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Changing the way investors and managers communicate


The flow of information between hedge fund managers and investors has historically been challenging for both parties.

The flow of information between hedge fund managers and investors has historically been challenging for both parties. Investors have struggled for more than a decade with manual data entry of qualitative and quantitative information they receive monthly, weekly and even daily directly from managers. Even today, you can walk into multi-billion-dollar funds of hedge funds or family office to find a cadre of analysts and even the portfolio manager entering data. Not only is the process error-prone and time-consuming, it delays more important analysis and reporting.

For hedge funds and other alternative investment managers, the challenges are different, but no less disruptive. Managers must produce more frequent qualitative and quantitative updates for investors than ever before, but the methods of transmission (PDF, fax, email) are not secure or automated at either end. Managers must typically create separate documents for different distribution groups (investors, prospects, third-party marketers, etc.) and, increasingly, investors have begun to require daily, weekly or monthly updates to proprietary data-collection templates or web sites to obtain specific performance, risk and due-diligence information.

The hedge fund industry may have grown enormously in the past decade, become much more open and transparent, but the communications workflow between managers and investors and prospects hasn’t changed at all – until now. PerTrac Financial Solutions has just launched PerTrac P-Card, an electronic communication mechanism that allows managers to privately, seamlessly and securely share information with investors.

A PerTrac P-Card is a secure, lightweight email attachment generated by a fund manager that, when opened with the PerTrac Reader application, automatically deposits the data it contains (including daily, weekly and monthly returns, AUM, and even sensitive fund risk and exposure information) into the appropriate fund record in the recipient’s PerTrac Analytical software. Think of it like an electronic business card you might send or receive – only instead of contact data, it transmits all the critical performance and qualitative information on which our industry relies.

Managers decide in advance which pieces of information they wish to distribute. Then, when they enter updated fund information, the free P-Card Generator automatically creates P-Cards that contain that fund’s information, which the manager can then email directly to their distribution lists. Managers can update their funds’ P-Cards and send them out as often as they wish, and customise the data distributed in the P-Cards for specific recipients or groups with just a few mouse clicks. Managers can also attach monthly letters and ancillary spreadsheets, which provides an extra layer of security for sensitive information, since P-Cards are encrypted.

P-Cards will revolutionise the information distribution workflow of the alternative investment industry because it automates a critical process without fundamentally changing the way managers and investors interact. P-Cards are sent directly from manager to investor, just like the letters, faxes, PDFs and emails sent today. Yet in one simple application, the data distribution and collection dilemma is solved for both managers and investors – no more manual entry, increased productivity for both parties, improved communication and transparency.

Given events of the last few months, communication between managers and investors has never been more important. With investors hungrier than ever for information and even once reticent managers increasingly willing to provide it, P-Card aims to fix their antiquated communication system and further bolster transparency. P-Card is an idea whose time has come.

Meredith Jones is a managing director and head of global marketing at PerTrac Financial Solutions

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