Perfona, OpEff's hedge fund investor relations system, offers significant operational advantages in investor management. These include:
- Calculate waterfalls — P&L allocations to investors and calculation of management and incentive fees — for shadow reconciliation to fund admin and internal record-keeping
- Act as a hedge fund CRM system, recording investor data including contact info, Social Security numbers, and KYC information
- Track client demographics, endowments, pension funds, and profit interests
- Entirely web-based — no application download or in-house IT resources required
- Automate back-office processes by providing real-time investor reporting to front office and investor relations teams
Waterfall Calculations
One of the most important aspects of private equity fund administration is waterfall calculations. If you're running a fund, your investors need to earn profit on their investments in a verifiable, systematic way. Traditionally, the waterfall calculation is performed by the Fund Administrator and signed off by the General Manager. Waterfall calculations are extremely intricate — and an investor management system like Perfona is well-suited to handle both hedge fund and private equity style waterfalls.
Each step on its own is not terribly complicated, but they each carry a chance for human error. With all the steps together, that chance is cumulative. You can visually inspect all of your calculations, but that is not only an inefficient use of your time — it still carries the risk of human error. The only guaranteed method is a waterfall calculator built into a portfolio accounting system like Perfona.
Benefits Beyond Reliability
A dedicated fund accounting software eliminates calculation risk. In addition to reliability, there are several other benefits to using investment accounting software for waterfall calculations:
- Detailed data about your investors including demographics and liquidity schedules attached to various share classes
- Understanding of how different investors behave across various client types and strategies
- Liquidity forecasting that helps you focus on your most valuable clients right before their renewal dates
- Cashflow projections that enable proactive investor relationship management
OpEff has pioneered the only system in the investment management industry that is able to handle the complete spectrum of complex investor management requirements — from waterfall calculations to KYC/AML to digital subscription documents — in a single unified platform.