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Shadow accounting is the process of maintaining an additional set of financial books for the purposes of comparison with the third-party administrator.
Shadow accounting helps funds with the flexibility to determine their own schedule. While third-party administrators are held to service level agreements, they often do not cover ad-hoc reporting requirements and if they do, the agreements usually do not offer turnaround time that are typically expected by decision makers. With shadow accounting ability to report allows funds the opportunity for off-cycle reporting and real-time analytics.
Producing a second set of books gives funds an opportunity to apply their valuation and pricing strategy to their portfolio. Theoretically, this should match the admin’s valuation policy, but many times differences surface due to alternative market data sources. In the end, shadowing the portfolio leads to informed decisions when valuing investments.
Fundtec’s Service Deliverable
Our shadow accounting services goes beyond conventional shadow accounting processes and helps fund managers with multiple synergies for middle & back-office function. We help managers eliminate redundant cost by streamlining an extra layer of controls across middle & back office with our shadow accounting process to ensure delivery of accurate and timely Net Asset Values (NAV).
Fundtec’s comprehensive coverage on shadow accounting services can be tailor made based on the scope which can also include liaising with Fund Admin for complete break resolutions.