Prime Fund Solutions has launched a complete front, middle and back office service for fund of hedge funds managers. The new PFS Horizon platform allows fund of funds to manage the entire investment process through one interface, dramatically simplifying the number of systems and services that most funds of funds currently require.

Key features the service facilitates include: online trade execution with post trade monitoring and reporting; position analysis with drill down to investment activity details and cash movements; cash forecasting/projection with future liquidity profile; and comprehensive investment information including withdrawal terms, lockups and optional exits, redemption holdbacks, gates, fee terms and side letters.“We believe this new technology represents a significant step forward in the fund of hedge funds middle office and reporting arena,” says Erik Jens, CEO of Prime Fund Solutions, commenting on the release. “Our ability to provide greater transparency, asset safety and robust infrastructure are key to the success of our fund clients as businesses.”

The aim is for PFS Horizon to bring funds of funds a full transaction-based custody portfolio and investment management system. It uses a single point of control to allow a manager to oversee the entire investment lifecycle, actual and hypothetical, from start to finish. The platform has been developed through the combination of PFS’ existing administration and custody infrastructure and sophisticated front-end IT systems developed in conjunction with Comada.

Single manger hedge funds have advanced their operational sophistication in recent years, but the greater operational complexity of funds of funds has mean that progress in this area has lagged. Indeed, many $1 billion-plus funds of funds still monitor liquidity and cash positions, among other operational functions, with Excel. “A lot of funds of funds have archaic operating models,” says Charlie Woolnough, UK regional director of sales and marketing with PFS. “The Horizon system pulls everything together and therefore reduces operational risk for fund of fund managers. The by-product is that they become more investible for institutional investors.”

For funds of funds the cost of an in-house operational solution in terms of software creation and system maintenance is prohibitively expense. For this reason, some institutional investors require a fund of fund to have several billion in assets, assuming that such scale is necessary to finance the infrastructure over the long term. The middle office functions of funds of funds can be particularly labour intensive.