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12 July 2022

Four Reasons to Maintain an Internal Book of Records

The hedge fund industry’s changing dynamics and increased competition are making robust and flexible reporting essential to a fund manager’s business. Advances in technology and service are eliminating the roadblocks to implementing an accounting system. Internal accounting is no longer just a nice-to-have for the largest, best-resourced hedge funds, but is now within reach of all funds, regardless of size or complexity.

Why should you maintain an internal book of records?

  • Investor due diligence: Investors require firms to satisfy increasingly rigorous operational due diligence demands. As funds and strategies proliferate, firms need to differentiate among the competition to attract inflows. Investors want to ensure their investments are accounted for accurately. Firms that can demonstrate a robust operational infrastructure will be more attractive to investors.
  • Client service expectations: Institutional investors require high quality, responsive and efficient services, including real-time access to data, not just intra-month or end-of-month. Investors are looking to firms to that can better mitigate market and operational risks. A shadow accounting infrastructure provides oversight and transparency, enabling a hedge fund to monitor, control, and reduce both risk and reliance on its fund administrator. It also equips managers with the data to create and deliver reports without waiting for the books to close.
  • Operational flexibility and independence: Shadowing with counterparty reconciliation delivers operational flexibility and independence, key components in mitigating a fund’s risks. An accurate accounting record enables hedge funds to verify the data they receive, as well as identify and fix any errors early, saving time. Because the data is independent, the manager is no longer simply mirroring the administrator, giving the firm autonomy and full control over all its data.
  • Improve fund oversight: Direct access to financially accurate, real-time data offers a valuable foundation for a firm’s entire infrastructure. The ability to access structured and enriched holdings data and exposure reports, as well as slice and dice by strategy, amplifies the effectiveness of management information dashboards, front-office tools, and risk management functions that depend on this data.

How should you maintain an internal book of records?

SS&C Advent Geneva® is the leading global portfolio accounting platform, delivering the capabilities needed to shadow effectively and catch potential errors, all while being efficient and easy to use. Geneva provides users:

  • Comprehensive instrument coverage: Geneva has long provided comprehensive instrument coverage, for global equities and fixed income to derivatives and bank debt. More recently, we added support for private equity and private debt to reflect the changes in the market and ensure we continue to cover any asset, in any region, in any structure.
  • Full ledger and support for daily NAV calculation: Geneva incorporates a full general ledger and supports accurate, daily NAV calculations. It offers investor accounting and servicing for onshore and offshore funds, and efficiently handles closed-period accounting.
  • Comprehensive accounting capabilities: Geneva generates comprehensive accounting calculations, providing reliable data outputs without operational complexity. By inputting the same trade files that are sent to the fund administrator and adding market data, Geneva produces a NAV that investors can trust.
  • Managed Services: Here’s the good news: the award-winning Geneva platform and its ecosystem of complementary solutions are now available as a managed service. Clients can choose from a customizable menu of operational services to ease the burden on your middle and back offices

As the industry shifts, fund managers need a true and trusted accounting solution to help mitigate or reduce errors and inconsistencies, which can result in a loss of time and resources as your team struggles to identify and resolve discrepancies. Ultimately, Geneva enables hedge funds to focus on their core competency: generating alpha.

To learn more about Geneva, visit our website, or request a demo today.