Summary
The purpose of this concept is to save money for fund managers and create a streamlined process that leads to efficient, accurate and cost effective reporting.
Thank you for visiting this website. The site describes an idea that is being developed that we believe is a better and more efficient solution to hedge fund back/middle office operations. We view this as the next evolution in operations that will enhance some of the practices currently in place today. This is an anonymous exchange of ideas. I appreciate your visit to the site and hope you will leave feedback in the form below.
We have a deep knowledge of accounting, audit and tax matters related to hedge funds and other investment partnerships. Trained by Big 4 accounting firms and transitioned into the back offices of private funds, we have developed a process and know-how that bridges the gaps between fund managers, third party administrators, tax accountants, auditors and other parties interested in hedge fund reporting.
In the past 10 years, third party administrators have developed tremendous sophistication in the process of reconciling trade data. Yet, a fund manager still needs someone to verify that the final product is correct. This is typically done with personnel hired by the manager at the manager's expense. We aim to enhance what happens between the third party administrator striking a NAV and how the fund verifies and uses the accounting data. Additionally, as accountants, there are many more back/middle office functions that an outsourced group can perform for the benefit of a fund manager.
Rather than increasing staff levels on the manager's payroll, we believe an outsourced partial shadow accounting group is a better solution to represent a manager, sign off on computations and coordinate various reporting requirements such as audits, K-1 / tax preparation and other compliance reporting. This type of accounting work may be an expense of the fund as opposed to the manager. A shadow accounting group can also normalize data in a set of standardized work papers to be used for various other tasks and reporting as mentioned above. This group will look at the accounting data in a holistic way and efficiently gather data throughout the year that will be used for reporting. If done properly, duplication of data gathering can be minimized.
Additionally, We believe an independent shadowing group may be able to obtain better terms with service providers because of the aggregated size of clients being serviced by the outsourced shadow group rather than individual managers engaging these services by themselves. Better terms will benefit each fund manager.
We have a deep knowledge of accounting, audit and tax matters related to hedge funds and other investment partnerships. Trained by Big 4 accounting firms and transitioned into the back offices of private funds, we have developed a process and know-how that bridges the gaps between fund managers, third party administrators, tax accountants, auditors and other parties interested in hedge fund reporting.
In the past 10 years, third party administrators have developed tremendous sophistication in the process of reconciling trade data. Yet, a fund manager still needs someone to verify that the final product is correct. This is typically done with personnel hired by the manager at the manager's expense. We aim to enhance what happens between the third party administrator striking a NAV and how the fund verifies and uses the accounting data. Additionally, as accountants, there are many more back/middle office functions that an outsourced group can perform for the benefit of a fund manager.
Rather than increasing staff levels on the manager's payroll, we believe an outsourced partial shadow accounting group is a better solution to represent a manager, sign off on computations and coordinate various reporting requirements such as audits, K-1 / tax preparation and other compliance reporting. This type of accounting work may be an expense of the fund as opposed to the manager. A shadow accounting group can also normalize data in a set of standardized work papers to be used for various other tasks and reporting as mentioned above. This group will look at the accounting data in a holistic way and efficiently gather data throughout the year that will be used for reporting. If done properly, duplication of data gathering can be minimized.
Additionally, We believe an independent shadowing group may be able to obtain better terms with service providers because of the aggregated size of clients being serviced by the outsourced shadow group rather than individual managers engaging these services by themselves. Better terms will benefit each fund manager.
How will a fund manager benefit?
- Back/Middle office personnel and scalability. Outsourcing shadow accounting functions allows a manager to focus on what he or she does, manage assets, without managing accounting personnel. Fund managers can gain scalability by outsourcing these accounting functions.
- Cost benefit. An outsourced shadow solution may be an expense of the fund, similar to other accounting and tax functions. It is an extension of third party administration and is on par with other audit and tax preparation fees which are also borne by each fund. From a business perspective, it makes sense to outsource these functions. A manager can shed unnecessary payroll expense and only employ certain key personnel; Perhaps a CFO or controller to concentrate on accounting for the advisory business.
- Who's checking the third party administrator's work? Third party administration has come a long way in the past 10 years. But how can a fund manager guarantee that the NAVs computed by the third party administrator are correct throughout the year? The key is to find a balance with the right amount of shadowing. In addition to verifying NAVs, the outsourced shadow group can also help with tax planning as well as field tax questions from partners of the funds. This group can be viewed as an accounting/tax advisor to the fund manager who also maintains a level of independence.
- Benefits of size. Third party administration costs are less expensive with higher assets under management. An outsorced shadow group will get better pricing and terms for the manager than any underlying fund manager individually. Use the power of group size to get better terms.
- Benefits of standardization. Standard and complete workpapers prepared by the shadow accounting group lead to more efficient audits and tax preparation. This efficiency leads to less expensive professional fees.
What we are
|
What we are Not
|