Given its complex nature, the pricing of portfolio positions often involves a great deal of time-consuming work, beginning with data collection to rules application and pricing tests. Even in normal market environments, this process is no easy task. As we have now entered an entirely new dynamic, pricing teams are under an immense amount of pressure to accurately value their securities. Many of the funds have seen significant increase in trading volume and this coupled with underlying volatility in the market have created never-seen pricing issues for the valuation teams.
As fund managers continue to shift to remote and digital operating models, putting increased pressure on already strained business continuity plans, they also need to do a system wide check up on the accessibility and efficiency of their core operational infrastructure.
Data management has become one of the key pillars of a fund in an effort to cope with the rise in amount and volume of unique data sources. While the new world of limitless data opens the door for new opportunities, many firms are deeply concerned about its impact on regulatory and reporting obligations. In order to ensure compliance with regulators, the consistency and accuracy of a fund’s data is paramount. And, while a fund might have implemented a variety of systems over the past few years to increase efficiency and access to reliable information, many managers are realizing that they are facing a whole new set of challenges in the year to come.
Although the industry has largely moved towards automation in recent years with the introduction of new tools and technology, several hedge funds and private equity firms are still grappling with the nuisances of manually managing their expense allocation process. While a few managers have made great strides by achieving partial automation of this process through reference data integration and invoice coding, many still rely on complex spreadsheets that are both tedious and error-prone.