Taking into account the specialized knowledge and assistance required to manage one’s money intelligently, high-net worth individuals have taken to engaging the services of family offices.
Whether one has inherited wealth or created it, the discerning investor ultimately wishes protect and nurture it in order to benefit his family over the long term. This is easier said than done, however, considering that a single bad investment or clan dispute can be all it takes to tank a fortune that took years – perhaps even generations – to build.
Rising demand
Family offices – which could be part of a traditional bank or a more boutique outfit – are wealth management firms that tend to the financial needs and goals of an affluent individual or family. Their benefits are as elite as the clientele: in additional to the traditional investment advising, estate planning, tax accounting, and consulting on various financial moves, they also offer white-glove perks such as the handling of art and other collections, tracing medical and genealogical history to help the clients better understand their heritage, and teaching the younger generations the value of money and how to use it well in the future.
While family offices have been around since the 19th century, demand for them has increased over the years, especially for their financial planning and asset coordination functions, culminating in the 2008 financial crisis. With this background, managers in these offices work to help a family navigate the current economic landscape so that they can achieve their financial objectives.
Optimizing operations
Given the array of services to be delivered and the bespoke needs of its clients, managers overseeing a particular family’s portfolio need to remain abreast of the latest wealth management trends and optimize their operations so as to remain efficient at their core task: growing their wealth.
Asset servicing companies can help free up managers to focus on strategy and decision-making on behalf of their clients by providing them with fund administration support.
Their middle and back office solutions include daily cash, position, and trade reconciliation across all counterparties, portfolio level analytics including performance attribution and risk metrics as well as comprehensive financial reporting, accounting, compliance, and tax services. Cloud-based reporting platforms also allow managers to access their data from any browser, aiding them in their analysis.
With the help of asset servicing companies that streamline back end operations, managers in family offices can focus on what they do best – providing a family with the best financial advice for its future.
Monday, May 30, 2016
Sunday, April 3, 2016
The value of outsourcing fund administration
Among hedge funds, private equity companies, and many other players in the securities industry, outsourcing fund administration has become ever more commonplace. Fund administration covers financial reporting, accounting, daily, weekly, and monthly computation of NAV or Net Asset Value, and fund portfolio valuation, among other roles.
This article discusses the value of following this growing trend.
Through fund administrators, asset managers can access scalable solutions. The world of fund management is a complex one, and challenges here need to be met with the solution that responds to their nature. Asset managers need to display a commitment to keep tabs on –and adapt to – the developments in the market. This, in turn, calls for scalable solutions that will provide just the right kind of support based on the manager’s assessment of such factors as the investment risks, the yield rate, and the opportunities for growth. Fund administrators can provide this, because they have the time and resources to develop customized tools for the asset management firms that they serve.
Fund administrators can take on the red tape and compliance duties. Dealing in fund management entails facing bureaucracy at different levels. This can refer to negotiating with industry regulators, preparing the many reports that must be submitted on a regular basis, and ensuring that company practices adhere to the pertinent federal laws. Fund administrators can also take care of preparing and filing reports to local regulatory bodies, and monitor fund movements vis a vis anti-money laundering rules.
With their assistance, day-to-day fund management operations become much more efficient. Fund administrators have mastered – and have the tools for – the tedious tasks that come with fund management. For example, they can deftly handle the calculation of the yield and other metrics important to the client, conduct regular valuation and asset verification, price securities based on the present market value, and perform daily reconciliation of statements of the investment manager, the bank, and all involved brokers. On a daily basis, they also oversee the purchase and sale of securities, as well as distribute the dividends arising therefrom.
Truly, in many ways, fund administration services help asset management firms promote efficiency in their operations, and let them be more responsive to the demands of the market. With their assistance in all phases of fund management, managers will see a much higher level of quality of operations, one that greatly benefits from automation, real-time information delivery, and consistency of results.
This article discusses the value of following this growing trend.
Through fund administrators, asset managers can access scalable solutions. The world of fund management is a complex one, and challenges here need to be met with the solution that responds to their nature. Asset managers need to display a commitment to keep tabs on –and adapt to – the developments in the market. This, in turn, calls for scalable solutions that will provide just the right kind of support based on the manager’s assessment of such factors as the investment risks, the yield rate, and the opportunities for growth. Fund administrators can provide this, because they have the time and resources to develop customized tools for the asset management firms that they serve.
Fund administrators can take on the red tape and compliance duties. Dealing in fund management entails facing bureaucracy at different levels. This can refer to negotiating with industry regulators, preparing the many reports that must be submitted on a regular basis, and ensuring that company practices adhere to the pertinent federal laws. Fund administrators can also take care of preparing and filing reports to local regulatory bodies, and monitor fund movements vis a vis anti-money laundering rules.
With their assistance, day-to-day fund management operations become much more efficient. Fund administrators have mastered – and have the tools for – the tedious tasks that come with fund management. For example, they can deftly handle the calculation of the yield and other metrics important to the client, conduct regular valuation and asset verification, price securities based on the present market value, and perform daily reconciliation of statements of the investment manager, the bank, and all involved brokers. On a daily basis, they also oversee the purchase and sale of securities, as well as distribute the dividends arising therefrom.
Truly, in many ways, fund administration services help asset management firms promote efficiency in their operations, and let them be more responsive to the demands of the market. With their assistance in all phases of fund management, managers will see a much higher level of quality of operations, one that greatly benefits from automation, real-time information delivery, and consistency of results.
Monday, February 1, 2016
Middle and Back Office Support Helps Business Development Companies Deal with Risks
In the aftermath of the 2008 financial crisis, banks became the subject of tighter industry regulation, media attention, and public scrutiny, all of which set limitations on their financing opportunities especially for mid-market companies. Rising in their stead are business development companies (BDCs), which are investment vehicles that raise capital particularly to fund small and middle-sized businesses.
But in this endeavor, BDCs face different kinds of risks. Here are three of them:
Leverage risk. To be able to fund businesses, BDCs first raise capital from such sources as corporate bonds, equity offerings, and convertible bonds. These borrowed funds compose majority of their investments, and the goal is for the gains from these investments to exceed the interest that their loans will incur. If the investment does not generate returns, the BDC will have to take losses.
Liquidity risk. BDCs are categorized as publicly traded companies, and are therefore considered liquid. However, the businesses they invest in are private, and are then not liquid. Through strategies like taking the company public through an IPO or facilitating a buyout, BDCs hope to make a profit and be able to settle their debt, distribute cash to their investors, and find more capital to invest. But within their portfolio, BDCs may find it hard to liquidate assets, and the longer the process takes, the more interests they must pay.
Interest rate risk. Finally, as entities that both borrow and lend, the best case scenario for BDCs is to find providers of long-term loans with low fixed rates, and small businesses willing to borrow short-term loans at variable rates. In reality, BDCs are subject to the volatile nature of the interest rates. The risk is that when they borrow to pay off their original loans and acquire more funds to invest, the rates have risen, making the capital now more expensive.
To deal with these risks, business development companies need to invest towards an infrastructure that promotes swift but informed decision-making, superior investor relations, and smooth operations in multiple market cycles.
Central to this infrastructure is a robust middle and back office, consisting of experienced personnel utilizing cutting edge technologies to handle recordkeeping, accounting, treasury, due diligence, and tax reporting cost-efficiently and under exacting standards. With their help, BDCs can easily evaluate and manage the risks that are inherent in their business, and satisfy the investment goals of their investor clients as well as their own.
But in this endeavor, BDCs face different kinds of risks. Here are three of them:
Leverage risk. To be able to fund businesses, BDCs first raise capital from such sources as corporate bonds, equity offerings, and convertible bonds. These borrowed funds compose majority of their investments, and the goal is for the gains from these investments to exceed the interest that their loans will incur. If the investment does not generate returns, the BDC will have to take losses.
Liquidity risk. BDCs are categorized as publicly traded companies, and are therefore considered liquid. However, the businesses they invest in are private, and are then not liquid. Through strategies like taking the company public through an IPO or facilitating a buyout, BDCs hope to make a profit and be able to settle their debt, distribute cash to their investors, and find more capital to invest. But within their portfolio, BDCs may find it hard to liquidate assets, and the longer the process takes, the more interests they must pay.
Interest rate risk. Finally, as entities that both borrow and lend, the best case scenario for BDCs is to find providers of long-term loans with low fixed rates, and small businesses willing to borrow short-term loans at variable rates. In reality, BDCs are subject to the volatile nature of the interest rates. The risk is that when they borrow to pay off their original loans and acquire more funds to invest, the rates have risen, making the capital now more expensive.
To deal with these risks, business development companies need to invest towards an infrastructure that promotes swift but informed decision-making, superior investor relations, and smooth operations in multiple market cycles.
Central to this infrastructure is a robust middle and back office, consisting of experienced personnel utilizing cutting edge technologies to handle recordkeeping, accounting, treasury, due diligence, and tax reporting cost-efficiently and under exacting standards. With their help, BDCs can easily evaluate and manage the risks that are inherent in their business, and satisfy the investment goals of their investor clients as well as their own.
Tuesday, December 1, 2015
3 Less-known Social Media Marketing Trends to Consider
Across all industries in different markets around the globe, social media marketing is seeing a phenomenal rise. Businesses are beginning to dedicate serious funds and manpower for it, and customers are responding positively.
Companies are also generally keen on monitoring trends – for example, that Facebook continues to be the top platform and thus should get the most share of the resources. But behind the popular trends that are guiding important marketing decisions are the less known but equally important patterns. We look at those trends in this article:
Social media drives traffic to the website. In a survey conducted by Social Media Examiner participated in by 3,720 marketers, business owners and solopreneurs from the U.S. and abroad, while social media primarily promotes exposure for the brand, its number two benefit is how it drives traffic to the company website.
This means that while social media is truly an area of growth, companies should also strive for their web portal to keep up, by offering something fresh for all these new visitors that social media will draw. Moreover, they should ensure continuity and consistency in brand messaging, so that both platforms only serve to strengthen the brand, and not confuse the users.
Social media access is also growing on desktops. Everyone is excited about the significant rise of social media consumption via mobile devices such as smartphones and tablets. In response, many businesses took the steps to ensure that their content are mobile-friendly, and that is good practice. But not everybody knows that social media access via desktop is also growing, as revealed in a study of comScore last March 2015.
The research says that adoption of mobile devices did not, in fact, cut the use of social media activity via desktop. Instead, it simply complemented it, by providing access when desktop viewing is not possible, e.g. when on the go, when in bed, or during waiting times. This means that companies can still devote resources towards social media materials meant for desktops, and expect the same level of engagement.
Interest-based networks may be the next big thing. Social media networking is currently largely people-based – one adds people he knows personally. And much of this kind of networking happens on Facebook, and other sites that attempted to operate on the same framework have failed, or are failing. According to HootSuite CEO Ryan Holmes, interest-based groups have a much better chance at growing (and sticking around), despite Facebook.
To learn more about navigating social media marketing, get in touch with digital marketing experts today.
Companies are also generally keen on monitoring trends – for example, that Facebook continues to be the top platform and thus should get the most share of the resources. But behind the popular trends that are guiding important marketing decisions are the less known but equally important patterns. We look at those trends in this article:
Social media drives traffic to the website. In a survey conducted by Social Media Examiner participated in by 3,720 marketers, business owners and solopreneurs from the U.S. and abroad, while social media primarily promotes exposure for the brand, its number two benefit is how it drives traffic to the company website.
This means that while social media is truly an area of growth, companies should also strive for their web portal to keep up, by offering something fresh for all these new visitors that social media will draw. Moreover, they should ensure continuity and consistency in brand messaging, so that both platforms only serve to strengthen the brand, and not confuse the users.
Social media access is also growing on desktops. Everyone is excited about the significant rise of social media consumption via mobile devices such as smartphones and tablets. In response, many businesses took the steps to ensure that their content are mobile-friendly, and that is good practice. But not everybody knows that social media access via desktop is also growing, as revealed in a study of comScore last March 2015.
The research says that adoption of mobile devices did not, in fact, cut the use of social media activity via desktop. Instead, it simply complemented it, by providing access when desktop viewing is not possible, e.g. when on the go, when in bed, or during waiting times. This means that companies can still devote resources towards social media materials meant for desktops, and expect the same level of engagement.
Interest-based networks may be the next big thing. Social media networking is currently largely people-based – one adds people he knows personally. And much of this kind of networking happens on Facebook, and other sites that attempted to operate on the same framework have failed, or are failing. According to HootSuite CEO Ryan Holmes, interest-based groups have a much better chance at growing (and sticking around), despite Facebook.
To learn more about navigating social media marketing, get in touch with digital marketing experts today.
Wednesday, November 25, 2015
Alternative Investments on the Rise
In 2008, the financial sector faced one of its worst crises, which led to the fall of some of the biggest names in the industry. As a result of that crisis, portfolio managers have been constantly on the lookout for ways to mitigate risks and ensure profitability amid the unexpected developments in the world of asset management. Turning to alternative investments has been one such course.
Most fund managers refer to alternative investments as funds whose dynamic run contrary to the movement of traditional investments such as bonds and public equities, and the rest of the market. Thus, it can be said they promote portfolio stability. Among the types of alternative investments are private equity funds, hedge funds, and real estate.
Two years ago, alternative assets accounted for 12% of the industry assets globally. The numbers are expected to rise further: By 2020, experts predict that alternatives’ share will be 15%. Key to this expected growth is a client base that more and more appreciates the strategies being employed by fund managers to address the risks associated with alternative investments.
Furthermore, alternative asset managers are becoming increasingly regulated, and they have been responding well, through the adoption of services and technology that boost transparency and efficiency in operations. With this development, financial advisors and the fund managers themselves will be more confident about presenting alternative investments as a truly profitable venture to the erstwhile hesitant client-investors.
Truly, alternative investments present a lot of opportunities for asset diversification – a popular strategy to minimize risks amid a fast-changing financial landscape. It is a landscape that has been welcoming the entry of new players and heightened interest in new markets across the globe, especially in Asia. This year, for example, a Deutsche Bank survey revealed that 30% of investors are keen on investing in China and over 25%, in India, with the figures representing an increase of about 12% and 21%, respectively.
To find growth in the alternative assets scene, it is important that fund managers leverage middle and back office solutions to aid in fund administration, accounting, reporting, data management, and client relation functions. Having the human resources and the technology infrastructure to provide support in these roles spell the difference between high-performing alternative assets managers from the rest. And as is often the case in the financial sector, good performance only leads to more investors, which lends the opportunity for even greater success.
Most fund managers refer to alternative investments as funds whose dynamic run contrary to the movement of traditional investments such as bonds and public equities, and the rest of the market. Thus, it can be said they promote portfolio stability. Among the types of alternative investments are private equity funds, hedge funds, and real estate.
Two years ago, alternative assets accounted for 12% of the industry assets globally. The numbers are expected to rise further: By 2020, experts predict that alternatives’ share will be 15%. Key to this expected growth is a client base that more and more appreciates the strategies being employed by fund managers to address the risks associated with alternative investments.
Furthermore, alternative asset managers are becoming increasingly regulated, and they have been responding well, through the adoption of services and technology that boost transparency and efficiency in operations. With this development, financial advisors and the fund managers themselves will be more confident about presenting alternative investments as a truly profitable venture to the erstwhile hesitant client-investors.
Truly, alternative investments present a lot of opportunities for asset diversification – a popular strategy to minimize risks amid a fast-changing financial landscape. It is a landscape that has been welcoming the entry of new players and heightened interest in new markets across the globe, especially in Asia. This year, for example, a Deutsche Bank survey revealed that 30% of investors are keen on investing in China and over 25%, in India, with the figures representing an increase of about 12% and 21%, respectively.
To find growth in the alternative assets scene, it is important that fund managers leverage middle and back office solutions to aid in fund administration, accounting, reporting, data management, and client relation functions. Having the human resources and the technology infrastructure to provide support in these roles spell the difference between high-performing alternative assets managers from the rest. And as is often the case in the financial sector, good performance only leads to more investors, which lends the opportunity for even greater success.
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