Less burden from operations infrastructure frees up capacity to expand. Using an outsourced shadow-accounting firm allows hedge funds to take advantage of the economies of scale offered by a shared platform. Therefore, outsourced shadow-accounting firms can invest more heavily in operations, technology, and training, with the costs spread across multiple clients.
What has been the most innovative or helpful aspect of your shadow firm’s service?
"The ability to scale the size of the team and amount of resources that we need based on our project plan has been a hugely helpful part of the engagement."
CFO at a $6 billion hedge fund
Straight-through processing, the ability to process transactions without manual intervention, is commonly provided by outsourced shadow-accounting firms. Removing the need for manual intervention speeds up the process, reduces errors and allows enhanced visibility into daily operations.
Daily outsourced shadow automated reports include
Today’s hedge fund operations headcounts can run as high as 40. Once a manager’s back and middle office staff rises beyond eight or nine people, there may be more shadow accountants than traders. Often, valuation requires specialized expertise beyond what most companies can cost-effectively develop themselves and more hands are added to keep up with growing complexity. Thus, resource intensive internal shadow-accounting can limit a "firm’s ability to grow and offer new products, to implement new strategies and to enter new markets."