Hedge fund news has not been this good in quite a while for North America-focused vehicles. Although October saw these funds incur a loss of 0.69 percent, returns were at 2.89 percent in November, improving year-to-date returns to 9.09 percent. As such, North America funds are still outperforming all other regions so far.
Stats have been encouraging across the board
Speaking in general terms, November was a very good month for the hedge fund industry. Based on the latest readings from the Preqin All-Strategies Hedge Fund benchmark, gains were at 1 percent in November, boosting YTD totals to 6.34 percent. Event-driven strategies did especially well, with gains of 2.34 percent, as all other top-level strategies enjoyed positive returns in November. YTD performance for event-driven funds is at 10.74 percent as of the end of November 2016, and even relative value funds, which have the lowest performance thus far, are doing solidly, with YTD returns of 4.08 percent.
Election results drove hedge fund strength in North America
One reason why the hedge fund news was so good, according to reports, was the outcome of the 2016 U.S. presidential elections. This was theorized in a statement from Preqin’s head of hedge fund products, Amy Bensted.
“Hedge funds focused on North America generated healthy performance in November and exceeded all other regions, as firms capitalized on opportunities arising from the US election result,” said Bensted. She added that most hedge fund managers surveyed in November 2016 expect the good news to continue over the last few weeks of 2016, and while European and Asian funds have only experienced “marginal” gains, all regions were solid or better year-to-date.
Things are looking good in 2017, and could get better
Preqin’s Bensted also noted that the hedge fund industry may have more good news to look forward to in 2017, as performance may likely beat 2014 and 2015 levels. But there are other reasons why 2017 may be a good year for the space, and they mainly relate to the companies hedge fund managers deal with for their asset servicing needs.
Given the relatively new premium on transparency and accuracy and the regulations instituted in the aftermath of the economic crisis, more fund managers are outsourcing their back and middle office to third party companies. With these companies making life easier for fund managers, it can be said that 2017 has all the potential in the world to be a better year for hedge fund news.
Monday, January 16, 2017
Tuesday, November 15, 2016
Industry trends pushing fund managers to enlist asset servicing firms
Adapting to the developments in the investment and securities industry is a must, if an asset management company is to survive. And in the past half-decade, keeping up with the changes has been pushing many fund managers to hire asset servicing firms.
Below are the industry trends that are facilitating this phenomenon:
Alternative investments on the rise. Amid the unpredictability of today’s investment climate, more client-investors are looking beyond the traditional options and exploring alternative products such as hedge funds. Industry pundits even predict that soon, we may not have to use ther term “alternative” any longer. Moreover, passive investments such as retirement plans that generally come with less opportunity for massive returns are also drawing attention, especially among those who have a lower risk appetite and prefer to pay lower fund management fees.
Transparency takes the spotlight. Across the country and the globe, a host of new regulations are emerging, while the implementation of the past policies are being strengthened. Regulatory bodies in the industry and in the government have deployed more forces as well as more advanced technologies and procedures to monitor noncompliance. These protocols especially highlight the importance of accountability and transparency, and observing these have since become top priority for many asset managers. In the face of this development, firms are required to undertake massive improvements in the way they handle their fund management processes and overall corporate governance.
Growing investor base. New client investors will be pouring in more capital to the industry. In fact, according to PricewaterhouseCoopers, the total amount of assets under management is expected to rise to $102 trillion – a truly sharp growth from being a $64 trillion-industry in 2012. Paving the way to this development is the rise of more mass affluent investors and high net worth individuals in North America, as well as the emergence of new markets in the growing economies of Asia, Africa, the Middle East, and South America. This development means an even more competitive industry, with fund managers fighting for their share of the pie, and also struggling to develop and manage new product offerings to their potential client-investors.
The support of asset servicing firms comes in handy in this context, as they offer the needed technology, platform, and manpower – the entire infrastructure – to take on the middle and back-office operations, from accounting, to tax reporting, to compliance management. This way, the portfolio managers can focus on such core functions as client relations and making strategic investment decisions.
Below are the industry trends that are facilitating this phenomenon:
Alternative investments on the rise. Amid the unpredictability of today’s investment climate, more client-investors are looking beyond the traditional options and exploring alternative products such as hedge funds. Industry pundits even predict that soon, we may not have to use ther term “alternative” any longer. Moreover, passive investments such as retirement plans that generally come with less opportunity for massive returns are also drawing attention, especially among those who have a lower risk appetite and prefer to pay lower fund management fees.
Transparency takes the spotlight. Across the country and the globe, a host of new regulations are emerging, while the implementation of the past policies are being strengthened. Regulatory bodies in the industry and in the government have deployed more forces as well as more advanced technologies and procedures to monitor noncompliance. These protocols especially highlight the importance of accountability and transparency, and observing these have since become top priority for many asset managers. In the face of this development, firms are required to undertake massive improvements in the way they handle their fund management processes and overall corporate governance.
Growing investor base. New client investors will be pouring in more capital to the industry. In fact, according to PricewaterhouseCoopers, the total amount of assets under management is expected to rise to $102 trillion – a truly sharp growth from being a $64 trillion-industry in 2012. Paving the way to this development is the rise of more mass affluent investors and high net worth individuals in North America, as well as the emergence of new markets in the growing economies of Asia, Africa, the Middle East, and South America. This development means an even more competitive industry, with fund managers fighting for their share of the pie, and also struggling to develop and manage new product offerings to their potential client-investors.
The support of asset servicing firms comes in handy in this context, as they offer the needed technology, platform, and manpower – the entire infrastructure – to take on the middle and back-office operations, from accounting, to tax reporting, to compliance management. This way, the portfolio managers can focus on such core functions as client relations and making strategic investment decisions.
Monday, August 29, 2016
Back office solutions: a must for every asset manager
There are three general components to most firms offering financial services, namely the front office, the middle office, and the back office. But why is the back office so important, especially in this day and age, and why are back office solutions often considered mandatory tools in the fund management space?
The back office plays a key maintenance role
Generally, the back office takes care of administrative duties, and does the number-crunching in accounting. There are some companies that integrate middle office tasks into the back office – these include, but are not limited to the processing and clearing of transactions. It depends from firm to firm, but the commonality therein is that the back office handles a lot of company maintenance-related tasks. And it is the back office that often serves as the proverbial straw stirring the drink, an often-overlooked, yet integral reason behind a company’s solvency, or lack thereof.
A good back office is cost-effective and minimizes costly errors
One reason why fund managers turn to back office solution providers is to save money, while minimizing the possibility of costly human errors. Hedge funds and other related companies deal with millions worth of money in their transactions, and a simple error could lead to a myriad of others, with money flowing down the drain as a result of these mistakes. And it can often be quite an expensive proposition to run one’s back office in-house.
Small- and mid-sized companies can benefit most from back office outsourcing
Although any company, regardless of size, can benefit from outsourcing their back office work to a third-party asset services firm, it is the smaller to mid-sized companies that have the most to gain. This eliminates the need to shoulder exorbitant fixed costs for various back office tasks, and allows them to make more inroads in a financial space that keeps getting more and more competitive.
To gain the most benefit from back office solutions, it is important to select one of the top third-party firms. They must have solid experience in the fund administration industry, and a great combination of skilled personnel and top-of-the-line proprietary solutions that hedge funds can leverage to their advantage. Many companies, including a good number of small and mid-sized ones, have reduced human error, saved money, achieved operational synergy, and caught up with their larger competition, thanks to top-tier products and platforms provided by the best asset servicing firms.
The back office plays a key maintenance role
Generally, the back office takes care of administrative duties, and does the number-crunching in accounting. There are some companies that integrate middle office tasks into the back office – these include, but are not limited to the processing and clearing of transactions. It depends from firm to firm, but the commonality therein is that the back office handles a lot of company maintenance-related tasks. And it is the back office that often serves as the proverbial straw stirring the drink, an often-overlooked, yet integral reason behind a company’s solvency, or lack thereof.
A good back office is cost-effective and minimizes costly errors
One reason why fund managers turn to back office solution providers is to save money, while minimizing the possibility of costly human errors. Hedge funds and other related companies deal with millions worth of money in their transactions, and a simple error could lead to a myriad of others, with money flowing down the drain as a result of these mistakes. And it can often be quite an expensive proposition to run one’s back office in-house.
Small- and mid-sized companies can benefit most from back office outsourcing
Although any company, regardless of size, can benefit from outsourcing their back office work to a third-party asset services firm, it is the smaller to mid-sized companies that have the most to gain. This eliminates the need to shoulder exorbitant fixed costs for various back office tasks, and allows them to make more inroads in a financial space that keeps getting more and more competitive.
To gain the most benefit from back office solutions, it is important to select one of the top third-party firms. They must have solid experience in the fund administration industry, and a great combination of skilled personnel and top-of-the-line proprietary solutions that hedge funds can leverage to their advantage. Many companies, including a good number of small and mid-sized ones, have reduced human error, saved money, achieved operational synergy, and caught up with their larger competition, thanks to top-tier products and platforms provided by the best asset servicing firms.
Tuesday, August 23, 2016
A Conundrum: The Telehealth Solution and Government’s Policy Support
Policy makers are major change-makers when it comes to the application of telehealth. Being a budding technology and practice, a significant hurdle currently faced by telehealth programs is the lack of standardized policies regarding telehealth.
As each state’s medical board defines the standard of care that physicians must provide to patients, these state medical boards have the power to decide whether physicians can provide telehealth services and the conditions under which they can provide it. Without proper guidance from the board, physicians become widely exposed to incurring risk, which leads to their reluctance to provide telehealth services.
In some states, physicians are required to establish physician-patient relationship through in-person encounters only, at least for the first of their patient-physician visits. This is based on the presumed difference in quality of care provided from the virtual encounter compared to an in-person one. These kinds of policies impede the adoption of telehealth. Patients are not allowed to consult with doctors they only met virtually. This limits the capability of physicians to provide healthcare services to remote locations and largely negates the purpose with which telehealth is developed.
Meanwhile, other states have crafted policies that affirmatively allow providers to establish a physician-patient relationship using telehealth. States such as West Virginia, Louisiana, Mississippi, and Texas, have provided provisions for the applications of telehealth albeit using different standards for practice within each of these states.
But this is not an isolated case: all states set their own laws and regulations; there are no national standards for telehealth. This lack of uniformity creates a serious legal obstacle for physicians who wish to practice medicine in multiple states.
States do not even have a consistent definition of what is considered as telehealth. For example, some states may require telehealth to involve real-time communication whereas others allow asynchronous messaging between patients and providers. Or one state may consider telehealth to include phone-based interactions while another requires interactive video.
These definitions may not even be internally consistent, as some states may have one definition for the general population and another set of rules for their Medicaid program. This complexity means that telehealth providers must research and adhere to different rules depending on where their patients are located and who is their insurer. Creating a consistent definition for telehealth among all states is a necessary step towards unlocking telehealth services that can be scaled nationally.
Castro, Miller, and Nager in a report for the Information Technology and Innovation Foundation entitled “Unlocking the Potential of Physician-to-Patient Telehealth Services” (May 2014) wrote:
Clearly, there is a lack of consistency between states’ finding policies for telehealthcare delivery, and absence of a straightforward, uniform policy for funding may pose a significant obstacle to this technology’s adoption.
Telehealth is a welcome development amid a chronic disease crisis in our country, where the continuous rise of the population affected with chronic illnesses is aggravating the already dire situation and causing the cost of health care services to skyrocket.
Sadly, the health industry in its current structure is leading us down an unsustainable path. If not addressed properly, the average American will lose the ability to access health care. This loss will result in even greater social and economic costs – from further stress on the health care sector, to diminished workers’ productivity, to the overall deterioration of all Americans’ quality of life.
With the rise of telehealth, we are seeing an opportunity to save the healthcare industry. Through the use of technologies available to the average American, health care services particularly for chronic illnesses could become less costly and of higher quality. Indeed, patterns across states show that telehealth has not only improved health care delivery but the way our society approaches health.
To encourage widespread adoption of telehealth, the following critical factors must be considered or addressed. Leading these factors is the lack of proper network infrastructures to address the demand for telehealth technologies. Without the proper infrastructure, no telehealth program will completely succeed. Stakeholders have recognized this and are taking steps to address it. Another consideration is financing sources for sustainable growth. Like other technologies, telehealth needs financing in order to continuously innovate. Several financing options, both public and private, are present.
Training of both practitioners and patients as well as capacity-building is also necessary. It is a big help that the technologies used in telehealth are mostly commercially available and are now deeply ingrained in the lives of people (i.e.., Internet, mobile communications, television, etc.). This familiarity with many everyday telecommunications tools used by all strata of society by people who have attained many different levels of education may auger in an easy transition for many people to use telehealth technologies for their healthcare needs.
Finally, policymakers must also do their share in order to encourage the use of telehealth. This move includes promoting a more standardized approach to telehealth programs, developing state policies that advance rather than impede telehealth applications, and deciding on ways to make healthcare reimbursement and coverage applicable to telehealth services.
There is a lot of work to do before we can fully reap the benefits of telehealth. But with the proper steps taken by all stakeholders, a society with improved access to quality health care through telehealthcare is a vision we can all look forward to and work on together to realize its development.
New opportunities are emerging for companies to provide industry solutions as a result of The Obamacare Health Care Act (ACA). Some of these companies are:
HExL
Richard A. Kimball, Jr. is CEO and Founder of HExL, a company that enables independent primary physicians to transform their practices financially and clinically to drive better health outcomes, lower costs and improve accessibility. We offer a turnkey technology enabled service enabling primary care physicians to enter into value based reimbursement programs and to be paid for keeping patients healthy.
Evolent Health
Frank Williams is CEO and Co-Founder of Evolent. This company provides the integrated technology, tools and team to advance value-based care. Our work begins with the Blueprint, an immediately actionable strategic roadmap that defines target markets, assesses needed clinical and operational capabilities, and is supported by a detailed business case.
Health Care Partners
Kent Thiry is CEO of Health Care Partners, a company that has been committed to developing innovative models of healthcare delivery that improve our patients' quality of life while containing healthcare costs. Our strength is in our steadfast commitment to our guiding principle of coordinated care. Our physicians strive daily to bring the benefits of coordinated care to more than 600,000 managed care patients in California, who represent the diversity of cultures, socioeconomic groups, ages, and health statuses in the communities we serve.
As each state’s medical board defines the standard of care that physicians must provide to patients, these state medical boards have the power to decide whether physicians can provide telehealth services and the conditions under which they can provide it. Without proper guidance from the board, physicians become widely exposed to incurring risk, which leads to their reluctance to provide telehealth services.
In some states, physicians are required to establish physician-patient relationship through in-person encounters only, at least for the first of their patient-physician visits. This is based on the presumed difference in quality of care provided from the virtual encounter compared to an in-person one. These kinds of policies impede the adoption of telehealth. Patients are not allowed to consult with doctors they only met virtually. This limits the capability of physicians to provide healthcare services to remote locations and largely negates the purpose with which telehealth is developed.
Meanwhile, other states have crafted policies that affirmatively allow providers to establish a physician-patient relationship using telehealth. States such as West Virginia, Louisiana, Mississippi, and Texas, have provided provisions for the applications of telehealth albeit using different standards for practice within each of these states.
But this is not an isolated case: all states set their own laws and regulations; there are no national standards for telehealth. This lack of uniformity creates a serious legal obstacle for physicians who wish to practice medicine in multiple states.
States do not even have a consistent definition of what is considered as telehealth. For example, some states may require telehealth to involve real-time communication whereas others allow asynchronous messaging between patients and providers. Or one state may consider telehealth to include phone-based interactions while another requires interactive video.
These definitions may not even be internally consistent, as some states may have one definition for the general population and another set of rules for their Medicaid program. This complexity means that telehealth providers must research and adhere to different rules depending on where their patients are located and who is their insurer. Creating a consistent definition for telehealth among all states is a necessary step towards unlocking telehealth services that can be scaled nationally.
Castro, Miller, and Nager in a report for the Information Technology and Innovation Foundation entitled “Unlocking the Potential of Physician-to-Patient Telehealth Services” (May 2014) wrote:
Another major barrier to the widespread adoption of telehealth has been lack of consistent reimbursement policies for telehealth services. Reimbursement policies vary from state to state. Each state determines whether its Medicaid program will reimburse for particular telehealth services and under what conditions. For example, some states only reimburse for telehealth services in certain geographic regions, such as rural or underserved areas within the state. Others restrict patients from obtaining telehealth services in their home, instead requiring them to be at a clinic. Overall, every state’s Medicaid program except Iowa, Massachusetts, New Hampshire, New Jersey, and Rhode Island reimburses at least some telehealth services, such as live video encounters. However, only seven states (Alaska, Arkansas, Hawaii, Illinois, Minnesota, New Mexico, and Vermont) allow Medicaid reimbursements for “store-and-forward” services such as tele-dermatology, which happen asynchronously. Only ten states (Alabama, Alaska, Colorado, Kansas, Louisiana, Minnesota, New York, Texas, Utah, and Washington) offer Medicaid reimbursement for remote patient monitoring in the home. States also can determine whether private insurers will reimburse for telehealth services. Twenty-one states have passed laws requiring private insurers to cover some form of telehealth. For example, Montana and Virginia require insurers to cover telehealth services and reimburse at the same rate they would for in-person services. Other states, like Georgia, New Mexico, and Texas only require coverage, but do not require that the reimbursement rate be equal to in-person services. Reimbursement policies have an impact on telehealth adoption: hospitals are more likely to adopt telehealth if they are in states requiring private payers to reimburse telehealth services at the same rate as in-person services.
Clearly, there is a lack of consistency between states’ finding policies for telehealthcare delivery, and absence of a straightforward, uniform policy for funding may pose a significant obstacle to this technology’s adoption.
Telehealth is a welcome development amid a chronic disease crisis in our country, where the continuous rise of the population affected with chronic illnesses is aggravating the already dire situation and causing the cost of health care services to skyrocket.
Sadly, the health industry in its current structure is leading us down an unsustainable path. If not addressed properly, the average American will lose the ability to access health care. This loss will result in even greater social and economic costs – from further stress on the health care sector, to diminished workers’ productivity, to the overall deterioration of all Americans’ quality of life.
With the rise of telehealth, we are seeing an opportunity to save the healthcare industry. Through the use of technologies available to the average American, health care services particularly for chronic illnesses could become less costly and of higher quality. Indeed, patterns across states show that telehealth has not only improved health care delivery but the way our society approaches health.
To encourage widespread adoption of telehealth, the following critical factors must be considered or addressed. Leading these factors is the lack of proper network infrastructures to address the demand for telehealth technologies. Without the proper infrastructure, no telehealth program will completely succeed. Stakeholders have recognized this and are taking steps to address it. Another consideration is financing sources for sustainable growth. Like other technologies, telehealth needs financing in order to continuously innovate. Several financing options, both public and private, are present.
Training of both practitioners and patients as well as capacity-building is also necessary. It is a big help that the technologies used in telehealth are mostly commercially available and are now deeply ingrained in the lives of people (i.e.., Internet, mobile communications, television, etc.). This familiarity with many everyday telecommunications tools used by all strata of society by people who have attained many different levels of education may auger in an easy transition for many people to use telehealth technologies for their healthcare needs.
Finally, policymakers must also do their share in order to encourage the use of telehealth. This move includes promoting a more standardized approach to telehealth programs, developing state policies that advance rather than impede telehealth applications, and deciding on ways to make healthcare reimbursement and coverage applicable to telehealth services.
There is a lot of work to do before we can fully reap the benefits of telehealth. But with the proper steps taken by all stakeholders, a society with improved access to quality health care through telehealthcare is a vision we can all look forward to and work on together to realize its development.
New opportunities are emerging for companies to provide industry solutions as a result of The Obamacare Health Care Act (ACA). Some of these companies are:
HExL
Richard A. Kimball, Jr. is CEO and Founder of HExL, a company that enables independent primary physicians to transform their practices financially and clinically to drive better health outcomes, lower costs and improve accessibility. We offer a turnkey technology enabled service enabling primary care physicians to enter into value based reimbursement programs and to be paid for keeping patients healthy.
Evolent Health
Frank Williams is CEO and Co-Founder of Evolent. This company provides the integrated technology, tools and team to advance value-based care. Our work begins with the Blueprint, an immediately actionable strategic roadmap that defines target markets, assesses needed clinical and operational capabilities, and is supported by a detailed business case.
Health Care Partners
Kent Thiry is CEO of Health Care Partners, a company that has been committed to developing innovative models of healthcare delivery that improve our patients' quality of life while containing healthcare costs. Our strength is in our steadfast commitment to our guiding principle of coordinated care. Our physicians strive daily to bring the benefits of coordinated care to more than 600,000 managed care patients in California, who represent the diversity of cultures, socioeconomic groups, ages, and health statuses in the communities we serve.
Monday, May 30, 2016
Family Offices: Helping families manage their wealth across generations
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.
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.
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