Hedge Funds use Technology to alleviate burdens of Transparency

August 31st, 2009
| More
Contributed by: Natalie Kaminski, FinCode Solutions
In the face of the Hedge Fund Transparency Act, and the increasing demands from investors and prospects to disclose more detailed and frequent information, many hedge funds find themselves spending a great amount of their resources gathering, organizing and sharing information. This is not an easy task, as critical data is commonly stored and processed in many systems and databases that often do not communicate with each other. Further complicating this process has been the adoption of a multi-prime broker strategy by many hedge funds.

One option that may help funds solve the data consolidation issue is building a proprietary data warehouse. Simply put, a data warehouse is a central repository that pulls select data elements from disparate sources and can be used for advanced analytics and reporting purposes. Data warehouses can also be used as a data source for front-office applications, such as customized Investor Websites, which provide secure and hassle-free platforms for sharing performance data with investors, while meeting transparency requirements.

Specialist software development firms are able to build highly secure web-based platforms that offer investors around-the-clock access to their account information including balances, transactions, account performance returns, general fund performance, and communication letters. Furthermore, data can also be easily broken down by fund, asset class, strategy, and other criteria as required by the manager or the investor. Historical performance records can be viewed through an easy-to-use interface, and certain data elements can be downloaded in PDF or Excel formats.

Many fund managers take a further step and use Investor Websites to facilitate a more effective communication with their investors. They use the technology to distribute investor letters, make announcements, solicit feedback, share educational materials, SEC filings and other data to improve the investor relations and follow the industry best practices.

Natalie Kaminski is the Founder and CEO of FinCode Solutions, a boutique software development and consulting firm that focuses on the alternative investment industry. For more information on Ms. Kaminski and FinCode Solutions, please click here.
Related Article Tags: Multi-Strategy, Long Short, Equity, Debt and Global Macro Hedge Fund News; Hedge Fund Resources and Featured Partner News


More Recent Headlines

Paulson becomes biggest investor in AngloGold

SAC Capital and Crestwood Advisors add Industry Veterans

Brevan Howard Opens Mauritius Funds to Invest in India

Oaktree Capital Management’s Howard Marks thinks the best opportunities have passed

Distressed Hedge Fund Spotlight: Tiburon Capital, HG Vora and Archview Investment

Paulson & Co. Buying up Citigroup Shares

Marc Dreier’s fraud victims include Elliot Associates, Fortress Investments, Eton Park Asset Management and Concordia Advisors

Citi's Pandit Should Learn from AIG's Benmosche About Handling Government

Cerberus Capital Struggles with Redemptions

Man Group’s AHL Hedge Fund Struggles