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Leading administrators, accounting firms, and fund managers, responsible for over 3500 funds with over $400B in assets under management, deploy HedgeTek.
HedgeTek was developed to service the economic and tax allocation requirements for
investor level accounting in investment partnerships such as hedge funds. The software
allocates ordinary income, expense, unrecognized and recognized gains losses to Partners/Investors
at designated intervals or at the time of capital actions.
HedgeTek is rules based to accommodate requirements such as multiple income and expense classes for different investors (e.g. general and limited partners), whose rights may vary with respect to the amount, timing, character or origin of those items (e.g., specific types of income may belong to only certain classes of investors).
The system has the ability to support multi-tiered structures of numerous layers, as found in complex master feeders and fund of funds. As HedgeTek supports both capital based and unitized vehicles (multi-series/class and equalization) within a single platform, seamless allocation of income and expense will flow accurately across and down these structures.
Rules are leveraged to support the complex side pocket functionality, used for illiquid investments. Eligible investors can be flagged, and caps can be set. Multiple investments can be individually tracked within a given side pocket for performance fee purposes. Management and performance fees can be accrued within side pockets and paid within the liquid class. Partners fully withdrawn from the liquid class will still accrue income and fees associated with open positions remaining in side pockets. Fees are automatically net against any future payables to be distributed outside the fund. Upon partial withdrawals from the liquid class, corresponding percentages of all side pocket positions can be earmarked for future withdrawal upon side pocket maturity.
HedgeTek, supports private equity structures and the new “hybrid” structures deployed within Hedge Funds. Rules are deployed to create the waterfall structures, including variable GP catch-up schedules.
A comprehensive audit trail report tracks any manual change or adjustment to P&L, capital actions, or indicative data, related to fund, investor or management company structures. Reports can be generated to cover any activity period, for specific users or workstations, and can focus on specific types of activity to help isolate the data for analysis.
Three allocation capital allocation methodologies are supported:
- Full Netting
- Partial Netting
- Book Only Method
Both Full and Partial Netting support the following processes:
- Break period allocation
- Annual aggregation using weighted average capital
- Tax adjustments - importing allocation details calculated
elsewhere, to perform necessary tax adjustments and then
generate Schedule K-1's.
HedgeTek is equipped with a proprietary interface engine to simplify the receipt of profit and loss items to be allocated among the participants. P&L can be mapped on a one-to-one, many-to-one, or one-to-many basis from any general ledger of similar structure, thereby supporting any portfolio/fund accounting system. Interfaces have successfully been deployed both with proprietary systems as well as with most of the commonly used third party fund accounting platforms in the industry. As unique deployments of Accounting Engines and General Ledgers is commonplace, the generic interface was designed to simplify the effort required without requiring extensive changes to the existing workflow.
HedgeTek also provides a fully functional user interface, where fund level data
income, expense and gain/loss) as well as any necessary data adjustments (from current
or prior periods), can be manually entered if so desired.
HedgeTek provides other powerful interface tools to import, map, and validate the necessary data to complete the full allocation process. These include:
- Financial data received in any spreadsheet format (i.e. Excel).
- Customer indicative data from other sources, to be used in reporting
and relationship management functions.
- Capital actions including all subscriptions and redemptions, contributions
and withdrawals.
HedgeTek also provides a generous set of predefined book and tax operating reports and statements. In addition there is a data warehouse, complete with a descriptive data dictionary that is updated synchronously and maintained separately from the production database. This repository can be used with any commercial report writer for in-house development of proprietary statements or reports. In addition, HedgeTek has a statement production module that facilitates the setup and distribution of statement packages to both investors and other interested parties at regularly scheduled intervals.
Visit our HedgeTek Flash Site Click Here
For more information please call or email:
Barry Mermelstein (212) 271-1992 bmermelstein@fi-tek.com
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