Money Management on the Margins

timemoney“Time is money- and neither should be wasted.”  – Benjamin Franklin

He’s got a point. So how can Buy Side firms make the best use of their time?  For starters, avoid leaving the increasingly important task of margin management to a single employee and an Excel spreadsheet given that compliance requirements are higher than ever and risk management is under the microscope.

At the HedgeOps New York event last month I had the privilege of participating in the “Money Management on the Margins” session. My co-panelists and I discussed the difficulties facing hedge fund managers today. We varied in both the types of firms we work at and job titles we hold, but the one thing we all had in common is we agreed this was an important topic and something the industry should recognize—hence the blog post after the event!

Here’s the rundown of what we discussed -

Issues facing Hedge Funds today:

  1. Increased collateral management roadblocks – Like all financial services firms, hedge funds are facing increasing collateral management and margining challenges such as managing the costs associated with margin, stock borrowing, and financing.
  2. Risk of human error – What’s typically been the task of one or a few employees can exhaust resources and compromise accuracy through countless hours of compiling data and reconciling charges using a tedious spreadsheet. The risk of human error has shifted the issue of margin management into sharp focus with recognition that more effective tools are needed to automate the process and  enable the more efficient use of margin, instead of managing the old fashioned way – that’s  if it was done at all!
  3. Collateral Optimization – Despite the industry buzz surrounding optimization, most buy side firms today are still posting cash. However, we panelists felt that over the next year firms will begin to look closer at their treasury stack and what securities they hold in their inventory versus what they can post to different counterparties.

In summary, the consensus shared is when transparency into margin and fee calculations is clouded; firms may not even realize how much incremental profitability could be slipping through their fingers. With operations teams already overloaded the answer is not more spreadsheets or bodies but finding technology to do the leg work, leaving you to impress your CFO and investors with the bottom line savings.

Nick is responsible for working with new clients for Advent’s Syncova and Geneva products. Prior to that he worked on client implementations.

Posted in Advent Software, Hedge Funds, Risk, Trends

A Bit of Caution with Bitcoin


Don’t let your clients be allured by cutting edge technology innovations involving money- it could come at a high cost.

The increasing use of virtual currencies is becoming a cause for concern as fraudsters have been known to use them in perpetrating investment schemes. Bitcoin is one example of a decentralized peer-to-peer payment system in which users can exchange money—either for traditional currencies (like the U.S. dollar) or to purchase items and services online—without using a bank or middle man.

Sounds great, right?  Well, maybe not when virtual currencies are said to have greater privacy benefits and less regulatory oversight; so investors could be in for more than they thought.

Earlier last month the U.S. Securities and Exchange Commission issued an Investor Alert on virtual currency. The alert urges investors to be wary of Bitcoin-related opportunities:

  • There is no such thing as a “guaranteed” high investment return. Investors shouldn’t be enticed by anyone that promises a high rate of return with little or no risk, and should take caution with unsolicited offers as they could be a part of a fraudulent investment scheme.
  • Investors should be suspicious of investment opportunities that don’t ask about their net worth or income, and should only deal with licensed sellers. Many fraudulent deals involve unlicensed individuals or unregistered firms.
  • If there’s a pressure to buy right away, it could be a fraudster creating a false sense of urgency to get in on the investment.

So if you find your clients inquiring about Bitcoin, point them to the SEC’s Investor Alert on to learn more about avoiding investment fraud.

Since joining Advent earlier this year, Kendall has leveraged her passion for writing along with her background working with enterprise cloud technologies to strengthen Advent’s external communications.

Posted in Risk, Trends

In the Land Down Under

Earlier this year, we held our first AdventConnect events in Australia – the first of what we hope to be many. It was a chance for people in the investment industry to get to know Advent a little better, and for our management team to get a closer look at a market where we have a small but growing presence.

In Sydney, we hosted a reception at the Establishment Hotel (you’ll find it listed, appropriately, on the “Hip Hotels” website). Savanth Sebastian, an equities economist at Commonwealth Bank, gave a terrific presentation on the state of the Australian economy. I was really struck by the parallels he drew between Australia’s housing market today and that of the US in 2007, when the bubble burst. Housing price growth hit an 18-year high this year and is widely viewed as unsustainable, but Savanth thinks a growing supply of new homes will cool things down.

Nikki Bentley, a partner in the law firm Henry Davis York, spoke from firsthand experience about the challenges fund managers face navigating the local regulatory climate. She talked about the new Investment Manger Regime (IMR3) and the impact it is likely to have on traditional hedge funds, specifically that they may lose their beneficial tax treatment if their current ownership structures don’t meet the new requirements. Hedge fund reform appears to be as big an issue in Australia as it is in the EU and the US.

The topic that sparked a lot of lively interaction was the cloud and the future of financial services. Industry experts from Eze Software, MSCI, and Matsco Solutions joined us for a panel discussion and fielded a wide range of questions. There is quite a bit of interest in cloud computing in Australia, in part because there aren’t enough skilled IT professionals to fill the demand within financial firms. The consensus was pretty clear that the cloud will likely be widely adopted sooner rather than later.

Two nights later we held a more intimate dinner at the Taxi Kitchen overlooking Melbourne’s Yarra River. Though the format was less structured, the conversation was no less engaging.

I’m looking forward to more interaction with our Australian clients, colleagues, and prospects. This was my first visit to the country, and based on the welcome we received, I’m confident it won’t be my last.

Anthony is chartered with making sure our customer base of well over 4,000 clients get the full value of their relationship with Advent through superior service and support. His teams are responsible for implementation, product adoption, training, support, ongoing account management, and renewal sales.

Posted in Advent Software, AdventConnect, Trends

Is thinking about an IBOR keeping you up at night?


While the term IBOR has a relatively short history, the concept of an investment book of record (IBOR) has been around for quite some time. Historically all sorts of solutions, manual and otherwise, have been designed to give investment managers real-time visibility to improve decision-making.

The term “real-time” is arguably a main driver behind why an IBOR is so essential. Aggregating position data in a timely fashion has often been hindered by the need to pull data from multiple, separate platforms. Enter the IBOR – the reason this labor doesn’t have to be a manually grueling, time-consuming task. The IBOR automatically centralizes a firm’s holdings data, processes trades, and spits out updated reports in real time.

It’s a single version of truth, the gospel, the manifesto. Whatever way you want to think about it, an IBOR is a holistic view of your day.

Martin Engdal recently showed his IBOR chops in a Waters Technology Special Report. Our Director of Market Strategies and Solutions Marketing had some vital points to share in this Q&A . I encourage you to check it out if you’ve been debating the business advantages offered by an IBOR platform.

Since joining Advent earlier this year, Kendall has leveraged her passion for writing along with her background working with enterprise cloud technologies to strengthen Advent’s external communications.

Posted in Trading, Trends

Great Community Ideas = Great Products

ideasWe made a commitment when we launched Advent Direct Community: great member ideas would be worked into future product releases.  I’m happy to report that we’ve now started to fulfill our promise.

The April releases of Advent Portfolio Exchange (APX) and Moxy are our first Advent Direct Community-sourced releases.

The ability to automatically sync cost basis with custodians was the #1 most “kudo’d” suggestion from APX clients and we’ve taken this idea and turned it into a new product feature!

Same with Moxy and Advent Rules Manager – we’ve delivered a number of usability enhancements based on feedback from Advent Direct Community discussions, like additional templates for the Rule Guide.

While our conversations with clients have always been key to our product enhancements over the past 30-plus years, this time the ideas were provided directly on Community and developed in an incredibly transparent fashion.

That’s not all we’ve been up to. In the last month, we’ve also released new versions of Geneva, Geneva World Investor, Advent Revenue Center, Advent Rules Manager, Tradex, Syncova, and Tamale RMS. We also rolled out additional capability in our data services platform. And we’ve delivered some great new features.

  • As our clients diversify their lines of business, we are making improvements so Geneva will be a  leading platform supporting firms with any investment, in any structure, in any region.
  • APX delivered a multi-lingual reporting framework to make it easier than ever to serve clients around the world. Our clients need the ability to respond to one of the great market drivers, the continued globalization of wealth.
  • In Moxy, we expanded our partnership with FactSet so that users can leverage their real-time data throughout the system. We are incorporating the best of what the market has to offer – in this case third-party data – to bring more value to our clients.

I can’t stress enough how much we value feedback from our clients.  As long as it keeps coming, we’ll keep listening and, more importantly, acting. This brings me to my last point. This year we also launched the product idea forum for Geneva, and we are currently reviewing all of your ideas as we prepare for the next set of releases.

Check out our “What’s New” page in the Advent Direct Community to see all the latest product enhancements, or learn more about how you can interact on Community here.

Robert joined Advent in 2001 and now leads the US product management and solutions consulting groups, responsible for designing solutions on and around Advent’s award-winning portfolio accounting platforms and ensuring that Advents solutions continue to keep pace with the rapid change in the market.

Posted in Advent Direct Community, Advent Software

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