Advent unveils reporting solution for hedge funds

LaunchesOperational RiskPrime BrokerageSecurities FinancingTechnology
04 Apr, 2012

Advent has launched a margin, financing and stock loan reporting solution for hedge funds clients.

The cloud-based Syncova Essentials will offer hedge funds information across multiple counterparties. This, according to Liam Huxley, vice president of product strategy, will help managers curb costs, in an environment where the barrier to entry is becoming increasingly high.

“Hedge funds typically utilise manual processes to monitor counterparty data, reports and statements from multiple counterparties. This new system will automate all of these processes thereby saving managers on operational overheads at a time when costs appear to be mounting, particularly through regulation and investor demands. Hedge funds over the last three to four years have started multi-priming and the costs have gone up as managers get different reports from different prime brokers,” said Huxley.

The technology, which is marketed to hedge funds of all sizes, will also improve transparency across portfolio charges and counterparty agreements. This should help reduce the risk of overcharging, ensuring accurate attribution of margin and financing charges, and ultimately reducing operational risk.

“Automation helps minimise the errors normally associated with manual processing, and this again can reduce costs for managers. The software enables managers to compare and contrast stock loan rates, margin haircuts and prices between different prime brokers more easily. This again will cut back on costs,” commented Huxley.

The software could also help reduce counterparty risk, an issue which has come back to the fore in light of the wobbly nature of several eurozone banks and the MF Global collapse.

“The systems offer managers operational control and help them apply industry best practice towards monitoring counterparty risk. Ever since Lehman Brothers folded, counterparty credit risk has been a massive issue for managers and their underlying investors. Hedge funds hoping to attract institutional capital need to demonstrate institutional controls. With this new technology in place, it is hoped managers can streamline their operations,” he said.