Net Asset Value (NAV) Calculation & Reporting
The calculation and reporting of a fund’s NAV is the single most important function performed by an administrator. . The speed and accuracy with which this process is carried out are critical to maintaining investor and trading counterparty confidence. At Fulcrum, we have devoted nearly all of our development time and effort to automating the production of our client funds’ NAVs, placing particular emphasis on the following areas:
Trade and journal capture:
All clients transmit their trades to us electronically via E-mail or through remote ftp access. Trade files are then uploaded automatically into our accounting system. As a result, there is almost no time wasted in duplication of trade input, while input errors are virtually eliminated. Standard journal templates are used to automate repetitive non-trading postings and reduce significantly opportunity for manual error.
The accounting system:
At the core of our NAV process is Advent Geneva, a multi-security, multi-currency general ledger accounting system. Geneva was designed specifically for hedge fund administration and provides a wide breadth of insturment coverage that greatly facilitates the NAV process.
Management reporting:
Fully strategised position and P/L information is produced for all full service clients along with various trial balance and foreign exchange exposure reports.
Third party reconciliations:
A client’s NAV cannot be issued to investors until the fund balance sheet has been reconciled to trading counterparty and custodian statements. Almost all banks and institutions use websites to provide their hedge fund clients and administrators with downloads of transaction and ledger information. We have taken full advantage of these facilities and in many cases have automated the reconciliation of trading positions and cash balances.
Investor reporting:
All investor information is maintained on Investor Central®, Fulcrum's proprietary share registry and transfer agency database application. The processing of subscriptions and redemptions, the calculation of incentive and management fees and the generation of investor confirmations and performance reports are part of the key functionality of this application. This automation ensures the consistency and accuracy of all investor reporting while allowing us to produce month-end investor reports upon the finalisation of the monthly trading profit or loss.