Hedge Fund Advisers Get Help on Disclosures
November 23, 2011
Fund administrator Kaufman Rossin Fund Services says it will help hedge fund advisers meet their regulatory requirements to disclose more information on their operations.
As part of their requirement to register with federal regulators, hedge fund advisers must disclose through a document called Form PF details about their operations and operating risks. The SEC will share that information with the Financial Stability Oversight Board which will monitor overall financial system risks.
Advisors to hedge funds with under $1 billion in assets can file a condensed version of Form PF annually while larger advisers must complete a detailed version quarterly. In both cases, the SEC wants to know the value of assets under management, the amount of debt being used, counterparty credit exposure and performance.
As is often the case with new regulations, hedge fund administrators are naturally eager to step up to the plate with new reporting services. Administrators estimate that large hedge funds must complete at least 500 unique data points and administrators could easily do the work because they have most of that information on hand from their general ledger, risk and pricing engines. Managers of hedge funds or the fund company itself may have to provide additional information on personnel, investment strategy, investor concentration and beneficial ownership, and liquidity provisions including redemption notice requirements.
“KRFS has invested substantial time and resources in understanding Form PF and building the necessary tools,” said Jorge de Cardenas. co-founder and director of Kaufman Rossin Fund Services in Miami. “One significant advantage for KRFS and its clients is KRFS LIVE, a proprietary system which integrates our primary accounting applications: Advent Geneva, Advent Partner and Private Equity Office.
The new system will collect the data from KRFS’ accounting systems and generate the report for its clients – hedge fund advisers – to send the SEC. In complying with the reporting requirement, the KPRS platform will also classify the securities held by a fund into one of three categories for the purpose of valuing those assets under U.S. accounting regulations known as “fair value accounting.”
Founded in 1994 as a spin-off from accounting firm Kaufman Rossin, KFRS now has about $18 billion in assets under administration and services mainly U.S. and Cayman Island domiciled funds.
