Shadow Accounting Services

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Shadow Accounting Services

What are Shadow Accounting Services?

Shadow accounting refers to maintaining two sets of books of accounts to detect mistakes and inconsistencies. Shadow accounting services serve the purpose of providing transparency and better controls to fund managers. 

Fund Managers like Hedge Fund Managers who rely on fund administrators for their books of accounts are the best fit for availing shadow accounting services.

In shadow accounting services, there runs a parallel book of accounts to fund administrator books of accounts to validate, control, and de-risk managers for vulnerabilities across the fund's NAV components.

Need for Shadow Accounting Services

With increasing sources of information and data, investors always demand more transparency and accuracy. The increasing expectation on the investor’s front can be only fulfilled with robust operational infrastructure and resources. Having shadow accounting in place provides greater flexibility, controls, and foresight on operational due diligence and processes.

Investors always look out for the safety of their investments and seek managers to continuously and proactively monitor and validate portfolio reporting. With increased options, an investor not only demands standard reporting but look for more details promptly from managers, whereby managers at the same time rely on fund administrators. Shadow accounting helps fill the gap here and manage expectations with controls and reporting built around shadow accounting services.
With a shadow accounting service provider, managers can build scalable infrastructure, more decision-making capabilities, accurate and timely flow of information. Having an independent party shadowing books of accounts also tremendously increases and boosts investor confidence.

In an illustrative manner, shadow accounting services have supported the evolution of asset managers with their strategies, asset class, and structure. It has also resulted in co-sourcing of resources and relieving managers from the hustle and bustle of the middle and back-office process. 

Fundtec Service Coverage

Fundtec’s service coverage is more than just maintaining an additional book of accounts and goes behind building scalable infrastructure and air-tight controls. Here is some scope of service coverage:

  • Reconciliation with Fund Administrator:

    • Position

    • Cash

    • MV

    • P&L

  •  Reconciliation with Prime Broker and Custodian:

    • Position

    • Cash

    • MV

  • 3 Way Reconciliation with Street and Fund Administrator 

  • Downstream data reconciliation 

  • Trade Lifecycle Management 

  • Product Control

  • Asset servicing 

  • Corporate Actions

  • Flash Profit & Loss Reporting

  • EOD Trade Reporting

  • Valuation as per manager’s policy

  • Performance Estimates Reporting 

  • Periodic Performance Reporting

  • Shadow NAV Pack

  • Break Resolution & Escalation with Street

  • Break Resolution & Escalation with Fund Administrator 

  • Accrual of Income & Expenses (Trade & Non-Trade)

  • Monthly Cash & Position Reconciliation with Street

  • Monthly Cash & Position Reconciliation with Fund Administrator

  • Management fees computation & comparison

  • Performance fees computation & comparison

  • Investor Allocation

  • Investor Allocation Comparer with Fund Administrator

  • Investor Statement Validation and Checks   

 

 

Besides regular scope for shadow accounting services, Fundtec works with managers very closely to support them for any other administration, compliance, and regulatory support functions.
Clients are always at the center of Fundtec’s services intending to provide them an edge of working with shadow accounting service providers like us.

Fundtec’s Value Proposition 

With years of experience working with a variety of managers across the globe, we are positioned to deliver top-notch services to clients. Here are some factors:

  • 24/5 Availability: Our "follow the sun" model ensures that Asset Managers, irrespective of time zone, will get services when they need them.

  • Solid Documentation:  When someone is expected to perform a task, the most beneficial thing to do is create process documentation. That is what we do in our process across all the services. Our SOPs are updated regularly, and our team delivers with certainty and confidence. Resources may come and go, they get migrated to different roles within the organization, or they're out sick or on vacation, whatever the case may be, when another team member steps in, you need good documentation with training in place to ensure continuity. 

  • Customized Offerings: One shoe size doesn't fit all, so Fundtec customizes and tailors its solutions to fit the unique needs of every client.

  • Industry Expertise: Fundtec's team comprises professionals coming with a wealth of experience from investment banks, fund admin firms, and technology giants. We have expertise in handling all types of asset classes (from listed securities to OTC products), and reports from different fund admins, brokers, and custodians.

  • Scalability: Fundtec empowers clients with better scalability via plug and play model which is always customized to the client's needs.

  • Cost-Effective: Fundtec's expertise, innovation, experience, and result-oriented approach on operational aspects enable us to drive greater process efficiency, and we pass the benefits and savings to our clients.

  • Transition and Change Management experts: With years of experience in handling transitions, we always consider all stakeholders for changes and transitions. Our client-centric approach enables a smoother reconciliation transition for all types of clients. 

  • ISO Certified: We at Fundtec understand that every piece of information is crucial for our clients, so we follow the highest standards for maintaining quality and data security. Fundtec is ISO:27001 and ISO:9001 certified.

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SHADOW ACCOUNTING  SERVICES