Advances in technology are allowing Fund of Funds to process data faster

Today’s investors expect a lot of their fund managers: they want up-to-date reports on demand and want to be able to use technology to analyze data so they can evaluate performance based on evolving metrics. Transparency has become critical in both investor relations and compliance reporting. Private equity firms adopting technology solutions have a leg up on the competition.

However, one area of the industry that has lagged behind is Fund of Funds. These firms have been late in adopting technological solutions because of the amount of information they have to integrate and the variety of formats in which it comes. With different funds providing data in different ways, including spreadsheets and physical documents, the thinking has been that the only way to avoid costly errors is through manual data entry. The intricacies of calculating elements like acquired fund fees and expenses (AFFE), which have to be listed under the fee schedule, mean mistakes can be hard to isolate and fix.

But relying on manual processes has led to bloated staffs and latency in reporting due to the complexity of investments and sheer amount of data that must be processed. This requires time and money that investors aren’t happy to see the fund spending, especially when they don’t have access to the most current information about the fund’s performance.

In order for Fund of Funds to be an attractive investment in the modern marketplace, it needs to catch up in terms of reporting times and investor transparency. JTC has developed a solution that ensures security and efficiency, and it involves non-linear data processing.

Our technology uses machine learning to retrieve and aggregate data faster by working with hundreds of documents asynchronously instead of one at a time. As data is acquired and integrated faster, it can be worked with faster to create vital reports and analysis. Now, processes that used to take weeks can be done in a matter of hours. That’s not just a pipe dream: it’s being done right now with a lot of success.

Because the entire process is automated, it’s easier to identify anomalies and use exception-based handling to solve inconsistencies. Instead of hoping an individual will catch a problem, the system can be taught how to identify and deal with certain exceptions, adjusting to take them into account in the future. The result is a system that’s more accurate without being slower.

All of this will reduce cost by limiting the staff needed at peak times, but most importantly, it can strengthen your relationship with your investors. Streamlining the retrieval and aggregation of portfolio information lets you provide reports and statements faster, with dashboard access to all available data to monitor valuation progress along the NAV timeline.

The result? Investors get more accurate data faster than ever before; better decisions can be made with up-to-date information; and requirements like AFFE can be calculated and delivered quickly and accurately.

Fund of Funds presents unique challenges for managers who care about limiting risk and meeting compliance requirements. Those challenges required advanced solutions, and JTC has worked tirelessly to perfect its methods to provide bespoke solutions for Fund of Funds that are proven, accurate, and fast.

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