Middle office NAV oversight: Independent fee calculation and validation for hedge and UCITS funds


Thursday, June 18, 2020 | By Ron Tannenbaum, Managing Director, EMEA Business Development, SS&C GlobeOp

Middle office NAV oversight: Independent fee calculation and validation for hedge and UCITS funds

Investors expect fund managers to maintain proper oversight for all outsourced services, including calculation of Net Asset Value (NAV). Management and performance fees are critical components to NAV calculation, and investors would benefit from independent, unbiased fee verification.

NAV calculation is typically performed by the fund’s administrator, with fund managers repeating the calculations for reconciliation. Most elements in the process are accommodated in standard general ledger (GL) systems, but complex performance fees are often mired in legacy systems—or worse, processed in manual spreadsheets—leading to inefficiency and errors.

Adding more layers of complexity to the process are the customized fee arrangements and side-letter deals many fund managers now offer to investors. The intricacy of non-standardized, bespoke fee structures increases the risk of errors. When demands for increased liquidity require calculation on a monthly, weekly or daily basis, management and performance fees need to be recalculated each time.

SS&C’s automated, independent fee calculation offers managers a solution to meet oversight requirements while relieving the burden on in-house staff. Managers can achieve the rapid turnaround time investors expect while ensuring accurate fee comparisons against the fund administrator’s calculations.

Performance and management fee verification is one part of SS&C’s Shadow NAV Oversight Services.  SS&C offers industry-leading fund administration, outsourced trade support, and infrastructure services outright and/or as a Shadow to the fund’s current administrator. SS&C’s independent shadow fee calculation and oversight service ensures fund NAV accuracy and is available stand-alone or as part of our broader shadow mandates.

To learn more about the challenges of fee calculations and how SS&C can help, download our whitepaper, “Middle office NAV oversight: Independent fee calculation and validation for hedge and UCITS funds.”



Alternative Investments, EMEA, Fund Administration


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