Asset+: Maximising Operational Efficiency: Minimising Operational Risk
  Challenges for Fund of Funds Managers





If you administer your Fund of Funds programme on Spreadsheets or if you use a complicated hybrid-system then you should consider using Asset+


  


 
 Operational Risk

Historically Fund of Funds managers have not prioritised the management of Operational Risk concentrating instead on improving their rates of return.

Investors they argue, have been satisfied that the diversified nature of their holdings have given a degree of in-built protection and this, together with the knowledge that sub fund valuations were provided by third party administrators gave adequate protection.

 
 Changing Investor Profiles

A recent survey by Northern Trust and Professor Amin Rajan suggests that in addition to those institution that are already invested in Hedge Fund of Funds and plan to increase their investments there was a second group of investors representing 25% of those surveyed that were considering investing in Hedge Fund of Funds over the next three years.
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The fiduciary responsibility placed on institutional investors by trustees have necessarily led to more emphasis upon operation risk management. There is some evidence here to suggest that this institutional money is already going disproportionately to larger funds certainly, in recognition of these changes the major Ratings Agencies have recently introduced Operational Risk ratings for Hedge Funds and Fund of Funds.


 
 Regulatory Changes

Although different regulatory regimes take different approaches it would appear that over time retail investors will increasing be permitted to invest in alternative funds. The most likely route will be through Fund of Funds. While not all Regulators have set out a policy, those that have (FSA CP 07/6) suggest that main areas of concern are proper Due Diligence procedures and the accurate valuation of funds together with robust systems to monitor liquidity.

 
 Operational Cost Pressures

Asset+ provides an enterprise application that is ideal for the management of Fund of Fund portfolios. By implementing the Asset+ platform Fund of Fund managers greatly improve their Operational Risk Profile while deriving benefits in terms of workflow efficiency that allows them to scale up their operations without increasing headcount.
 
 
 
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