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Industry News
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Tuesday, August 05, 2008
LEADING FUND ADMINISTRATORS FULCRUM GROUP AND BUTTERFIELD FUND SERVICES TO MERGE
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Tuesday, July 08, 2008
Jill M. Considine to Join Fulcrum Group as Chairman of the Board
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Tuesday, April 08, 2008
Fulcrum Group Completes SAS 70 Type II Examination
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Wednesday, February 06, 2008
Fulcrum Leverages Advent Geneva For Growth Strategy
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Friday, September 21, 2007
FULCRUM RANKED 3rd AMONG LOCAL ADMINISTRATORS IN GLOBAL CUSTODIAN 2007 HEDGE FUND ADMINISTRATION SUR
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FAQ
Jump to the sections that you are interested
in.
General
FAQ
Foreign
Exchange (FX) Exposure
Databases vs.
Spreadsheets
Frequently Asked Questions
Offshore Funds Administration
In this section, we attempt to address some
of the more common issues raised by fund managers in respect
of offshore funds and administration:
What is a
master-feeder structure and do I need one?
What should I
look for when I choose a fund administrator?
What are the
differences between the 'average', 'series' and 'equalisation'
performance fee methodologies?
Top
Q : What is a master-feeder
structure and do I need one?
A : An offshore fund's legal structure is often
determined by the tax consequences to its investors. The
choice of structure is more complex, however, where the fund
seeks to attract both US and non-US investors. From a US tax
standpoint , US taxable investors are better off investing
through a limited partnership. Offshore corporations, however,
are better investment vehicles for the large number of non-US
investors who seek to maintain confidentiality. In fact, some
non-US investors refuse pointblank to invest in any fund that
has a significant number of US investors and is therefore
likely to attract the unwanted (and occasionally unwarranted)
attention of the US tax and regulatory authorities.
Wasteful duplication
A solution to the above problem is to create
a separate fund for each group of investors. The fund manager
attempts to replicate his trading performance across the
different funds by splitting every trade according to the
ratio of the relative NAVs. To make life worse, the fund
manager's bargaining position vis-a-vis counter parties is
weakened since he must negotiate separate credit
lines/financing arrangements for several smaller funds.
The Master - Feeder solution
The Master-Feeder solution overcomes these
problems by creating separate investment (i.e. feeder)
vehicles for each investor group. Investors subscribe for
shares or partnership interests in the appropriate feeder fund
which in turn invests these proceeds in a single offshore
trading (i.e. master) vehicle. Trade splitting and portfolio
re-balancing is eliminated while the larger combined balance
sheet helps the fund manager to negotiate bigger credit lines
under more favourable terms. Profits and losses are
apportioned pro-rata to the NAV of each feeder.
The US taxable investor feeder is usually,
though not always, a domestic limited partnership. The non-US
investor feeder (which will often take US tax-exempt investors
seeking to avoid "UBTI" - unrelated business taxable income)
is normally an offshore corporation. The master fund is either
an offshore partnership or an offshore corporation which
elects to "check-the-box" under US tax law. Since the IRS
"looks through" a feeder partnership to assess US taxable
investors on the gains in the underlying master fund, it is
critical that the master fund not be classified as a "PFIC"
(passive foreign investment corporation). The "check-the-box"
election achieves this by allowing the master fund corporation
to be viewed as a partnership for US tax purposes.
It is worth mentioning that some
master-feeder structures completely dispense with the domestic
feeder. In other words, US taxable investors subscribe
directly into the offshore master fund. There is no tax
disadvantage to US investors although some lawyers feel more
comfortable with the extra degree of legal separation afforded
by a domestic feeder. In either case, non-US investors and US
tax-exempt investors continue to subscribe through an offshore
feeder.
Master fund: Partnership or
Corporation?
One advantage of the "check-the-box" election
is that unlike a limited partnership, a corporation does not
require a general partner. Fewer entities reduce legal and
registration costs although "check-the-box" does not eliminate
the need to maintain a share register. Moreover, there are
circumstances when it may be advisable to create more than one
master fund (see below).
Feeder funds as trading entities
A feeder fund may wish, under special
circumstances, to act as a trading entity. Withholding tax on
US equities, for instance, is irrecoverable in certain
offshore jurisdictions. Instead, the fund manager can book his
US equity trades in the domestic feeder and reclaim this tax.
Unfortunately, such gains are not available to non-US
investors who can only participate in master fund
gains/losses. A less clear-cut example is that of futures
trading. Opinion appears divided on whether it is necessary to
segregate futures margins from all other assets. This
segregation can be achieved, of course, by splitting futures
contacts across the various feeders although this partially
defeats the purpose of the master-feeder structure.
Cross-collateralisation - a drawback
The major disadvantage of the master-feeder
structure is that all assets and liabilities of the master
fund are cross-collateralised; that is, any asset is available
to satisfy any liability in the event of liquidation. This can
be a problem for investors where there is more than one share
class (i.e. risk profile) being traded in a single master
fund. The advantage of larger credit lines needs to be weighed
against the effective indemnity each share class issues to
every other share class in the same master fund. Some
investors in, say, a lower risk class might be reluctant to
take on the risk of a more volatile class "blowing up" and
dragging down the rest of the fund; "ring-fencing" each class
into a separate master funds is one solution.
Don't forget the other rules!
Master-feeder structures address the problem
of combining US and non-US investors. They do not, however,
eliminate the need to monitor the overall number and type of
US investors (e.g. 3.c.1 funds or 3.c.7 funds) or the level of
benefit plan participation in the fund ("ERISA" rules). One
must be careful not to stray into unanticipated legal
liability or onerous US regulatory reporting.
Master-feeder variations
The repeal in the US of the offshore "10
commandments" has increased the flexibility of the
master-feeder structure. For instance, it appears that the
master fund can now be a domestic partnership without adverse
tax consequences to investors from the offshore feeder. Unlike
with an offshore master fund, however, the number and type of
offshore investors in a domestic master fund will affect
filing exemptions under US law which "looks through" the
partnership to the ultimate investor. This is bound to make
non-US investors uncomfortable.
Seek legal advice
This discussion is only an overview of
master-feeder structures. Any fund manager looking to
establish a master-feeder structure is strongly advised to
obtain legal counsel / tax advice beforehand as regulations
are always subject to revision, and each situation must be
assessed on the basis of its specific circumstances.
Top
Q : What should I look for when I
choose a fund administrator?
A : There are several factors which will affect
your choice of administrator and it is essential that you
allot sufficient time during the setting up of your fund to
perform thorough due diligence. You may feel ill-equipped to
assess the relative strengths and weaknesses of competing
administrators, so here are some guidelines:
Technology: the speed and accuracy
with which your investors will receive their valuations depend
largely on the effectiveness with which the Administrator uses
technology. When asked, all Administrators will claim to be
technologically adept so it's up to you to probe a little
further. Be specific and ask some more searching questions,
for example:
Will trades be uploaded into the
Administrator's systems electronically (if not, you'll be
paying for someone to re-key your trades manually with the
attendant likelihood of delays and errors);
If there are feeds to prime brokers and
counter parties how are these used (if they're just used to
print off statements which are then reconciled manually
they're of little use);
Are investor records and fee calculations
maintained on spreadsheets (if they are, are you comfortable
with that and will your investors be?).
Don't be afraid to ask for demonstrations of
software/ copies of sample reports etc.
Reporting: each month end, you or one
of your staff will have to reconcile the NAV and performance
the Administrator has generated with what you have calculated
it to be. This process can be frustrating and time consuming
if your Administrator's systems don't produce information in a
way which allows you to identify differences easily. For
example, if you group your positions into trading strategies,
can your Administrators' systems duplicate them? If not,
you'll be trying to compare your strategised P/L to an entire
portfolio of assets grouped in all likelihood by instrument
type. Good luck! Find out how the Administrator's system
analyses the NAV. For example:
How does it report FX revaluation P/L?
How does it report repo financing?
Does it report the Month-to-date P/L by
position combining both realised and unrealised profits?
Does it produce the fund's constituent
foreign currency balance sheets or just a USD consolidated
one?
Does it report the Fund's FX exposure?
By asking these kinds of questions, you will
soon build up a picture of the reporting capabilities of the
Administrator and the expertise of the people you are dealing
with.
Staffing: the person who solicits your
business at most of the large Administrators is not going to
be the person who will actually be responsible for your
account. Therefore, find out who will be. Ask for how many
other clients that person is responsible and assess whether
his workload will allow him to provide you with the level of
service you expect. Think about it: if he has five clients
whose NAV's have to go out within five working days of
month-end and you're the smallest account he has, just how
high a priority will your fund be? Furthermore, if things do
start to go wrong, which members of senior management will be
available to address your grievances? It's a good idea to get
names of some of the Administrator's other clients and speak
to them about these issues.
Cost: in fund administration, as in
everything else, YOU GET WHAT YOU PAY FOR. In our
experience, investors are far more sensitive to an
unresponsive Administrator who reports their valuations late
than they are to a few extra basis points off their returns.
It is critical in the process of setting up and launching a
new fund that in your (understandable) effort to minimize
costs, the interests of your investors (who are the primary
beneficiaries of a good Administration service) are not
forgotten.
A final thought: a little time spent on a
rigorous due diligence process can prevent considerable
problems later on. The process of changing administrators
should you be dissatisfied with the one you've chosen is
time-consuming, costly and will inevitably raise questions
from your investors. It is in everyone's interests to get the
decision right the first time.
Top
Q : What are the differences between
the performance fee methodologies?
A : Broadly, there are 2 types of performance fee
methods: the "average" method, which looks at the fund's
performance as a whole and the "series" method which looks at
the individual investor's performance. Each method has its
pros and cons and in practice, many performance fees contain
elements of both methodologies.
"Average" method
The average method calculates the performance
fees against the net new profits of the fund in a given
period, usually on a monthly basis. This method is biased
towards new investors, however, and for this reason is
considered by many hedge fund professionals to be unfair. For
instance, if a fund currently shows a cumulative loss, a new
investor will not suffer performance fee on his profits (i.e..
will get a "free ride") until the fund recovers such loss as
adjusted for any redemptions. New investors will also benefit
from the clawback of performance fees accrued in previous
periods. That is why this method is known as the "average"
method; the monthly performance fee for the fund is "averaged"
across all investors irrespective of their individual trading
gains or losses. Clearly the greater the profit and loss
swings, the greater these distortions become which is why the
average method is less suited to volatile funds.
One partial solution to this problem is to
harmonise the subscription and the performance fee payment
cycles. New investors can only subscribe at the beginning of a
performance fee cycle when there is no possibility of fee
clawback. Fund managers, however, may be unwilling to restrict
their ability to raise capital for the sake of a more
even-handed performance method. Also, due to the asymmetric
nature of the performance fee calculation, this modification
still does not eliminate free rides to new investors where the
fund is "underwater".
The advantage of the average method, however,
is that it is relatively easy to calculate.
"Series" method
The series method is more suited to volatile
funds since returns are effectively calculated at an
individual investment level. There are essentially 2 series
methods: Pure series and equalisation (there are various types
of equalisation). A series is a collection of subscriptions on
a specific investment date although a series can be even more
precise and represent a specific investor attribute (e.g. all
subscriptions from US investors on 1 January 1999). (See
"Different Fee Rates" , "Special Gains" below).
Pure Series
Pure series charges fees in accordance with
each investment's performance, having regard to the current
high water mark for that investment. The gross return of each
investment in a given month may be compared further with a
hurdle rate of return defined in the PPM (Private Placement
Memorandum) in order to determine the magnitude of these fees
(see "Hurdle Rates" below). Investments in identical series
will therefore show identical NAVs per share, gross, and net
returns. The disadvantage is that the fund ends up with
multiple NAVs per share and net returns since: an investment
in one series might show a cumulative loss (i.e. no fees
charged) at the end of the month while another shows a
cumulative profit (i.e. fee charged).
all new series tend for simplicity to start
at a common base price (e.g. $100 per share).
However, it is fair because no investor gets
a free ride on fees. Many managers dislike pure series however
because there is no single share price or net return to report
to investors. Operationally there is more work too, than with
the average method since every subscription and redemption
must be allocated to a series.
Equalisation
An answer to the problem of multiple NAVs per
share is equalisation. As the name suggests, this method
"equalises" the share price across different series. There are
several methods of equalisation but for a simple illustration
of the pros and cons, let's concentrate on a variation where
"free units" are issued to investors in all but the lowest
share price series (eg. bonus equalisation). The free units
are issued in such quantity to reduce every series NAV per
share to the LOWEST series NAV per share. That way, the fund
ends up with a unique NAV per share. Simple, no? Until the
fund manager tries to explain it in the PPM or to investors
whose shareholding keeps changing each month. Confusion also
arises since the net return of an investment in a given month
cannot be derived from the movement in the fund's share price;
the issue of free units equalises the NAV per share but does
not affect the NAV of individual investments in the fund.
That's why many fund managers and investors
dislike equalisation. Equalisation is better for very
sophisticated investors.
Alternatively, one could equalise the other
way around by crunching or redeeming shares at zero cost to
raise each investor's NAV per share to the HIGHEST series NAV
per share. The problem is that 1) investors will ask why
shares are being "stolen" from them and 2) in some tax
jurisdictions, redemptions (irrespective of their nature) are
treated as taxable events.
Other more common types of equalisation
require the investor to subscribe at a gross asset value (or
"GAV") which ignores any accrued but unpaid incentive fee and
may require the additional payment of a credit equalisation
balance or depreciation deposit depending on whether the fund
is above or below its high water mark. The result is that all
investors have the same capital per share at risk and the fund
generates a single NAV per share that reflects the fund's true
performance. Investor free rides and excess incentive fees are
avoided via the equalisation mechanism; equalisation
contributions will be converted into additional shares for the
investor or additional fees for the investment manager at the
end of an incentive fee crystallisation cycle depending on the
performance of the investor over the same interval. If this
already sounds confusing, imagine the difficulty in explaining
it to investors. This complexity of the credit equalisation
method is its biggest drawback although it remains popular
amongst technically-minded lawyers and investment managers.
Also, credit equalisation does not allow the use of a hurdle
rate since by definition this would result in differential
returns therefore and multiple share prices across investors
(see "Hurdle Rates" below)
Different Fee Rates
It is not uncommon for a fund manager to
agree different fee percentages with different investors.
Discounts are sometimes offered to management, employees, or
long-standing investors. The series method, by definition,
caters for this. Funds which use the average method, however,
are committed to issuing a single NAV. In the first instance,
fees are calculated according to the PPM's standard management
and performance fee rate. Investors subject to lower rates are
then compensated with a rebate via the fund manager or receive
an appropriate number of new shares. such arrangement are
normally subject to side-letter agreements between the
investor and the investment manager.
Special Gains
Hot issue and Reg 'S' gains/losses can create
differential gross returns. Some US investors are prohibited
from participating in these gains/ losses and therefore the
fund administrator must allocate such gains/losses away from
these investors before calculating performance fees. Again,
the series method is best equipped to handle this
complication. An alternative is to launch a separate share
classes for each investor attribute (e.g. restricted vs.
unrestricted investors), each with its own performance fee
methodology.
Hurdle Rates
Hurdle rates have an intuitive appeal to
investors. As a form of fee discount, they are also a useful
tool for raising capital. Hurdle rates can be linked to any
number of indices: t-bills, fed funds, S&P 500 etc. The
more complex the hurdle rate, however, the longer it usually
takes for the fund administrator to calculate the NAV (see
below). Hurdle rates fit well with the series method.
Technology
An important factor that should be taken into
consideration when selecting a performance fee methodology is
the fund administrator's ability to calculate these fees and
report to investors within a reasonable timeframe. One of the
biggest headaches is to calculate the cumulative impact of
redemptions on high water marks. Many administrators track
shareholder details and fee calculations on spreadsheets. This
highly manual approach is, to say the least, inefficient and
prone to embarrassing error.
Some shareholder database applications
alleviate this process although most stop at the point at
which fees need to be calculated. Indeed, it is no easy task
to parameterize and program the vast number of performance fee
permutations although it is fair to say that there are certain
principles common to most methodologies. The quality of
systems available in this area is will undoubtedly improve as
the hedge fund industry matures.
Conclusion
No performance fee method is perfect with
fairness usually achieved at the cost of simplicity or
simplicity achieved at the cost of transparency. In practice,
the choice of performance fee methodology is often a
compromise between the investment manager's preference and the
fund administrator's technical and technological capabilities.
Top
Foreign Exchange (FX)
Exposure
Q : "So if your accounting system has
multi-currency capability, why can't it produce a simple FX
exposure report?"
A : Monitoring FX exposure is one of the most
important risk controls in any international business and yet
is by far the most neglected. Some fund managers who invest in
overseas markets, for instance, have a rough idea of their
portfolio's FX exposure but very few are able to quantify it
regularly with any precision. One problem is that many
managers (and operations staff) falsely equate FX exposure
with long or short cash balances. FX exposure is a NET ASSET
concept, not a TREASURY concept although FX exposure does have
important treasury implications. The more serious obstacle,
however, is the lack of coherent and independent FX exposure
reporting in most "multi-currency" accounting systems.
FX exposure is not a particularly difficult
notion to grasp. Which adds to the mystery of why so few
accounting systems are able to calculate and present it on a
single report. Much of the blame lies with the industry's
obsession with financial reporting, as dictated by external
requirements, at the expense of useful management reporting
for day-to-day decision-making. Naturally every fund manager
wants a smooth audit but try using financial reports to assess
your portfolio's FX exposure. And is the ability to quickly
summarise average unrealised gains across a trading instrument
category for a financial year really more important than being
able to quickly evaluate profit and loss exposure to a
potential 5% swing in the USD/JPY exchange rate?
To fully understand FX exposure, we must
first acknowledge the irrelevance of realised vs. unrealised
profits. There is a peculiar idea amongst many fund
professionals that unrealised profits or loss in a foreign
currency are somehow "intangible" and therefore do not affect
the FX exposure of a portfolio. This is incorrect. Broadly, FX
exposure reflects the NET ASSETS of a particular currency,
irrespective of whether those net assets are represented by
realised or unrealised gains. If a fund's capital is US dollar
based and the fund holds JPY-denominated securities, those
unrealised JPY profits and losses need to be revalued into USD
at the end of each day at the closing USD/JPY exchange rates.
Which means that any "multi-currency" accounting system which
is unable to produce self-contained balance sheets for each of
its underlying currencies will most likely struggle to produce
meaningful FX exposure reports.
Specifically, FX exposure includes:
1. Trading p/l from foreign currency-dominated securities
2. Foreign currency expenses
3. Foreign exchange
deals: spot and forward
These are the most common examples of
explicit FX exposure which, with the normal exception of
forward FX trades, are captured by the general ledger postings
in any "multi-currency" accounting system worthy of the
description. Forward FX trades can be valued leg-by-leg using
appropriate discount factors or, more commonly, net using the
appropriate forward rate. Net valuations, however, hide the
true FX exposure from the general ledger. Furthermore, FX
exposure can be implicit, ie. it is not captured in any
accounting system general ledger posting. Such exposure arises
from derivative type instruments such as ADRs convertibles, FX
futures, FX options and cross-currency swaps. For instance, an
USD-denominated ADR on a Norwegian security may not appear
carry FX exposure since the security tends to be bought or
sold in USD. However, this ADR instrument is merely a
derivative based on an underlying NOK-denominated security.
Buying an ADR, therefore, is a proxy for buying the NOK
security in NOK and simultaneously buying back the NOK for
USD. The trader has gone long NOK and shorted USD.
One area that sometimes causes confusion is
FX swaps. An FX swap is a cash management tool consisting of a
pair of spot and forward fx deals and is a popular method of
managing a short-term foreign currency cash deficit. It is
important to emphasise for the benefit of those new to FX
exposure concepts that FX swaps do NOT substantially alter FX
exposure since the forward leg merely "reverses" the FX
exposure of the spot leg at a later date. Unfortunately, many
deficient FX exposure reports systematically ignore forward FX
exposure. This dangerous oversight can obviously result in
badly mistaken hedging or trading decisions.
An advanced "multi-currency" accounting
system should be able to recognise and quantify properly all
of the above FX exposures based on either the individual
security parameters or transaction/general ledger posting
details. It then becomes a relatively straightforward exercise
to summarise at various levels (eg. trading strategy, overall
portfolio) the total FX exposure.
Always remember: FX exposure is one risk area
where bad information is probably worse that no information.
Don't let the accounting system salesman gloss over it!
Top
Databases vs. Spreadsheets
"It won't take long to set it up on a
spreadsheet."
"I'm not a programmer. I haven't got time to
learn to code."
"Everyone can follow a spreadsheet. Very few
people understand databases."
"It's easy to fix a spreadsheet. It's
transparent. When a database goes wrong it's a nightmare."
"A spreadsheet is very flexible and easy to
customise."
"It would cost a fortune to get someone to
program this. Let's knock it out on a spreadsheet."
"I can't be bothered to wait for IT to get
around to it. I'll just use a spreadsheet."
This is a small sample of the arguments
advanced by professional administrators in defense of
extensive reliance on spreadsheets. They are not always wrong.
To be fair, deadline pressures on administrators are such that
few have the time to contemplate strategic information
technology (IT) solutions. So spreadsheets often seem like the
most reasonable compromise.
Unfortunately spreadsheets are fragile and
are seldom transferable between users without substantial
amendment. Manual intervention on a monster spreadsheet is
generally frequent, if not excessive; the ease with which data
or formulae can be copied incorrectly or incompletely is the
biggest drawback of this popular financial data tool. Never
mind the data validation and protection features which abound
in all spreadsheet software; these are all too often
sacrificed in the heat of the moment to arrive at an
"expeditious" solution. "I can improve the data validation at
a later date" is the usual excuse. Which is normally crowned
several days later by the notorious office cri de coeur "My
spreadsheet is corrupted!". Spreadsheets are indeed flexible
but this attractive feature is usually source of their
downfall. Data input, manipulation and presentation are
performed within each cell. And when this complex mixture of
functions makes contact with human error, the results can be
embarrassing and/or occasionally catastrophic.
Historically, an administrator's input into
system development has been limited to specifying user
requirements to an IT department or external systems
consultant lacking detailed industry knowledge. The gulf of
skills between administrator and IT specialist was deemed
immutable, viewed as wide as that between doctor and lawyer.
The arrival of user-friendly PC-based database software (eg.
Microsoft Access) has shattered these bureaucratic myths.
Database software today is quickly bridging the gap between
the administrator and the computer programmer to the extent
where some database solutions require little or no programming
knowledge. In fact, not only does such software allow
administrators to design strategic solutions to simple
data-intensive problems, in some relatively complex instances
it may be MORE efficient for an experienced and knowledgeable
administrator to program an application than to turn to a
professional programmer. This is especially true in a
cost-conscious small organisation. Provided, of course, the
administrator is willing to invest time to master relational
database programming.
Database programming is generally not
considered to be the proper role for a fund administrator.
Indeed, time spent programming is time lost servicing an extra
client. This may be the case in the short-run. But who is
better off in the long-run? The client serviced by the
administrator who spends hours each month copying and changing
formulae to handle an extra investor or a new variation on a
performance methodology? Or the client serviced by the
administrator-programmer who took time early on to define a
comprehensive data model and only periodically updates his
database application to satisfy a new reporting requirement?
Spreadsheet "solutions" are often symptomatic of the lack of
strategic data management in many organisations. Unfortunately
fund administration is a prime culprit.
There is nothing inherently evil about using
spreadsheets in fund administration. On the contrary, a
spreadsheet in an excellent medium for storing and
transferring raw transaction data. Moreover spreadsheets are
ideal for modeling performance algorithms which can then be
translated into application code. The real mistake is to treat
a spreadsheet as a system, something strategic which can stand
the test of time. In fact, the biggest obstacle to debunking
the almighty spreadsheet is what one might call the
"spreadsheet mentality" as represented by the quotations at
the outset of this article. Again, spreadsheets are so easy to
abuse. Getting an administrator to think in terms of data
models, data relationships and data queries instead of
instantaneous visual solutions is almost counter-intuitive.
Yet it is the basis for creating robust data-intensive
applications. Here again is where the small administrator
holds the advantage over the larger players. It is much easier
for a small niche-player to indoctrinate and train a small
group of highly motivated staff. Larger players have greater
financial resources to spend on IT but also have to confront
tremendous IT inertia from both IT and non-IT staff alike
whose roles are highly compartmentalised and often
politicised.
There are, of course, drawbacks to an
authentic database approach to fund administration. In
addition to training staff to program, projects must be
outlined and co-ordinated. Programming standards need to be
strict and programming code must be carefully annotated.
Testing of releases must be carefully controlled and
painstaking. Managing this process competently, however, will
result in reliable multi-user applications which will quickly
outstrip the short-term benefits of a myriad of unkempt
spreadsheets with dangling formulae and data. Herein lies a
further advantage of the database approach. Different
spreadsheets may perform similar functions but are akin to an
art gallery; no common theme or overriding strategy is usually
identifiable. On the other hand. database modelling and
programming, if implemented properly, enforces a conformity
and discipline that promote a common work language and IT
outlook amongst all staff. Moreover, solid database
applications enhance managerial efficiency and side-step many
of the data integrity and security weaknesses of the average
"friendly and flexible"spreadsheet.
Still, the spreadsheet "disease" won't be
cured any time soon. Spreadsheets, for reasons good and bad,
will continue to appeal to all sorts of people including the
non-programmer, the impatient, the time-pressured, the
PC-beginner, etc. The real question is whether spreadsheets
are an efficient and reliable way for a fund administrator to
discharge his duties to his clients.
It bears some thought.
Top
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