Funds of Hedge Funds - Understanding the Specifics of Accounting and Custody

The objective of this module is to provide the participant with an applied understanding of the specificities of funds of hedge funds accounting and custody. In this module investor issues are covered before going into the details of trade processing, valuation accounting and reporting. This module covers the following topics:

Introduction to Hedge Funds and Funds of Hedge Funds (FoHF)

• History and investment management concept
• Major strategies and why FoHF?
• Performance fees and equalization principles
• Distribution and regulation

Trade Management and Custody

• Fund of Fund portfolio trading: global overview
• Subscriptions/redemptions/switches: the liquidity issue
• Settlement & cash monitoring
• Corporate actions
• Depositary liability under AIFMD

Accounting and Reporting

• Valuation of a FoHF portfolio
• Performance fees and equalization
• Accounting of subscriptions/redemptions /switches
• Side pockets and gates
• Reporting

Risk Management and Compliance

• Operational risk
• Portfolio risk

The objective of this module is to provide the participant with an applied understanding of the specificities of funds of hedge funds accounting and custody. In this module investor issues are covered before going into the details of trade processing, valuation accounting and reporting.

• Investors’ issues
  • Side pockets
  • Gates
  • Performance fee equalisation
• Trade processing
  • Target Fund TA (Account opening; reconciliations)
  • Custody & Settlement
  • Equalisation factors of target funds
    • Valuation & accounting
      • Equalisation factors of target funds
      • NAV estimates
      • Fair valuation
    • Key regulatory issues
      • IFRS