Northern Trust and youDevise offer daily reporting for funds of hedge funds

Source: Northern Trust

Northern Trust announced that through an exclusive, worldwide partnership with financial applications company youDevise, it will offer funds of hedge funds daily portfolio management data.

Typically, funds of hedge funds ("FoHF") can only get this type of information from their administrators on a monthly basis and without nearly as much detail.

The partnership will see Northern Trust become the first global asset servicer to adopt youDevise's Hedge Information Provider 2.0 (the HIP) - an online portfolio management system developed specifically for FoHFs - as part of its offering for this sector, which includes fund administration, custody and trade execution, fiduciary / trustee, foreign exchange and banking services.

"The combined Northern Trust-HIP solution represents a tremendous step forward in management information systems for the US$1.5 trillion global fund of hedge funds industry," said Wilson Leech, head of Northern Trust's Global Fund Services group. He noted this development comes at a particularly crucial time for the industry as it faces increasing demand from institutional investors for more transparency, governance, and detailed reporting.

The HIP will be fully integrated onto Northern Trust's single, global technology platform so that FoHF clients can obtain daily information about their hedge fund holdings, current value, performance, liquidity, hedging, and a detailed breakdown of assets and transactions. The information will be accessible through Passport, Northern Trust's interactive web portal, which provides clients with secure access to account information and portfolio reports.

"As a result of this integration, funds of hedge funds will no longer have to run shadow accounting and will have online access to data which will have been fully reconciled against, and integrated with, the official month-end NAV(i)," said Peter Cherecwich, head of Global Product and Strategy for Northern Trust's asset servicing business. "This supports Northern Trust's drive to offer comprehensive asset servicing capabilities to the global fund of hedge funds industry."

Richard Koppel, Managing Director of youDevise, added that, "The HIP will enable Northern Trust clients to make decisions faster and more effectively, take better advantage of market opportunities, and demonstrate to their institutional investors the level of control, reporting and transparency that they demand. It will also benefit funds of hedge funds by reducing the risks and inefficiencies associated with multiple data entry."

In addition, the combined Northern Trust-HIP solution will benefit FoHFs by providing:
  • portfolio management: tracking and evaluating investments in underlying funds
  • accounting: monitoring, reconciling and forecasting portfolio cash, payables/receivables, and FX balances
  • liquidity: determining how much cash is redeemable from hedge funds over time and carrying out sensitivity analysis on current and projected cash balances
  • FX hedging: calculating FX exposure and hedging needs and determining gains/losses on existing hedges
  • front office decision support: providing up to date cash, portfolio exposure and performance information to the portfolio manager, to facilitate the decision making process

(i) NAV = net asset value

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