10. September 2010 21:52
Adam Alesandro, Chief Technology Officer from fund administrator AFA (Advanced Fund Services) shared his thoughts on technology as a differentiator in the fund admin space. AFA was founded in 2007 by Peter Young formerly of Citi Hedge Fund Services and BISYS and uses SunGard’s VPM product suite in their firm.
Adam stressed the flexibility of the platform when choosing a portfolio and partnership accounting package and noted the three levels of software packages as well as the pros and cons of each: excel based, proprietary and enterprise level systems. Two of the main differentiators are whether the software uses "structured data" as well as whether the system is scalable. He noted that while excel is flexible and generally easy to use it is typically not sufficient in today’s demanding hedge fund back office environment.
Adam also highlighted the importance of "straight through processing"- limiting the amount of manual intervention and the potential errors and additional manpower that goes along with those entries that need to be done outside of a fully automated workflow.
The group discussed the potential of the administrator and their technology’s ability to enhance and facilitate the internal processes and policies of the hedge fund CFO. AFA frequently provides customized reporting to the funds as often as daily to help the fund back office in their responsibilities to their clients. For those funds that chose to not shadow their administrator’s work on a daily and monthly basis AFA can provide reports and extracts to compare to the prime broker’s data in helping the back office get a comfort level that their controls are sufficient.
For smaller funds or funds with limited internal systems the fund administrator should be able to provide services to facilitate working with third party risk management and reporting firms.
Additionally, the ability of the fund administrator and their systems to provide daily NAV’s has become an increasingly important function of hedge funds with limited internal resources.
The luncheon concluded with a networking session where many hedge fund executives got to share ideas between themselves as well as key service providers.
-Duncan Huyler, CFO, 360 GLOBAL CAPITAL and Executive Board Member, the HFBOA