IBN Fund Administration Case Study

© 2015 IBN Technologies Limited. All rights reserved.

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IBN Technologies has over 8 years of experience in delivering leading edge Middle and Back Office Outsourcing & Fund Administration Services to a base of HF/FOF Managers across the US and European markets. IBN supports your independence by giving you the flexibility to control where you direct your business. We are committed to provide Fund Managers, Money Managers, Investors and Consultants and Service Providers with superior services to achieve superior returns.

IBN provides top quality services based on clearly defined and well respected SLAs and adds significant value to a client’s business by delivering the most satisfactory solutions on time and within budget, driven by process, resources and principles.

Our services are for: Funds of Funds Hedge Funds Investment Management Companies Investors Money/Portfolio Managers Consultants and Service Providers Others entrusted with managing investment assets

About IBN

“IBN has proven track record in providing middle and back office operational support to clients with an AUM of approximately 15 billion USD”

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Fund Services Overview

Domains/ VerticalsHedge Fund, Fund of Hedge Funds, Separately Managed Account, Private Equity

Fund Administration

· Traditional Fund Administration Services· Fund Accounting & Monthly Financial

Statement Preparation· Daily Portfolio Accounting &

Reconciliation Services (Cash, Trade & Position)

· Handle Subscriptions, Redemptions & Transfer

· Audit Assistance · AML & KYC

Back & Middle Office Services

· Performance Tracking & Chasing Services· Fund Accounting· Reconciliation Services· NAV Calculation· System Updations· Monthly Financial Statement Preparations· Customized Services

Quantitative Analysis

· Performance Analysis· Statistical Analysis · Risk/ VAR Analysis· Portfolio Optimization· More High End Quantitative Research

Reporting

· Performance Tracking & Reporting Services

· Performance Reporting Services· Batch Reporting using defined parameters· Publish Investor Statement

Fund 1

Fund 2

Fund 3

Fund 4

Fund 5

Prices Tracking Est.

& Finals Portfolio Accounting & Reconciliation

Bank/ Custodian/ Prime Broker

Position Reconciliation

Trade Reconciliation

Investment Activity/ Fund Manager

Financial Reporting / Cash

PositioningInvestment Accounting

Investor

Investor

Investor

Investor

Investor Reconciliation

Reports

Trade Details

Financial Accounting / Cash Statements

IBN Back Office Services to Client

Fund Services Overview

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Overview: Active Fund Administration Engagement

Introduction

The Client is a Hedge Fund in USA Plain Vanilla Hedge Fund, trading Equities, ETF’s,

Commodities and Futures and Options The Client was looking for a Fund Administrator

with a full scale service offerings and capability to transition the process with aggressive timelines while ensuring stringent SLAs.

Process

Process was successfully transited in 2 phases. The first phase covers the following processes: - Live Jan 2008• Trade Processing & Reconciliation Services • Position Reconciliation Services• Daily NAV Calculation & Reporting• Performance ReportingThe Second Phase includes transition of following processes – Live March 2008• Monthly Financial Statement Preparation• Investor Communication & Reporting• Auditor and Prime Broker interaction.

Proposed Technology

Advent Axys Software for Trade Processing & Reporting

Advent Axys is installed at client server Document Management System to store Scan

copies of necessary documents. For Secure Access connecting via ‘Hamachi’ VPN

Connection.

IBN’s Value Proposition

Aggressive Transition timelines Transparent SLA Management and improvement Improve technology and process automation by

introducing Document Management System Providing information before the next day’s trade

starts Improved Internal Controls Experienced Team Top Management Commitment

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Services

Daily Process Flow Data Retrieval

• IBN receives trade files and price files from the Prime Broker (Goldman Sachs)

Transaction Processing

• IBN Team Reviews and Processes the transaction received in the Advent Axys software

Reporting

IBN Process Team runs the following Portfolio Reports on daily basis

• Daily Buy/Sell Report

• Portfolio Appraisal Report

• Portfolio Summary

• Portfolio Sector Analysis

• NAV Calculation & Reporting

• Portfolio Performance Report

Data Transmission

• Daily NAV and Fund Performance is reported to Fund Manager via email

• Daily Net Liquidating Value is reported to Fund Manager

Month End Flow

Month end Fund Statement are received from prime brokers

IBN reconciles data against month-end broker statements in order to ensure the accuracy of the information which was compiled on a daily basis

Valuations of hard to price securities are verified through receipt of quotes from multiple 3rd party market makers

Portfolio Accounting• Compilation and preparation of monthly reports of realized and

unrealized gain/loss, accrued dividends and interest analysis• Calculation of monthly Net Asset Value• Preparation of monthly purchase-sales journal, dividends and

interest journal• Preparation of monthly balance sheets, changes in equity, and

income statements• Preparation of a monthly General Ledger, accompanied by

appropriate documentation, including reconciliations and detailed fee schedules

• Provision of monthly balance sheets to trading advisors• Preparation and provision of reconciliations to brokers and trading

advisors• Maintenance of records of the General Ledger, brokers’ statements,

trader reports and other relevant reports received on DMS

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Services

Trade & Position ReconciliationTrade and Position Data

• IBN receives broker data overnight through the downloadable file from GSEC portal.

Reconciliation

• Trader information processed in Advent Axys is reconciled to data received from prime brokers through SLK Application Interface .

Exceptions and Breaks

• Exception reports are produced and reviewed by IBN Team

• Any breaks are analyzed and resolved.

Reporting

• Reconciled reports and NAVs are provided to fund managers by early morning T+1

• Data also provided directly to investors upon client request

Investors Services

NAVs, subscriptions and redemptions plus tax reporting information and Monthly Investor Statement

NAVs available on-line and posted on Fund website for authorized access by investors

Subscription and redemption information provided by Fund Manager and processed in Advent Axys

All investor documents scanned and available for manager on DMS.

Investor Communication• Processing of subscription documents• Transmission of offering memorandum• Confirmation of suitability requirements• Coordination of all written communication with shareholders/investors• Month End & Year-end investor reporting• Maintain registration of shareholders• Any other request from Investor

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Services

Fund Accounting

Audit Assistance

At the end of each accounting period IBN gathers Financial Data from Brokers, and other sources and reconciles internal records with the gathered data. Enters all Financial and Investor transactions into Advent Axys Software and calculates management fees, loss carry forwards, and incentive allocations in accordance with Fund Offering documents and US GAAP. It covered the following Monthly closing, income and expense accruals Calculation of performance and management fees Pricing and valuation of month end portfolio Calculation of Monthly NAV Maintenance of fund accounting books and records Preparation of monthly financial statements Preparation of monthly gains/losses reports Calculation of fund and investor performance

IBN worked closely with the Fund’s auditor and ensured timely and efficient completion of the annual audit. Via Preparation of required schedules, explaining financial transactions and other general assistance in Audit, IBN provided the complete list of reports required by the Auditors in their year end request audit list.

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The complete process methodology depends on the extent of the services required by the Fund. The general process is as follows:

IBN’s team of experts contacts the Fund Manager to discuss the requirement and understand the processes.

The team will then work closely with Fund Manager to design and document the new processes, which effectively transitions the relevant workflow to our offices in India.

Before going live we will ensure that the process is rigorously tested and that our staff is adequately trained to enable the transition to run smoothly.

Process Methodology

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Back & Middle Office Outsourcing and Fund Administration services is the main business stream of IBN. We are an independent third party service provider that is not allied to any firm, thus mitigating potential conflict of interest.

Our client management structure is designed to ensure that each client has it own dedicated staff. Small firms receive the same service as the medium/big size firms.

Our staff understands service level responsibilities and are committed to meeting client expectations and deadlines. We focus on building and maintaining the integrity of our relationships

All of our work is subject to a combination of 100% quality check and senior review. Controls have been developed specifically to meet the industry requirements and are subject to compliance and internal audit protocols.

Our facility has the entire, necessary infrastructure to support 24*7

We train our staff to provide specialist accounting support, corporate services and day to day management. We employ professionals who are ambitious and accurate, able to manage deadlines and respond to clients’ needs. Our Senior staff are qualified accountants and technical specialists.

IBN’s Value Proposition

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Thank You

For More Information

IBN Technologies LimitedCyberNex, 4th Floor

Shankar Sheth Road, Swargate, Pune, Maharashtra 411037T: +91 20 2426 4182 / 83 F: +91 20 2426 4184 E: info@ibntech.com