09.01.2011
By Terry Flanagan

Regulations Drive Hedge Fund Administration

Back-office functions are ramping up automation.

A wave of global regulatory reform, combined with the prospects for renewed growth in the investment management industry, will lead to transformation of the back office, with fund administrators investing in their IT infrastructure to keep up with increased demands.

A one-two punch of increased growth and regulation is not only impacting fund companies, it directly affects service providers as well.

“Service providers continue to face the inherent risks associated with outdated, error prone manual processes and spreadsheets, resulting in information that is redundant, costly, and threatens data integrity,”  Scott Powell, product manager at Confluence, a provider of investment data management automation, told Markets Media.

Forward-looking service providers are automating critical back office processes involving the collection, creation, confirmation and delivery of fund data.

The benefits of automation include reduction of reporting cycle times from weeks to hours, or from hours to minutes.

“Additionally, by centralizing clients’ fund data, and drawing on that data across many types of reporting requirements, service providers create new efficiencies while eliminating data errors,” said Powell. “Creating a technology infrastructure such as this also helps service providers reduce costs by enabling them to do more without the need for additional staff.”

Confluence’s core product, Unity, automates the collection, creation, confirmation and delivery of fund data for multiple critical fund administration processes. “The platform empowers fund companies and their service providers to reduce costs, eliminate risks, elevate service levels and scale with agility and control,” Powell said.

Unity solves a wide range of fund administration problems, including performance calculation and reporting, financial and regulatory reporting and expense management.

“A special feature of Unity is that it leverages a central repository of fund data, entered only once and available for multiple reporting purposes,” said Powell. “This enables fund companies to automate vital regulatory, marketing and reporting functions, with confidence in the integrity of their reports and data.”

Clients of Confluence include mutual funds, hedge funds and other alternative investments, funds of funds, collective funds, separate accounts, variable products, and fund service providers.

Related articles