Two firms with a large number of clients that invest in hedge funds through separately managed accounts (“SMAs”)needed a solution that could help them address the need for drill-through transparency into the constituent investments of these fund holdings. Both firms’ operational platforms were targeted towards fund investments that only required monthly tracking of their subscriptions and commitments. The firms needed to be able to track actual daily holdings changes due to increased regulatory and investor due diligence requirements. The most challenging aspect of this was maintaining and resolving the security-level transparency of these funds.
Portfolio BI implemented the PBI Enterprise Data Management (EDM) and Security Master modules of PBI EDM to provide the clients with a full end-to-end solution.
The system comes with out-of-the-box connectors to most fund administrators and custodians, as well as provides the ability to bring in transparent data quickly. PBI provides enterprise integration management and includes a step to identify new securities across asset types, as well as automatically create them in the system. This feature, along with integration with various market data and risk systems, provides the necessary Security Master reference data needed to enable these firms to run exposure, compliance, and risk reporting in real-time. The resulting outputs are persisted in the easy-to-use Data Warehouse with both “as-of” and “knowledge date” support.
Before implementing PBI EDM and Security Master, both firms could report only at the top-level investment. After the implementation, they can now report on total exposures, providing more robust and thorough reporting. PBI has increased the firm’s operational efficiency and streamlined its firm-wide reporting process, as well as delivering compliance functionality that brings in new investors.