Anemoy’s Post

#Treasury Management #HedgeFund Managing the treasury function in hedge fund administration services revolves around safeguarding the fund’s liquidity, optimizing cash flows, managing financial risks, and ensuring efficient operations. Here are the basic principles: 1. Liquidity Management: Ensure the fund has enough liquidity to meet redemptions, margin calls, and other operational needs. This involves accurate forecasting of cash flows and maintaining optimal cash reserves. 2. Cash Flow Optimization: Streamline inflows and outflows to minimize idle cash while ensuring operational needs are met. Efficiently allocate funds for investments, payments, and settlements. 3. Risk Management: Identify and mitigate risks, such as currency, interest rate, and market volatility. This might involve hedging strategies using derivatives to protect the fund from adverse price movements. 4. Compliance and Regulatory Adherence: Ensure all treasury activities comply with relevant regulations, including those concerning capital adequacy, anti-money laundering (AML), and know-your-customer (KYC) rules. 5. Capital Efficiency: Optimize the use of capital to generate higher returns, such as through leverage (when applicable), managing collateral, and ensuring the most cost-effective funding sources. 6. Counterparty Risk: Evaluate and manage the risk of counterparties failing to meet their obligations, particularly in OTC transactions. Diversify exposure to different counterparties and continually assess their creditworthiness. 7. Technology and Automation: Use technology to automate treasury functions like cash reconciliation, reporting, and trade settlements to improve accuracy and reduce operational risks. 8. Reporting and Transparency: Maintain clear, timely, and accurate reporting to fund managers, investors, and regulators to ensure transparency in treasury operations and fund performance. 9. Collaboration with Portfolio Managers: Work closely with portfolio managers to align the treasury function with the fund’s investment strategies and goals. 10. Cost Control: Minimize the cost of funding and other treasury-related expenses, such as bank fees, by negotiating terms and managing relationships with financial institutions efficiently. These principles help ensure that the treasury function supports the fund’s investment strategy, risk management, and operational efficiency, all while adhering to regulatory standards.

“Areee, ek mutual fund batade” the most common DM from friends, family & acquaintances. 📲 🤯 At that instance, I have Only one option- to refuse any names and advise them of a consultation with me. 🥴On the surface this sounds arrogant to them. I am suddenly the geek from high school who is not sharing notes. 😶🌫️As investors they miss out on the bigger picture- The Risk profiling I do for each client. 🤫Amidst SEBI doing the Stress tests, let me tell you we do these stress test exercise with each client. We assess how much stress you can take when it comes to Your Money. This is called as Risk Profiling. 🥸Let's dig deep in what Risk is and how we do the risk profiling for each investor! 🤑Risk is the potential Financial loss one is exposed to in the respective investment. Every Investment has potential risks. Yes, your money in bank and or FDs too. And No, Its not a myth. Risk appetite is the maximum amount of risk an investor is willing to take on his journey to pursue his goals. 😋 Risk profiling is the process for assessing the ability, capacity & willingness of investor to absorb risk. 📑 Following are some of the most common asked questions, but not restricted to are: 🎂Age 👨👩👧👦Dependents 🏦Income 🪙Existing Assets & Investments 🫰Outstanding Loans 🛬Future Goals & vision 🥴His risk appetite. Based on these questions, an investor can be- Risk Averse: Scared to take any monetary risk. They are risk Conservative Investors. Most suited investments are- Deposits & Debt Instruments Risk neutral- They are balanced risk takers with an appetite to accept some losses for potential gains. They prefer investing in balanced funds, multi-asset funds, arbitrage funds or Index funds. Risk Seeking- They can take significantly high risk for potentially higher rewards. They have high tolerance for risks and can absorb significant losses. These investors invest in variety of investments from direct equity, AIFs, Crypto,to Flexicap & Small cap mutual funds. I am a Risk Seeking, Aggressive Investor. What about you?😁

20 Days of Mutual Funds (15/20)- The safe keeper of your mutual fund investments- Custodian The custodian handles safeguarding the assets of a mutual fund. The assets include securities such as stocks and bonds. The custodian ensures the physical and legal protection of these assets. They hold these assets for safekeeping. Responsibilities: 1. Safekeeping of Assets: Hold and safeguard the physical certificates or electronic records of the securities owned by the mutual fund. They ensure that these assets are secure and protected from loss or theft. 2. Settlement of Transactions: The custodian facilitates the settlement process. When a mutual fund buys or sells securities, the custodian ensures settlement. This involves the exchange of cash for securities and vice versa. They ensure the accurate and efficient execution of transactions. 3. Corporate Actions: Handle corporate actions such as dividends, and bonus issues on behalf of the mutual fund. 4. Record Keeping: Custodians maintain detailed records of the mutual fund's holdings. These records include information about the securities, their quantity, and valuation. Accurate record-keeping is essential for regulatory compliance and transparency. 5. Foreign Investments: Liaise with foreign custodians to ensure the safekeeping and settlement of assets across borders. This is applicable in case a mutual fund is investing in foreign securities. E.g. The custodian for Zerodha Fund House is Citibank(Equity schemes) & Deutsche Bank(Gold ETF)

Reality Check Again.... Mutual Funds: Myths and Realities 1. Mutual funds are only for your long-term goals: Mutual funds can be chosen based on your investment horizon and objectives. There are various short-term schemes where you can invest for a few days, weeks, or even years. Examples include Liquid Funds, Ultra Short-Term Bond Funds, Short-Term Bond Funds, and Long-Term Income Funds. 2. Investment in mutual funds is the same as investment in the share market: Mutual funds invest in a variety of markets including the stock market, bond market, and money market instruments such as Treasury Bills, Commercial Papers, and Certificates of Deposit. They also invest in Collateral Borrowing & Lending Obligations (CBLO), metals like gold, international markets, real estate, and more. An investor can choose mutual funds based on the underlying assets. 3. A mutual fund with a higher NAV is better to invest in: The NAV (Net Asset Value) of a fund is irrelevant when considering investment quality, as it represents the market value of the fund’s investments, not the market price. Capital appreciation depends on the price movement of the underlying securities. Therefore, it is more important to look at the assets held by the mutual funds rather than their NAV, which fluctuates with asset prices. 4. Buy a top-rated mutual fund for better returns: Ratings should be used only as a tool to shortlist mutual funds, not to finalize your choices. High ratings do not guarantee better returns. 5. Mutual fund portfolios don’t need to be reviewed: Even though mutual funds are managed by professionals, you should still periodically review your portfolio. Regular reviews ensure that the performance of the funds aligns with your financial objectives. If you find that the performance isn’t meeting your goals, you can take corrective action in a timely manner.

When managers of private funds decide to launch a strategy as a registered mutual fund–such as an interval fund, tender fund, or a daily NAV fund— the topic of custody can sometimes lead to confusion. Private fund managers are typically familiar with custody services provided by their prime brokers as part of a suite of services to support their private funds. However, custody for registered funds, typically provided by a bank custodian, is quite different in both the nature of services and fees. Learn more on the blog.

When managers of private funds decide to launch a strategy as a registered mutual fund–such as an interval fund, tender fund, or a daily NAV fund— the topic of custody can sometimes lead to confusion. Private fund managers are typically familiar with custody services provided by their prime brokers as part of a suite of services to support their private funds. However, custody for registered funds, typically provided by a bank custodian, is quite different in both the nature of services and fees. Learn more on the blog.

🔍 Asset Managers - Are You Trading Futures? -> Keep Reading! In today's rapidly changing financial landscape, the importance of efficient and effective market tools cannot be overstated. The recent surge in mutual funds investing in Treasury futures signals a significant shift in strategy, driven by the desire for greater leverage, better risk management, and more favorable economic conditions. 📈 Strategic Leverage & Risk Management Asset managers are increasingly turning to Treasury futures to gain exposure to interest rates, manage risks, and enhance returns through leverage without the need for traditional borrowing. Trading Technologies' platform stands out as a robust tool that provides the necessary capabilities to manage and execute these strategies efficiently. Its advanced features provide execution specialists with the tools to mitigate market impact and reduce slippage. 🚀 Enhanced Trading Efficiency The rise in mutual funds' futures holdings, especially amidst higher interest rates, underscores the need for platforms that can seamlessly handle increased volumes and provide real-time data for better decision-making. Trading Technologies offers a highly responsive and reliable platform, ensuring that asset managers can stay ahead in a competitive market by leveraging advanced analytics and execution tools. 🔐 Security and Compliance Given the regulatory complexities and the need for secure trading environments, Trading Technologies prioritizes top-notch security measures and compliance protocols. This peace of mind allows asset managers to focus on what they do best—growing their portfolios and generating alpha. 👥 Why This Matters to You Whether you're managing large asset pools or looking for an edge in Treasury futures, understanding the tools that can facilitate better outcomes is crucial. Trading Technologies' futures trading platform not only offers operational excellence but also supports strategic trading, making it an invaluable resource in today's financial toolkit. 💡 Let's Connect! Are you using futures in your investment strategy? What tools and platforms have you found effective? Let's discuss how technology is shaping the future of asset management. #TradingTechnologies #AssetManagement #TreasuryFutures #FinancialMarkets #Fintech #Innovation

Fund finance has evolved significantly post-2008 financial crisis, becoming a crucial financial instrument for investment funds. This detailed article by Nishant Sehgal, Amit G., Ankush Grover, and Chhavi Verma on Evalueserve explores the importance of NAV facilities and the adaptability of the fund finance market. Quoting Laurent Bernut, it highlights the necessity of liquidity in bear markets. Read more about the innovative solutions and challenges in the fund finance sector: Exploring New Frontiers: Unveiling Value in Fund Finance. https://lnkd.in/dzfXKyfm #FundFinance #FundFinancing #FundFinancer

What is fund administration? Fund administration is a third-party service that handles an investment fund’s accounting, limited partner (LP) reporting, asset valuation, capital calls, and capital distributions. Any type of investment fund may use fund admin services, including private equity funds and hedge funds. The traditional role of a fund administrator includes the following services: 1. Daily, weekly and monthly Net asset Value calculation (NAV) 2. Calculation of the fund’s income and expense accruals and the pricing of securities at current market value 3. Financial reporting 4. Financial statement preparation and audit liaison 5. Opening and control of fund bank accounts 6. Preparation of reports to shareholders 7. Reconciliation of the broker, custodian, bank and investment manager statements 8. Accounting services; maintenance and filing of the fund’s financial books and records 9. Payment of fund expenses 10. Settlement of daily purchases and sales of securities, ensuring collection of dividends and interests 11. Calculation and payment of dividends and distributions to the transfer agent 12. Preparation and filing of local regulatory body filings/reports 13. Pricing the portfolio of the fund 14. Calculation of the total returns and other performance measures of the fund 15. Compliance and anti-money laundering monitoring and reporting 16. Supervision of the orderly liquidation and dissolution of the fund (if required) How Technology is Reshaping Fund Administration 1. Streamlined Data Management 2. Enhanced Reporting 3. Enhanced Cybersecurity Measures 4. Increased Transparency with Blockchain 5. Mobile Applications facilitate Investor Engagement 6. Cloud Computing offers scalability and flexibility 7. AI and ML for Enhanced Decision Making Bottom Line Fund administration is an essential component of investment management, providing a wide range of services and support to investment funds. From accounting and financial reporting to investor services, compliance, and asset valuation, fund administrators play a critical role in maintaining the integrity and smooth operation of funds. Their expertise and attention to detail contribute to building investor confidence, ensuring regulatory compliance, and facilitating the growth and success of investment funds. As the investment industry continues to evolve, the role of fund administration will remain indispensable, adapting to meet the changing needs and complexities of the market. source:punchfinancial.com,waystone.com #bnymellon #fundadministration #fundadmin #fundaccounting #investmentbanking #custodian #hedgefund #regulatoryreporting #regulatorycompliance #wallstreet #fundmanagers #investmentadvisor #investmentmanagers #bankofamerica #citibank #bnpparibas #ubs #deutschebank #blackrock #jpmorganchase #morganstanley #fis #statestreet #fundadministration #fundsmanagement

The groups representing hedge funds, investment advisors etc. continue their legal fight against two SEC rules that require reporting and public disclosure of share lending and short selling activity "The two rules represent unlawful exercises of rulemaking authority, both in combination and on their own, and must be vacated in order to protect investors and the markets." “The SEC’s defective rulemaking process produced two flawed, inconsistent rules that will harm investors and the markets. The rules should be vacated,” said Bryan Corbett, MFA President and CEO. “Adopting two rules with contradictory approaches to the disclosure of data regarding short selling on the same day without explanation is arbitrary and capricious. The SEC needs to go back to the drawing board and craft rules with a consistent, coherent approach that will not harm market participants or undermine the US capital markets.” “The adoption of these two rules epitomises arbitrary and capricious rulemaking by adopting inconsistent disclosure frameworks for interlinked transactions. These rules will unnecessarily impair market efficiency and price discovery, thereby harming both markets and market participants. Accordingly, the court should vacate both rules and direct the SEC to adopt consistent reporting and disclosure regimes that take into account the interrelated nature of securities loans and short sales and are designed to protect both market efficiency and market participants,” said AIMA CEO Jack Inglis..." https://lnkd.in/e6Qb5A65