US EAST COAST 2012 - HFMWeek

US EAS T COAS T 2012
ADMINISTRATION
“A best-in-class risk and
portfolio management
system and powerful
valuation engine underpins
our single database model”
tors adapting and extending their technology platforms
to accommodate manager requirements
LL: HedgeServ helps managers view and manage both
their portfolio risk and operational risk from a single system.
Achieving this capability required a non-traditional
set of building blocks. The HedgeServ platform operates
on a single database, which supports all asset classes. All
trades enter the platform from a single point of capture.
Data streams in real-time to power an integrated suite of
front, middle, and back office applications across our platform.
The single database model enforces accuracy and
controls, while providing managers with a consistent data
set supporting their firm-wide workflows.
We uniquely chose a front office starting point when
designing the HedgeServ platform. This enables us to
communicate with, and report to, managers in the same
language they use internally when talking about and managing
their businesses. A best-in-class risk and portfolio
management system and powerful valuation engine underpin
our single database model. We’ve integrated into
this core database a proprietary general ledger and suite
of middle and back office tools. Positions, cash and accruals
all reside within one system. Managers have the ability
to slice and dice their NAV and profit and loss by any
portfolio attribute and can drill down to the most granular
level on positions, valuations, risk analytics, and underlying
market data.
Best practice has moved to T+0. The HedgeServ platform
captures all trades in their native form, regardless of
asset type. All HedgeServ applications accurately reflect
the full attributes, terms and conditions of each unique security
type, including complex OTC derivatives and bank
debt instruments. Besides facilitating fully automated
support of the post-trade investment lifecycle, this level
of process integrity allows us to expose our workflows to
managers and investors in a fully transparent manner. It
also translates into more efficient month-end and yearend
processes.
HFM: Have administrators made progress in lifting the
veil on their processes in response to increasingly rigorous
operational due diligence by investors If so, has
this increased transparency or created additional benefits
for managers
LL: Managers are increasingly tasked with demonstrating
3600 transparency to investors – not only from a portfolio
perspective, but also the operational processes underpinning
NAV and performance calculations. HedgeServ operates
on an open and shared platform with our clients, providing
complete operational transparency and real-time
views of all workflows and calculations we perform, including
valuations. Managers can access full audit trails and
drill into any relevant documentation for any process. An
open environment enables real-time oversight and exception
management, both critical when an administrator is
performing front and middle office support for a manager.
From a manager’s perspective, you could actually say we
operate on a single server model. The HedgeServ platform
is a fully hosted solution, with each manager in their own
unique environment and with their own instance of applications
and security master. Managers have full use of the
entire suite of HedgeServ applications (including on-demand,
read-only access to all their accounting data). There
is only a single shared set of tools across our platform; both
HedgeServ staff and our clients’ employees work off the
same tool set on a daily basis. Everyone is on the same page,
which increases accuracy and efficiency.
A shared, open platform helps managers avoid the cost
and inefficiency of shadowing their administrator. It is a
powerful control in ensuring accurate accounting. HedgeServ
provides managers the confidence of having total,
on-demand transparency into all current and historical
accounting data comprising their official books and records.
A fully transparent environment, coupled with very
experienced fund accounting professionals, has resulted in
HedgeServ’s track record of calculating precise and timely
NAVs. We’ve never re-stated an NAV due to an accounting
error.
The HedgeServ platform also delivers data convergence
– a centralised, independently derived data set, fully
reconciled to the fund NAV, which managers can use to
meet their business, investor, compliance and regulatory
reporting requirements. Managers have 24/7 access to
the same dynamic reporting tools that HedgeServ professionals
use to create customised portfolio, accounting,
risk and investor reports. Several managers also stream
data from the HedgeServ platform to feed their own internal
systems. An open, shared platform gives managers
the ability to touch their data and do their jobs even
from outside the office, anywhere in the world, from any
internet-enabled device.
HFM: How does HedgeServ keep its technology current,
and keep pace with manager needs
LL: HedgeServ is committed to agile development. Automated,
highly-controlled monthly release cycles keep
our platform nimble and responsive to client requests
and our own business needs. Our IT developers work
closely alongside our business line owners and client
service professionals. Most importantly, we apply this
same collaborative approach with our clients. By generating
a constant flow of ideas, HedgeServ has closed the
innovation gaps often associated with traditional administration.
The new generation of administration delivers
capable, usable and continuously enhanced institutional
infrastructure to managers. n
36 HFMWEEK.COM