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Scott Price From Komfie Manalo, Opalesque Asia:

Shadow accounting, or shadow system, provides hedge fund investors with additional level of comfort without having to change a valuation process that is working fine. More importantly, the system is more cost effective than maintaining a full administration service, said Custom House Groups Vice President Scott Price during the latest Opalesque New York Roundtable.

The Roundtable was co-sponsored by Custom House, a hedge fund administrator, and Taussig Capital, a consultancy firm that creates financial services startups.

"Another area where we as a firm are seeing increased activity is regarding our shadow accounting service," Scott told participants of the Roundtable. "Shadow accounting is typically requested by either self-administered funds or for funds that have smaller name administrators. The back office function, either the administrator or internal valuation team, could be doing a perfectly great job with the NAV, however, investors could be uncomfortable with the valuation process."

Shadow accounting can be defined as a "system in which two separate sets of financial books are kept for the purpose of f......................

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