Following the 2008 financial crisis, coupled with the Madoff scandal as well as the failure/insolvency of several financial service firms, and with increasing regulations and investor demands for transparency, engaging a third party to “shadow” your fund’s administrator has become an industry norm.
As investment managers look to strengthen their middle and back office operations, they realize the benefits of partnering with administrators like AFA who are SOC I compliant and have the expertise in trade capture, reconciliation, and price verification to ensure fund data is complete and accurate. As a result, shadow accounting is growing in popularity as investment managers offer their clients the additional level of comfort that an outside firm is verifying their portfolio reporting.
AFA has implemented a solution to capture, reconcile and verify the pricing of portfolios so as to “shadow” the investment manager’s own back office reporting, while offering an important independent check for investors. Responsibility for accurate valuation reporting remains with the investment manager, but the addition of this “shadow” role when performed by AFA provides a greater level of comfort for investors.
AFA will work with fund clients, as well as investment managers or directors who are performing certain fund accounting functions “in-house” or who have contracted with a third party fund administrator, to customize a client’s shadow administration program that is tailored to meet specific needs.
AFA’s shadow accounting services focus on the areas of fund accounting and investor services.
AFA’s Shadow Fund Accounting Services are performed by experienced AFA accountants and encompass verification of the following:
Shadow Investor Services provides fund managers with accurate and up-to-date data maintained by AFA in the event of unforeseen technical difficulties or inadequate disaster recovery procedures. AFA’s services include: