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From the Opalesque Team:
Investment and hedge fund managers, to correct operational failures in their respective systems, are now exploring new market dynamics and complex investment strategies and products.
To further prevent the occurrence of causal factors including theft and misappropriation and non-existence of assets (fake assets, Ponzi schemes etc.), studies have suggested that internal and external controls be put in place.
Re-building a new operating strategy
Hedge fund due diligence provider Castle Hall Alternatives recommends that internally, “hedge fund managers need adequate accounting systems and appropriate segregation of duties to correctly record and then reconcile portfolio holdings and transactions.”
A study by Deloitte Consulting LLP recommends that a new operating strategy be now required to check and double-check the various services extended to the firm. A “middle office and back office that would coordinate these prime network of services including the accounting systems, asset valuations, among other vital transactions,” should be set up.
As the services provided by these extension offices are complex and could most of the time be outsourced, Deloitte and Castle Hall agree that a hedge fund administrator be appointed.
Castle Hall points out that externally best practice universally calls for “a full service administrator to maintain transaction and accounting records and reconcile those records to independently...................... To view our full article Click here
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