Case Study: Family Office

A multi-billion dollar, New York-based Family Office, who invests in hedge funds, private equity funds, and directly-held equity, fixed income, and derivative instruments, required position and reporting functionality that could not be accomodated by the existing vendor systems they were utilizing.

Challenge

The Family Office did not have a way to consolidate the managing and reporting of positions, given their unique asset class mix. They were relying on a vendor-provided private equity management system, but this resulted in a series of workarounds to book hedge fund and other directly-held positions. In addition to already using many disparate Excel worksheets, they were trying to utilize this system as their global portfolio management and reporting application. Unfortunately, it was primarily designed for private equity investments. As a result of trying to maintain many worksheets and the vendor limitations, the client found it challenging to implement a reporting process that could handle the asset class diversity of the firm.

Solution

In response to the above challenge, NorthPoint implemented an operating platform that consisted of the following major components:

• Data Warehouse
• Security Master
• Portfolio Management and Reporting
• Performance Calculation Engine

Today, the Data Warehouse in conjunction with a robust Securities Master, acts as the centralized repository for all of the client's transactions and positions. This enables the client to have a flexible and truly scalable way to manage and enhance all of their position attributes, necessary for their reporting process.

The Portfolio Management tool allows the client to track their global investments and attributes, and now gives them a flexible and meaningful reporting function. Behind the scenes, a Performance Calculation Engine provides the capacity to calculate P&L and performance on-the-fly without the usual delays associated in recalculating fund P&L. 

Benefits

• Provides a consolidated reporting function via a centralized data warehouse that supports all of the client's asset types
• Provides sophisticated data enrichment to address the vendor system limitations, while continuing to leverage the investment in that software
• Increases efficiency by removing the dependency on multiple Excel worksheet updating, and enables vastly superior performance of P&L calculations based on position NAVs, cash flows, and real-time Bloomberg pricing
• Offers a customizable and a flexible reporting tool for quarterly reports and historical investment/benchmark information
• Acts as a foundation to support additional investment vehicles and assets through a scalable operating platform