is particularly widely used by funds of hedge funds, which use it for manager screening, asset allocation, portfolio construction and peer group analysis – all the analysis functions they need to run their business. It’s also used by funds of funds and hedge funds to produce statistical analysis of a fund and its competitors for current and potential investors. In addition, PerTrac is used by most of the major banks and brokerages as well as family offices, endowments and foundations.

SFS already has an office in Tokyo with two sales and support staff, but it is about to establish a presence in Hong Kong as well in order to serve a growing client base in the Asia-Pacific region, currently numbering nearly 100. Hong Kong was chosen over other potential locations in the region because of SFS’s January acquisition of Whittaker Garnier, the leading provider of customer relationship management software to the alternative investment market, which has an existing office in Hong Kong.

The WG CMS product was a logical acquisition target for SFS, since in addition to fund analysis, managers and investors alike need to manage contacts, documents and information. They may have files spread over many different computers, and incoming communications going to a variety of mailboxes. Often there’s not a good trail of which documents have been sent out and which have come in. Keeping track of this information is important to an investment manager in order to manage client relationships better, and to investors in the due diligence and ongoing monitoring process. It makes it easier to run a business and provides an audit trail for information.

Asia is a vast area of opportunity because alternatives are really taking off, hence the need to boost sales and technical support in the time zone. SFS has clients throughout the region, and has donated software to universities such as the National University of Singapore as part of a programme to make people more familiar with its products as the use of alternative investments grows.

The pace of investment in alternatives in Asia has already quickened considerably. Providers focused on the Asian market such as the Eurekahedge and Asiahedge databases have helped to focus attention on the area, and we expect the number of single manager funds, funds of hedge funds and the amount of money from the area allocated to hedge funds all to increase dramatically over the next 18 months.

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