Advancement of technology creates efficiencies and market access, but a new and ever-transforming world for Executives in Fund Operations
The quantum leap in technology available to alternative asset investment managers has unquestionably increased productivity and market access for asset managers, and allowed managers both market access and opportunities for growth.
However, the impact of technology has led to critical and ever-changing decisions regarding the operations and infrastructure of investors and managers. How operational executives address potential operational pitfalls related to technology, among a myriad of other evolving
concerns, has become one of the daily challenges that asset managers face every single day.
Managers must continue to innovate and allocate their resources to technology, while handling increasingly sophisticated challenges like cybersecurity, and integrate those concerns with additional regulatory reporting demands, investor relations requirements, and extensive
required third party service provider relationships. Measures to protect the information of portfolios, client names, and even underlying hedge fund managers are top priorities given this network of relationships and external concerns.
Hackers and rogue nations have become an ever-present threat to managers, as evidenced by the Great Online Bank Robbery of the Carbanak Cyber Gang stealing $1 billion from 100 banks worldwide, siphoning money directly from banks and financial institutions.
These external threats, along with investor demands for greater transparency and an ever-changing regional and global regulatory environment, which also affects operations in how firms track regulatory requirements to remain compliant in allocating trades, have made operational integrity and due diligence a constantly evolving mandate for both fund managers and investors.
This is a must-read for investors, operational executives, and fund managers.
The Opalesque 2015 Fund Operations Roundtable, sponsored by Arthur Bell CPAs, took place September 2015 in New York with:
Alan MacKenzie, Chief Financial Officer, Chief Operating Officer, Gargoyle Group
Corey McLaughlin, Member, Arthur Bell CPAs
Stephen Miller, Chief Financial Officer, Chief Compliance Officer, New Providence Asset Management
Vincent Molino, Senior Vice President, Director of Operational Due Diligence, Permal Group
Peter Murrugarra, Managing Director, Head of Manager Due Diligence, ClearVest
The group also discussed operational topics such as:
Both investor and manager due diligence processes
Investor red flags with managers, and how to make a fund more attractive to investors
What issues keep operational executives up at night?
Investor perspectives on: governance, compliance, background checks, structure, conflicts of interest, side letters, commingled vs. separate accounts, valuations, and more
Cybersecurity policies and measures. Is it worth purchasing a cyber-security insurance policy?
Why managers must also push their service providers to implement cybersecurity policies
When to utilize your in-house technology, or migrate to third parties
Why emerging managers need to know their “Breakeven AUM”
Guidance on how to handle markets swings and a sudden increase or decrease in assets
How and when to communicate with investors
Will there be a standard due diligence questionnaire in addition to the AIMA DDQ to facilitate the investment process and save time?
Relevant changes in taxable income and tax classification by the IRS
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