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Case Study 1 Asian Focused Asset Manager with $1billion Assets Under Management

Please note that company name and some details have been changed to preserve client confidentiality.

Name Hana Capital
Mandates Hana Capital is a fund manager specialising in Asia Pacific equities for institutional clients and accredited investors. Hana takes an absolute return approach to investing and have 5 funds that are based in USD/JPY/AUD/EURO.
Assets Under Management $1 BILLION +
Strategies Long/Short
Markets Asia Pac (Incl. Japan)
Instruments Equities
Equity Swaps
Bonds
Index Futures
Equity Options
Counterparties Deutsche Bank Prime Broker
Administrators HSBC Administrator
Location Australia
Start Date 2007
What requirements did the client have?
Live/Historical NAV and P&L

Hana's key requirement was to view a live and historical NAV and P&L of their funds. Hana wanted visibility on the fund's exposures (i.e. Long / Short / Gross / Net) and performance attribution by geography, sector, asset class and directional exposure.

Automated Order Sizing / Portfolio Modelling

Hana size their market orders by determining how much of a stock to trade to increase or decrease a position/s weight as a percentage of the NAV of the fund. Hana had managed this process manually using spreadsheets which took a considerable time to complete and had to be done within a tight timeframe before the markets opened for the day. Hana wanted to automate this process using a portfolio modelling tool.

Hana also wanted to have the orders generated by a portfolio modelling tool to be imported into their execution management system (Bloomberg EMSX) to eliminate manual data entry between the two systems.

Automate workflow

Hana wanted to automate as much as possible of the trade confirmation, data flow to prime brokers and administrators, and reconciliation processes.

How has FMO met these requirements?
Live/Historical NAV and P&L

Hana use standard reports in FMO to report live/historical:

  • Long/Short Exposures
  • P&L per open position from inception and for the day
  • realised P&L on closing trades
  • dividends
  • cash
  • NAV

Hana have also created customized reports using the FMO Report Builder to report on trades, exposures, stock location, P&L in the front and middle office. These reports can be run either live or historically and be outputted to various formats including HTML / PDF / Excel / CSV / XML.

Benefit to Client:

The reports assist Hana to monitor their exposures and performance to assess their investment strategies and ensure they are not breaching set mandates.

Hana also use the information in FMO to market their fund's performance to investors.

Automated Order Sizing / Portfolio Modelling

FMO provides clients with a Portfolio Modelling function that calculates the quantity to be traded for a stock/s in order to achieve a desired position/cash target exposure. The trades recommended in the portfolio modelling tool are then generated as orders in the FMO Order Blotter.

FMO is also integrated with front office trading applications such as Bloomberg EMS via the FIX protocol. This allows FMO to not only capture a copy of all trades from these systems, but also send orders generated in FMO, eliminating the need to re key them into the Bloomberg EMS.

Benefit to Client:

Hana have saved a considerable amount of time by using the portfolio modelling functions in FMO to size their orders each day.

Automated Workflow, Trade File Upload and Reconciliations

Hana use FMO to quickly confirm trades, send trade files to prime brokers and administrators, and to automate custodial and bank reconciliations to be automated with any exceptions reported.

Benefit to Client:

Hana middle office staff save hours each day.

Why was the FMO deployment successful?

  • The NAV, P&L and other reports were accurate and easy to use, and the customized reports were easy to set up
  • FMO was intuitive to use and required minimal training
  • Hana has been very happy with the customisations that were made to the portfolio modelling tool which had provided them with significant time reductions in completing a business critical/time critical process.

Case Study 2 Asian Focused Asset Manager with Unit Trusts and Individually Managed Accounts (IMAs)

Please note that company name and some details have been changed to preserve client confidentiality.

Name Hahn Capital Partners
Mandates Hahn Capital is a fund manager specializing in Asia Pacific equities for institutional clients and accredited investors. Hahn takes an absolute return approach to investing and has 2 funds and 3 IMAs that are based in USD.
FUM $300 MILLION +
Strategies Long
Markets Asia Pac (Incl. Japan)
Instruments Equities
Bonds
Equity Options
Counterparties Deutsche Bank - Prime Broker
Administrators Citco Administrator
Location Hong Kong
Start Date 1993
What requirements did the client have?
Automated Order Sizing / Portfolio Modeling

Hahn must ensure that trades done on the market are allocated across their unit trust products and IMAs in pari passu. Hanh also had to ensure that orders didn't breach IMA mandates.

Hahn had managed this process manually using spreadsheets which took a considerable time to complete and had to be done within a tight timeframe before the markets opened for the day. Hahn wanted to automate this process using a portfolio modeling tool.

Hahn also wanted to have the orders generated by a portfolio modeling tool to be imported into their execution management system (Bloomberg EMSX) to eliminate manual data entry between the two systems.

Consolidated Account Reporting

Hahn's key requirement was to re-create the custom views, they had used for years in Excel spreadsheets, in FMO so they could monitor the exposures per stock across all funds and other specific information at the click of a button.

How has FMO met these requirements?
Automated Order Sizing / Portfolio Modeling

FMO provides clients with a Portfolio Modeling function that calculates the quantity to be traded for a stock/s in order to achieve a desired position/cash target exposure. The trades recommended in the portfolio modeling tool are then generated as orders in the FMO Order Blotter.

FMO is also integrated with front office trading applications such as Bloomberg EMS via the FIX protocol. This allows FMO to not only capture a copy of all trades from these systems, but also send orders generated in FMO, eliminating the need to re key them into the Bloomberg EMS.

Benefit to Client:

Hahn has saved a considerable amount of time by using the portfolio modeling functions in FMO to size their orders each day.

Live/Historical NAV and P&L

Hahn use standard reports in FMO to report live/historical:

  • Long/Short Exposures
  • P&L per open position from inception and for the day
  • Realized P&L on closing trades
  • Dividends
  • Cash
  • NAV

Hahn have also created customized reports using the FMO Report Builder to report on trades, exposures, stock location, P&L in the front and middle office. These reports can be run either live or historically and be outputted to various formats including HTML / PDF / Excel / CSV / XML.

Benefit to Client:

The reports assist Hahn to monitor their exposures across all accounts in a single view. Reports are used by staff all over the world.

Why was the FMO deployment successful?

  • The NAV, P&L and other reports were accurate and easy to use, and the customized reports were easy to set up
  • Hahn has been very happy with the portfolio modeling functions which had provided them with significant time reductions in completing a business critical/time critical process.

Case Study 3 Hong Kong Based Fund Manager With $300M+ Under Management

Please note that company name and some details have been changed to preserve client confidentiality.

Name New Horizon Capital
Mandates New Horizon Capital manages assets for a family office and a fund. The fund is an Asia ex-Japan long-short equity fund.
FUM $300 Million+
Strategies Long/Short. Ex-Japan long-short equity fund.
Markets Asia Pac ex Japan (KRW / TWD / SGD / MYR / CNY / INR / PHP / THB)
Instruments Equities
Equity Swaps
Index Futures
Index/Equity Options
FX Fwds
Counterparties UBS Prime Broker
Citigroup Prime Broker
Morgan Stanley Prime Broker
Administrators HSBC Administrator
Location Hong Kong
Start Date 2005
What requirements did the client have?
Managing Counterparty Risk using Multiple Prime Brokers

New Horizon diversifies their counterparty risk by using multiple prime brokers. This can increase the workload in the middle office for trade settlement instructions and consolidating the reporting and reconciliation of assets held among multiple custodians.

External System Integration

New Horizon manage money for a very large US based asset manager, and must adhere to strict reporting requirements relating to their investment activities on a daily and weekly basis. The US based asset manager required that this information be provided to them in a particular format via a FTP upload.

Remote Access

New Horizon wanted remote access to information relating to their funds as their analysts are often away from the office visiting clients or working from their China office.

How has FMO met these requirements?
Managing Counterparty Risk using Multiple Prime Brokers

FMO enables clients to set-up multiple prime brokers for each fund on the system. Prime brokers that FMO is currently integrated with include:

  • Deutsche Prime
  • Merrill Lynch
  • Citigroup
  • UBS
  • Goldman Sachs
  • Morgan Stanley

Clients can send electronic trade settlement instructions to multiple prime brokers, as well as access reports in FMO to provide a single overview of assets held with various counterparties.

FMO also provides clients with an automated reconciliation function that will automatically reconcile the holdings in FMO to Positions Reports that are automatically uploaded into FMO from their prime broker/s.

Benefit to Client:

The consolidated reporting and reconciliation functions in FMO provide New Horizon with significant time savings in reconciling and reporting on their holdings with multiple prime brokers. This means that the operational impact of adding additional prime brokers can be efficiently managed.

External System Integration

FMO can interface with external systems in a variety of ways including:

  • Web Services
  • FTP
  • XML over HTTP
  • FIX protocol

Interfaces can be initiated by the user, or by the system requesting the data from FMO. Interfaces can also be scheduled according to client requirements.

In the case of New Horizon, custom reports were created by FMO staff that are uploaded to the asset manager's FTP servers.

Benefit to Client:

New Horizon were able to adhere to the asset managers demanding reporting requirements within the short timeline imposed due to the efforts of FMO staff. This was done at no charge to New Horizon Capital, even though it was specific to their needs.

Remote Access

FMO is a web-based system and can be accessed anywhere via the Internet. Clients do not require any additional hardware or software to use FMO.

Benefit to Client:

FMO has enabled New Horizon to operate the business when out of the office. It has also saved them the costs of purchasing additional hardware or IT support costs.




Case Study 4 Small Multi Strategy Asia & UK Hedge Fund

Please note that company name and some details have been changed to preserve client confidentiality.

Name Queen Capital
Mandates Event driven and arbitrage fund.
Assets Under Management $100M
Strategies Long/Short
Event Driven
Arbitrage
Currency Neutral
Markets Asia Pac (KRW / JPY / TWD / SGD / MYR / AUD / RMB)
UK
Instruments Equities
Equity Swaps
Index Futures
Index/Equity Options
FX Fwds / Non-Deliverable FX Forwards (NDF's)
Counterparties Goldman Sachs Prime Broker
Administrators Kingsway Taitz Administrator
Location Australia
Start Date 2007
What requirements did the client have?
Real Time NAV / P&L

Queen's key requirement was to be able to view the real time NAV and P&L of the master fund while the markets were open. Queen also wanted visibility on the fund's exposures (i.e. Long / Short / Gross / Net / Delta Adjusted) and performance attribution by geography, sector, asset class and directional exposure.

Integration

Queen Capital required a system that could easily integrate with counterparties or third party systems. These included prime brokers (Goldman Sachs), order management systems (Bloomberg EMSX) and internal systems developed by the client. FMO has integrated to these third party systems using technologies including FIX protocol, FTP and FMO iQ.

Remote Access

Queen Capital required a system that could be easily accessed either in the office or from home as they trade day and night and staff sometimes work from home or are travelling.

How has FMO met these requirements?
It took two weeks to set up FMO for Queen in order to successfully go live. This set up was performed as part of the license fee by FMO staff and included some onsite work. As FMO is delivered as an online service, Queen did not have to purchase nor install any hardware or software to run FMO.
Real Time NAV / P&L Reports Outputted Into Excel

A custom report was quickly created for Queen based on their specific requirements in terms of content and layout using the FMO Report Builder. This was a real time report that showed:

  • per open position a month to date and daily p&l, days held, 30 day volatility swings, delta adjusted exposures;
  • unrealised and realised P&L on open FX positions
  • realised P&L on closing trades
  • dividends
  • cash
  • NAV

The positions were grouped by directional exposure and consisted of equities, futures, currencies and swaps. The report was then embedded in an Excel spreadsheet and sourced data directly from FMO on refresh, as well as data from their Bloomberg Terminal.

Queen have also created other reports using the FMO Report Builder to report on trades, exposures, stock location, P&L in the front and middle office. These reports can be run either live or historically and be output to various formats including HTML / PDF / Excel / CSV / XML.

Benefit to Client:

The reports created for Queen in FMO have assisted the front office to make quick and decisive decisions to either seize opportunities in the market or avoid breaching risk limits, by monitoring their positions and the NAV of the fund in real time.

Integration with Prime Brokers and third party trading systems

FMO was already integrated with Goldman Sachs Prime Brokerage and so minimal effort was involved in setting up the necessary FTP connections.

FMO is also integrated with front office trading applications such as Bloomberg EMS and IRESS. This allows FMO to capture a copy of all trades from these systems, eliminating the need to rekey them into the system. This integration is done using the industry standard FIX protocol.

Queen can also create XML data extracts in the FMO Report Builder that can be accessed from other external systems through a simple HTTP request.

Likewise, FMO can access data from external systems using FTP or a web service call.

Benefit to Client:

Systems integration between FMO and third party systems not only saves time and reduces costs for Queen, but also minimises data input error and operational risk but not double handling data.

Remote Access

FMO is a web-based system and can be accessed anywhere via the Internet. Clients do not require any additional hardware or software to use FMO.

Benefit to Client:

FMO has enabled Queen to operate the business when out of the office. It has also saved them the costs of purchasing additional hardware or IT support costs.

Why was the FMO deployment successful?

  • Custom reports outputted into Excel were able to be quickly generated showing the important information to the Principal and Chief Administration Officer from day one.
  • The go live deadline was met due to the reporting module being easily customized, and the hands on support from FMO staff.
  • The system was intuitive and easy to use. On day one Queen was using FMO to manage their daily workflow, entering and confirming trades and interacting with the prime broker. One day two Queen was customizing reports themselves.

Case Study 5 Small Europe & USA Focused Fund Manager

Please note that company name and some details have been changed to preserve client confidentiality.

Name Phillip Investors
Mandates Phillip Investors manages capital for a small number of high net worth individuals, family offices, endowment funds and other wholesale clients. Phillip invests the capital it manages in a relatively small number of high quality equities.
FUM $100 MILLION +
Strategies Long Only
Markets Europe / United States
Instruments Equities
Counterparties UBS Prime Broker
Administrators Kingsway Taitz Administrator
Location Australia
Start Date 2006
What requirements did the client have?
Live/Historical NAV and P&L

Phillip Investors' key requirement was to view a live and historical NAV and P&L of their funds. Phillip wanted visibility on the fund's exposures and performance attribution by geography, sector and asset class.

Automated Order Sizing / Portfolio Modelling

Phillip Investors size their market orders by determining how much of a stock to trade to increase or decrease a position/s weight as a percentage of the NAV of the fund. Phillip Investors had managed this process manually using spreadsheets which took a considerable time to complete and had to be done within a tight timeframe before the markets opened for the day.

How has FMO met these requirements?
Live/Historical NAV and P&L outputted in customised Excel reports

A customised and automated reporting solution was designed for Phillip Investors using the FMO Report Builder. These FMO reports were then embedded into Excel spreadsheets so that the user could simply refresh the report data in Excel, without having to log into FMO and generate the reports manually.

Phillip Investors have also created other reports using the FMO Report Builder to report on trades, exposures, stock location, P&L in the front and middle office. These reports can be run either live or historically and be output to various formats including HTML / PDF / Excel / CSV / XML.

Benefit to Client:

This technology greatly assisted the Chief Financial Officer to prepare the daily morning reports for the Chief Investment Officer by reducing the time to collate and organize the relevant data and organise it.

Automated Order Sizing / Portfolio Modelling

FMO provides clients with a Portfolio Modelling function that calculates the quantity to be traded for a stock/s in order to achieve a desired position/cash target exposure. The trades recommended in the portfolio modelling tool are then generated as orders in the FMO Order Blotter.

FMO is also integrated with front office trading applications such as Bloomberg EMSX via the industry standard FIX protocol. This allows FMO to not only capture a copy of all trades from these systems, but also to send to trading applications orders generated in FMO, eliminating the need to re key them into the system.

Benefit to Client:

Phillip Investors have saved a considerable amount of time by using the portfolio modelling functions in FMO to size their orders each day.

Why was the FMO deployment successful?

  • The client has been very happy with the customised reports outputted in Microsoft Excel which have become a standard part of their daily process.
  • Users found FMO simple and intuitive to use
  • As the system is web based, users have been easily able to generate reports while at home or travelling, even when there have been problems with the company VPN.

Case Study 6 Small Australia focused equity fund manager

Please note that company name and some details have been changed to preserve client confidentiality.

Name Ponting Capital
Mandates Ponting Capital is a small privately owned funds management and private equity business.
FUM $50M
Strategies Long/Short
Markets Australia
Instruments Equities
Counterparties Deutsche Bank Prime Broker
Administrators Kingsway Taitz Administrator
Location Australia
Start Date 2007
What requirements did the client have?
Real Time NAV / P&L

Ponting Capital were previously meeting their reporting needs using spreadsheets. It took a considerable amount of time to manually calculate and update the exposures and P&L as trades were filled on the market.

Ponting Capital's key requirement was to view the real time NAV and P&L of their fund whilst the markets were open. Ponting wanted visibility on the fund's exposures (i.e. Long / Short / Gross / Net ) and performance attribution by sector, asset class and directional exposure.

Automated Workflow

Ponting Capital comprises of only 4 people, so it was important to them to automate as many processes as possible to ensure that generating their real time NAV and P&L didn't consume too much of their time.

At the same time, they also wanted trades fed into FMO to be electronically sent to their prime broker (Deutsche Bank) and administrator (Kingsway Taitz), which could then be automatically reconciled in FMO against the Prime Broker's records to ensure that the NAV and P&L reported in FMO was correct.

How has FMO met these requirements?
Ponting Capital licensed FMO in 2007. As FMO is delivered as an online service, Ponting did not have to purchase nor install any hardware or software to run FMO. It took two weeks to set up FMO for Ponting in order to successfully go live. This set up was performed as part of the license fee by FMO staff and included some onsite work.
Real Time NAV / P&L

A custom report was quickly created for Ponting Capital based on their specific requirements in terms of content and layout using the FMO Report Builder. This was a real time report that showed:

  • per open position a month to date and daily p&l, days held, gross and net exposures;
  • realised P&L on closing trades
  • dividends
  • cash
  • NAV

The positions were grouped by directional exposure and then embedded in an Excel spreadsheet. Data was sourced directly from FMO on refresh, as well as from their Bloomberg Terminal.

Ponting Capital have also created other reports using the FMO Report Builder to report on trades, exposures, stock location, P&L in the front and middle office. These reports can be run either live or historically and be output to various formats including HTML / PDF / Excel / CSV / XML.

Benefit to Client:

The reports created for Ponting Capital in FMO have assisted the front office to make quick decisions to either seize opportunities in the market, or avoid breaching risk limits, by monitoring their positions and the NAV of the fund in real time and in a way that was custom to their needs.

Automated Workflow including Accounting Journals, Trial Balance & Reconciliations

FMO produces an updated NAV and P&L every time a trade/transaction is entered in the system. At the same FMO automatically processes accounting journals for every trade/transaction entered so that it can also produce an updated trial balance for the fund.

FMO also provides clients with reconciliation functions to reconcile the data in FMO against their counterparties.

FMO was already integrated with Deutsche Bank Prime Services and so minimal effort was involved in setting up the necessary FTP connections.

FMO is also integrated with front office trading applications such as Bloomberg EMS and IRESS. This allows FMO to capture a copy of all trades from these systems, eliminating the need to re key them into the system. This integration is done using the industry standard FIX protocol.

Benefit to Client:

By using FMO to create a straight through / automated workflow, Ponting Capital have enjoyed significant time savings which meant they could focus more on growing their fund. It has also reduced the potential for errors which could result in failed trade settlements which can incur fines.

Why was the FMO deployment successful?

  • The client has achieved their main goal of creating an automated workflow that not only supports their investment decision making in the front office, but also enables them to run the middle and back office without hiring additional staff.
  • The system was intuitive and easy to use. Ponting Capital was quickly using FMO to manage their daily workflow, entering and confirming trades and interacting with the prime broker.

Case Study 7 Large Investment Firm with Multiple Funds & Portfolios Investing Globally

Please note that company name and some details have been changed to preserve client confidentiality.

Name Mayell Group
Mandates Large Investment company taking positions in diverse asset and debt classes in markets around the world. Mayell transaction volumes exceed 20,000 per year.
FUM $1 Billion +
Strategies Long/Short
Fundamental Stock Picking
Currency Neutral
Short Term Trading
Markets US
Europe
Asia
Instruments Govt/Corporate Debt
Equities
Equity Swaps
Index Futures
Index/Equity/Bond Options
Currencies
Counterparties Deutsche Bank Prime Broker
UBS Prime Broker
Goldman Sachs Prime Broker
NAB - Custodian
Macquarie Futures Clearing
Location Australia
Start Date 2007
What requirements did the client have?
Complex Fund Structures

Mayell has a complex corporate structure to accommodate a range of needs relating to investments, wealth segregation and preservation, taxation planning and philanthropy.

From a front office perspective, Mayell demand visibility into the magnitude and performance of their investment activities to manage their market, sector and currency risks, on a live and historical basis.

From a back office perspective, Mayell require that the investment activities of various separate yet related entities are accounted for in both independent and consolidated general ledgers sufficient for audit, tax and statutory reporting.

Flexible Workflow & Reporting

Mayell's success has come largely from making shrewd business decisions to capitalise on new opportunities while avoiding threats to the preservation of their capital.

This has often led to the creation of new investment strategies, changing counterparty relationships and entering into new markets or products.

Mayell have demanded flexible workflow and reporting systems that quickly adapt to their changing needs, allowing them to move quickly on these opportunities or mitigate against the realisation of perceived risks.

How has FMO met these requirements?
Complex Fund Structures

FMO enables clients to set up complex fund structures by dividing a fund into a front office view and a back office view.

Within the front office view, clients can organise their investments into different portfolio/s in order to separately report on the exposures and performance of either particular manager/analyst, strategy or any other basis. Portfolios can then be grouped for consolidated reporting.

The 'Back Office' view to a fund can consist of multiple entities, each with their own chart of accounts. This provides the fund accountants with a traditional accounting view of the funds investment activities as at a period in time in the form of a Balance Sheet and P&L Statement.

Benefit to Client:

Separating the fund into a front and back office view enables clients to deliver on reporting needs that differ significantly between the investment managers in the front office (portfolio level) and the fund accountants in the back office (fund level). It is also a scalable model that can grow with the needs of the clients as the need arises to try out and assess new strategies / managers.

FMO also enables the client to manage data security internally within the organisation so that users can only view investment data linked to the portfolio/s and report/s they have access to.

Finally, as FMO is an integrated front and back office system, it automatically updates the front office reports as well as the fund's general ledger as trades are initially entered into the system. This can save a considerable amount of time and expense if the journals relating to fund's investment activity had to be manually journaled in another system.

Flexible Workflow & Reporting

FMO is built using modern software development technologies and object oriented software design principals. This enables the system to be regularly enhanced to meet the changing needs of our clients, and for solutions to be delivered to clients within quick timeframes.

Benefit to Client:

As Mayell continue to pursue new opportunities and manage perceived issues in the ever changing economy they invest in, their needs have and will continue to evolve over time. FMO has enabled Mayell to stay ahead of the curve through tools that enable them to customise what they see and automate what they do.