Hedge Fund Software, Family Office Software, Portfolio and Partnership Blog

March 04, 2010
Archway Accepts Nominations For Prestigious Awards

Archway is excited to announce award nominations for TechPoint's Mira Awards, Indiana Companies to Watch and the noted Inc 500/5000 recognition. We appreciate the Saturn Partners team for their willingness to nominate Archway. Stay tuned as the field narrows to finalists!

March 01, 2010
*Factors Impacting Implementations

Archway's implementation approach is unique because of the discipline it provides all aspects of a project, from methodology and project management to documentation and knowledge transfer. The AIM incorporates a systemic approach to solution deployment, taking into account the interrelationships that shape the behavior of business systems.

There are several "pressure points" that can dramatically affect the overall timeline and cost of an ATWeb implementation, such as the following:

General complexity of the entities
Desired level of procedural design (significant focus on internal controls within the organization)
Number of customizations required
Amount of historical data to convert
Condition of historical data to convert (i.e. usable electronic format vs. manual or hardcopy)
Number of systems with which ATWeb must integrate
Number of end users requiring training
Number of Client personnel available to participate in the implementation effort

February 22, 2010
*Archway Welcomes New Talent

Archway continues to reach new heights and we are excited to welcome new staff to the Product Design, Product Development and Client Service teams. We are excited about the talent coming to Archway and believe they will contribute to the success of our clients.

Notable experienced hires include Aaron Wise, Jeff Taylor, Matt Osbun and Justin Poehler. Aaron is joining the Operations Outsourcing team and will have responsibilities working with daily reconciliations. Justin joins the Product Development team and will focus on drafting specs driven from prospects and clients that have great ideas to extend ATWeb! Both Jeff and Matt have deep experience in product development and will anchor our new development and integration teams.

Archway is always planning for more hires to support the growth of our business( and yours!). For referrals or inquiries, please refer to our Careers page.

February 15, 2010
*ATWeb v4.2.5 Released Over the Weekend

Over the past weekend, the Archway team released several enhancements to the ATWeb platform. While our client base has received formal communication and training as needed, we feel it is our obligation to highlight a few enhancements to our regular readers, prospects and partners. A subset of the enhancements include the following:

A new Enterprise Portfolio menu option has been added to ATWeb that will provide Clients with improved capabilities to handle transactions related to transfers of investments. Across all transfer options, the new functionality simplifies the steps required in an investment transfer by automating the entries made in the Portfolio and Investor Modules, while posting the necessary accounting entries to the General Ledger.
Dashboard inserts depicting open positions, unrealized gains/losses and portfolio exposure have been enhanced to more accurately depict investments held in foreign currencies.
Archway Development released 16 integration-related enhancements, including updates to current integrations and integrations with new data providers.
Archway Development implemented additional functionality to the ATWeb infrastructure, which will result in faster processing of reports.
Archway Development completed the Option Symbol Changeover project which impacted the transaction, bookkeeping and position file processing of client integrations with 3rd party data providers.

February 09, 2010
*Automatic Data Integrations 101

The ATWeb integration toolkit provides clients with automatic imports of data from your providers, typically prime brokerage and custodial institutions. For integrations, clients can have integrations that include the following types of data.

Portfolio Integration Summary
The Portfolio integration functionality is used by Archway clients to load Buy/Sell activity into the Portfolio module of the application. After processing the Buy/Sell transactions into ATWeb, the system will automatically create the journal entries in the General Ledger for the Buy/Sell activity.

General Ledger Integration Summary
The General Ledger integration functionality is used by Archway clients to load cash transaction activity into the General Ledger module of the application. Cash activity would typically include transactions such as Dividend Payments, Interest Payments or Miscellaneous Expenses that are paid through a brokerage, custodial or bank account.

Position Reconciliation Integration Summary
The Position Reconciliation integration functionality allows Archway clients to load end-of-day quantity and market values for their open positions into the ATWeb Portfolio Reconciliation module. Having this external data in the Portfolio Reconciliation module allows clients to compare end-of-day balances by position as reported by their broker/custodian to end-of-day balances by position as reported by ATWeb.

Pricing Integration Summary
The Pricing integration functionality allows Archway clients to load end-of-day per unit market values for their open positions into the ATWeb Security Master. Having this data in the Security Master of ATWeb allows clients to maintain a daily pricing record for their open positions.

Cash Balance Integration Summary
The Cash Balance integration functionality will be used by Archway clients to reconcile a daily cash balance at an account level. This can be used for cash balances in either a brokerage, custodial or bank account. This integration is not currently supported in the ATWeb Production environment. However, Archway is planning to build out this capability in 2010.

January 27, 2010
*Option Symbol Changeover

Due to the increasing use of derivative instruments in today's marketplace, the Options Clearing Corporation (OCC) has decided to revise the current three to five alpha character option representation system to an expanded 21 character system on February 12, 2010.

The new naming convention provides more detailed information regarding the expiration event and can more easily accommodate the growing diversity of these securities (more information regarding the change can be found here: http://www.optionsclearing.com/initiatives/symbology/default.jsp).

Archway is working diligently to accommodate the industry change within each of its data provider integrations to ensure the transition is as seamless as possible. ATWeb users who trade options AND utilize one or more ATWeb integrations, should plan to allocate resources to attend to this matter immediately following the 2/12/2010 industry cutover. ATWeb users who carry open option positions as of 2/12/2010 will be required to update their ATWeb Security Master records for those open option positions with a revised security identifier prior to processing any option transaction activity into ATWeb following the 2/12/2010 cutover. This will ensure that inbound option transaction records for existing option positions that contain the newly created identifiers are able to locate their corresponding security master records in ATWeb during processing.

January 20, 2010
*New Archway Website Launching Soon

The Marketing team has worked closely with the Indianapolis-based design firm, Miles Design, to create a revised website. Miles Design was also the creative machine behind the current site but with more stories and successes to share, updates were warranted. The new site, slated for February, will have additional graphics of the ATWeb platform, create more visibility to Archway Services such as Operations Outsourcing and help you stay connected to Archway via Twitter and LinkedIn sites. Click here to see a snap shot of what is on the horizon.

We appreciate your feedback and the efforts of the Miles Design and Wired Ground teams.

January 14, 2010
*'Cans for Colts' Friday

The Archway team is combining charity with the support of the Colts by having 'Cans for Colts' Friday. The Archway team is encouraged to wear blue and support the Colts throughout their playoff run. Most importantly, anyone wearing Colts gear at Archway's HQ in Indy will bring in non-perishable food items that will be donated to the local food bank. Supporting a win in more ways than one!

January 11, 2010
*Archway Wraps Up 2009 with Strong Annual Event

The Archway team concluded 2009 with its annual holiday party last weekend. This year the team ventured to the gateway to the west, St. Louis. Kudos to the A2K9HP planning committee for coordinating a great event for the team and spouses / dates. The overnight trip was a success and some came away big winners!

We also had the opportunity to recognize winners of the annual awards. While there were roughly a dozen handed out key winners of the Archway team included Ryan Laughon, Brad Holifield, Rob Mcilvaine, Eric Vicars, Matt Hradek and Anya Janeway. Some of the categories included Ace in the Hole, Bull Rider, Best Mentor and Team MVP. Congrats again to the winners and the planning committee. The A2K10HP team has big shoes to fill :)

December 23, 2009
*Happy Holidays!

The Archway team would like to extend holiday wishes to you and yours! We appreciate your friendship and look forward to a prosperous 2010. The Archway team is excited about our growth plans and look forward to introducing new functionality planned for the ATWeb platform. Please have a safe and happy holiday! Look for continued updates on the blog in 2010 and remember we always appreciate your feedback. To provide your thoughts and input, please let us know by clicking here!

December 11, 2009
*Archway growing staff!

The Archway team is looking to expand! With continued growth and strong results in 2009, Archway is ramping up staff in the Product Development team. The new role will focus on client conversion services, integration builds and development. In broad terms, this individual will develop new functionality to increase the flow of transaction data from third party security brokerage firms, banking institutions and other complementary data providers. This individual will also participate in the maintenance of existing third party integrations as well as in-house applications supporting the overall data integration process. Should you or anyone you know be interested in joining a fast-past and vibrant atmosphere, please find our recent career listings here.

December 01, 2009
*ATWeb Client Case Study

Archway has few multi-family office clients ranging from ~160 entities and $350mm to a client with 1,100 entities worth an excess of $7B managed through the ATWeb platform. The following explicit needs were addressed through leveraging the ATWeb platform:

Managing Accounts - Managing accounts includes the basic administrative functions of creating, updating and tracking accounts throughout their lifecycle.

Estate Planning - Client can leverage the wealth planning benefits achieved through the use of complex organizational structures without sacrificing the ability to understand the net consequences of such structures. With the Crystal Ball, clients can clearly present the complexity of investments and the family office itself to family members and the Board.

Fee Calculation and Billing - Client charges a combination fee of asset-based (16-quarter trailing average) and hourly incremental charges for services rendered. Some of those fees, once calculated, are directly debited against client accounts, while a smaller number are manually invoiced to the clients.

Check Writing - Client pays bills on the behalf of their clients directly from the client account.

Portfolio Tracking - Each of the entities accounts maintains in some fashion a portfolio of investments. These portfolios are tracked and accounted for on a daily cycle. Reporting on the accounts is tied to monthly and quarterly cycles.

Portfolio Modeling & Rebalancing - Management of the portfolios includes the tracking of client-specific Target asset allocations against Actual allocations and adjustments in the asset mix to stay within the stated targets. (conversion in process)

Client Reporting - Reporting to the clients includes a quarterly and annual reporting package. These packages include high level account performance and position journals. In addition to performance and investment reporting, Client performs relatively sophisticated cash flow projections based upon historical averages and Client insight.

Company Reporting - Internal reporting includes the production of numerous reports mostly tailored for Financial Statements, Tax and Trust Accounting, Portfolio Reporting and regulatory compliance.

Enterprise Reporting - With customizable, easy-to-read dashboards Clients can view Asset Allocation and Consolidated Financials with full drill-through capabilities down to open tax lot detail or underlying journal entry.

November 23, 2009
*Happy Thanksgiving!

With a condensed week, the Archway team would like to wish you and yours a safe and happy Thanksgiving.

November 19, 2009
*Taking Energized Applicants for the Summer Internship Program

Archway Technology Partners is excited to announce that as a result of the continued success of the summer and winter internship programs, we are now considering candidates for the spring and summer sessions. Archway is actively looking for talented individuals to join the Services and Support teams. Ideal candidates would be juniors and seniors that have demonstrated excellence in the classroom while being active in campus activities and community events. If you meet this criteria or know someone that might, please visit our Current Openings page.

November 10, 2009
*Hedge Fund Association’s “Speak Up” Campaign Being Heard by Congress

As our blog followers have read here, there has been much speculation about the proposed legislation that will effect investment management groups over certain AUM benchmarks. The link below is a press release sponsored by The Hedge Fund Association that discuss how managers are proactively reaching out to lawmakers to educate them on the impact legislation would have on the industry.

Click here for the HFA article

November 03, 2009
*ATWeb 4.2.4 Go-Live Readiness

For the last few weeks, the Archway team has been preparing for the November 6^th ‘Go-Live' of ATWeb release 4.2.4. The highlight of the release includes extensions to trust accounting functionality, including complementary standard reports. Other new reports will provide a variation of the current Global Portfolio Appraisal report to include additional logic for ForEx reporting. Additionally, our integration with Interactive Data Corp (IDC) with provide the option to have industry SIC to facilitate enhance slice and dice reporting. Please look for full release notes in the Archway News page Friday night.

October 28, 2009
*Update on Advisor Registration Act

Yesterday the House Financial Services Committee passed the Private Fund Investment Advisors Registration Act of 2009. The bill requires private investment advisors to register with the SEC. The bill now moves on to the House of Representatives for a vote.

Under the Private Fund Investment Advisors Registration Act of 2009, advisors to hedge funds, private equity firms, single-family offices and other private pools of capital will have to follow basic rules in order to continue business in the capital markets. The Act will give regulators the authority to examine the records of all registered.

October 14, 2009
*Proposed Hedge Fund Registration Bill Now Excludes Venture Capital Funds

A proposed amendment to the administration's Private Fund Investment Advisers Registration Act of 2009 would alleviate managers of Venture Capital Funds from having to register with the SEC in the same manner as a Hedge Fund. According to the proposed bill, the SEC will define what exactly is meant by the term "venture capital funds".

Please contact Drew Alexander (317-819-5501) or Mike Landis (317-819-5483) to discuss how Archway can aide your organization with outsourced compliance.

October 12, 2009
*SaaS Deployment Options

Archway will work to accommodate your hosting requests while still providing the tier 1 client support you deserve. In addition to our standard deployment at RackSpace and Bermuda, Archway also maintains dedicated environments for clients that request their own infrastructure. While there are preferences that satisfy your requirements, rest assured your data is tightly secured and always accessible for your download. For further information about our deployment options, please contact the Sales team.

October 05, 2009
*Investment Analytics Becoming More and More Important

It is natural for investors and investment managers to focus more on risk during a down economy. As evidenced in the recent downturn (now on an uptick!), more scrutiny is being placed on better, not just more, analytics.

With an influx of demand, coupled with better systems and reports available, attainting key statistical information is possible. Either through requests of investors, or managers trying to differentiate themselves, analytical information is becoming more prevalent. Analytics could mean different things to different people but common elements include performance returns (TWR, Total Return, IRR, X-IRR) across many time horizons including Inception to Date, Year to Date, Quarter to Date and Month to Date. Relative performance should also be considered to evaluate performance against partnerships and indices.

If you're considering a technology evaluation, be sure to consider a technology infrastructure that can produce or compile these important metrics.

September 28, 2009
*ATWeb Version 4.2.3 release notes

Version 4.2.3 of the ATWeb platform was released over the weekend into the production environment. Highlights of the upgrade include the following:

Menu Structure - The first thing that users may notice within Version 4.2.3 of ATWeb is the menu structure has been modified slightly. This change was made in order to better accommodate the growing number of new features within the application and incorporate them into an intuitive navigational structure.

Portfolio Modeling and Rebalancing - The Enterprise Portfolio Modeling and Rebalancing features have been enhanced to allow users to set up Investment Guidance and track Favored, Out of Favor, and Restricted investments. The Investment Guidance functionality is the foundation for the new Rebalancing feature. These enhancements work in concert with manual user input to recommend a set of necessary portfolio transactions. In addition, the Rebalancing functionality allows for the creation of savable Sessions, which can be established for a specific date and portfolio scope. This provides users with the option to create and work on a Rebalancing effort as needed over a period of time. A Rebalancing report is available directly through the Rebalancing screen.

Enterprise General Ledger

Account Classes - General Ledger Account Classes allow users to group GL accounts for organizational and reporting purposes, similar to the way in which the other classification features work within ATWeb. Account Class configuration may be accessed from within the Enterprise General Ledger menu item.
Account Reconciliation - This new functionality provides users with the ability to reconcile cash and other General Ledger accounts between ATWeb and a secondary data source.

Accounts Payable Module

Intercompany Payments - The Accounts Payable Module now allows users to create payments out of one ATWeb Company on behalf of other ATWeb Companies.
Asset Management Integration - The two modules have been integrated to include functionality allowing users to establish a depreciable asset in the Asset Management Module when adding a new bill in the Accounts Payable Module.

Report eMail Enhancements - The email functionality has been expanded to provide additional user visibility into the reports and the recipients for which emails are being generated, prior to the emails being sent.

Benchmark Rates (Synthetic) - Users now have the ability to create single or composite-benchmarks within the ATWeb Security Master.

September 22, 2009
*Archway Visible at Family Office Metrics Conference

The date has arrived! Archway is participating in the Family Office Metrics Ops Tech conference in New York Tuesday and Wednesday. During the event there will be several opportunities to review the Archway team and ATWeb as we will be participating in the Partnership Workshop, Firing Line and based on popular demand we are scheduled for two sessions for the Technology Showcase!

Jason Brown and Ryan Laughon will be on hand leading sessions and available to talk through their experience and share perspectives of working with single and multi-family office clients. We look forward to the event and appreciate the coordination from the extended Family Office Metrics team.

September 16, 2009
*Archway highlighted in Private Wealth Magazine

In the September and October publication of Private Wealth Magazine, a feature article written by the consulting group Family Office Metrics, discusses the impact technology will play in the 21^st century family office. In the article, key discussion points were made on families finding a best in class integrated solution that will manage the back office functions and decision support responsibilities.

In the article, Jason Brown, Archway company president, discusses the evolution of platforms and the traditional perspective of technology and how that has evolved to meet greater client demands.

Archway is focused on being the premier technology provider. To learn more about our perspective on the evolution of technology, please read the following white paper.

To read more of the aforementioned article, click here.

September 11, 2009
*Quick Updates at Archway

Welcome back to an abbreviated holiday week. This week has been busy pushing features through design and development in preparation for next week's system testing! Some Senior Consultants have been visiting clients and the Sales team has been busy with demonstrations - even in the midst of clients finalizing taxes for the October 15 deadline.

Good news and exciting times continue. Look for an announcement for an addition to the Archway team next week!

Archway is mindful of the 9/11/01 remembrance. Condolences and Appreciation continue.

September 01, 2009
*Full Archway Line up at Family Office Metrics OpsTech 10 Conference

On September 22 and 23^rd in New York City, Archway is participating in several breakout sessions that aim to enhance the participant experience. Archway's company president, Jason Brown, will be leading the breakout demonstration session and participating in the vendor firing line in which ‘leading family office technology providers answer the tough questions.'

In addition those sessions, Ryan Laughon, EVP of Product Development, will team with Rothstein Kass to lead a Partnership Accounting workshop.

To learn more, visit our Events page.

August 26, 2009
*Full-Service Family Office Reporting Firm Selects ATWeb Enterprise Platform

Archway is excited about a new partnership! Look for a press release in the coming week about a new offshore, full-service family office reporting firm selecting the ATWeb Enterprise Platform.

August 18, 2009

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August 12, 2009
*Compliance Update: Over-the-Counter Derivatives Market Act of 2009

Yesterday the Obama Administration proposed a bill named the "Over-the-Counter Derivatives Market Act of 2009". The bill proposes to amend a number of securities laws to aide in regulation of the OTC derivatives market.

The proposed legislation will force the OTC derivative markets (including CDS and all other OTC derivative markets) to be subject to comprehensive regulation in order to:

Guard against activities in those markets that pose excessive risk to the financial system
Promote transparency in those markets
Prevent market manipulation, fraud, insider trading, and other market abuses
Block OTC derivatives from being marketed to "unsophisticated" investors

The regulation will be obtained by:

Require central clearing and trading of standardized OTC derivatives
Move more OTC derivatives into central clearing and exchange trading
Require Transparency for all OTC derivative markets
Extend the scope of regulation to cover all OTC derivative dealers and other major participants
Bring robust and comprehensive prudential regulations to all OTC derivative dealers and other major participants
Provide the CFTC and SEC with the tools and information necessary to prevent manipulation, fraud and insider trading
Better protection for "unsophisticated" investors through a more robust definition of eligible investors

Archway is dedicated to providing you with the most current regulatory updates. If you would like to find out how Archway can ease the burden of compliance, please do not hesitate to contact Mike Landis (317)819-5483 or Drew Alexander (317)819-5501.

August 03, 2009
*Pending Compliance Movements

HFTA

3(c)(1) and 3(c)(7) allows for exceptions for private funds based on the following parameters:

1. 3(c)(1) - Under 100 beneficial owners
2. 3(c)(7) - Funds made up of solely qualified purchasers

The HFTA will replace 3(c)(1) and 3(c)(7) with sections 6(a)(6) and 6(a)(7). The exceptions will turn into exemptions for private funds in excess of $50 million in net assets as long as the following four (4) conditions are met:

             1.   Registration with the SEC
             2.   File an annual registration form
             3.   Maintain books and records as required by the SEC
            4.   Cooperate with an exam or request for information by the SEC

Funds relying on the exemptions for 6(a)(6) and 6(a)(7) would have to establish an AML program and report suspicious transactions.
The Secretary of the Treasury, along with the CFTC and SEC, have been tasked with finalizing the AML rules within 180 days of enactment of the HFTA.
The ‘120 hour rule' would apply to private funds as it does to mutual funds.
Managers would not have to register with the SEC, which is a change from the '04 registration bill that was overturned by the DC courts.
The HFTA will give the SEC the power to obtain the information that it deems appropriate to obtain (i.e. portfolio holdings).

Private Fund Investment Advisors Registration Act of 2009

All advisors of private investment funds with more than $30 million in assets under management would have to register with the SEC.

Substantial regulatory reporting requirements with respect to leverage, assets, and off-balance sheet exposure
Disclosure requirements in the PPM
Strong conflict of interest and anti-fraud prohibitions
SEC exams and record-keeping requirements
Comprehensive compliance program

Private Fund Transparency Act of 2009

Registration would be required for those that manage in excess of $30 million. The SEC would have the authority to pull information from private funds.

Hedge Fund Advisor Act 2009

Managers must register with the SEC if they have in excess of $30 million.

July 27, 2009
*ATWeb 4.2.2 Release Notes

Portfolio Modeling - The Portfolio Modeling functionality has been expanded to allow users the ability to compare portfolio models to actual investment holdings, as of a specified date. The Model to Actual page displays the currency and percent variances between the targeted and actual market values. Updated multi-column sort functionality allows the user to order the investment statistics into numerous ascending/descending arrangements.

Reports - The following new reports have been released:

Open Positions by Security Type - This report is a variation of the Open Positions report. Alternatively, this report sorts the company's open positions, as of the specified date, by Security Type. The report includes a column identifying the portfolio in which each position is held.
Company Exposure - The reports below provide the user with the ability to view the exposure of a single Company, Company Class, and Class Option across all entities linked by an Equity account, as well as the holdings that flow through in a nested entity relationship.

               o Company Class Exposure by Security Class
               o Company Class Exposure by Security Type
               o Company Exposure by Security Class
               o Company Exposure by Security Type

Profile Class Exposure - These reports are variations of the Profile Exposure reports. Alternatively, the reports below provide the user with the ability to view the exposure of a single Profile Class and Class Option across all entities linked by an Equity account, as well as the holdings that flow through in a nested entity relationship.

o Profile Class Exposure by Security Class
o Profile Class Exposure by Security Type

July 13, 2009
*Family Office Financial Executives Forum – TOMORROW!

It's not too late to sign up for the Family Office Exchange Financial Executive Forum. For more information, visit our Events page for more details. Following the two day event, Archway will share information about the forum and other noteworthy items new in the single family office space.

July 06, 2009
*Archway to Invade Your Front Office!

First, we hope you enjoyed Independence day!

Look for a press release in the coming weeks highlighting new capabilities that provides the front office with advance portfolio tools. Archway is poised to continue building new extensions in ATWeb that will benefit users from the front office to the back office. With ATWeb's unique approach, linking the entire operation and building an enterprise platform is becoming a reality. The new extension will feature portfolio modeling capabilities and soon assist investment officers in portfolio rebalancing.

Also, read our latest white paper about 'Evolving to a World Class Technology Solution'

July 01, 2009
*Fast Fact

Insurance for Hedge Funds has risen 20 percent in the last six months.

June 23, 2009
*ATWeb 4.2.1 Release

Archway Technology is pleased to announce the following updates now available in the ATWeb Enterprise Edition:

Portfolio Modeling - Users now have the ability to build a portfolio model within ATWeb. Users can build models by Security Types and Security Classes, then associate each with a Profile, Profile Class, Company, or Company Class.

Cash Management Workflow - Enhancements have been added to the Cash Management process to provide additional efficiency to the approval process.

Portfolio Module Enhancements - Call to learn more!

Private Equity Enhancements - Users will see a new feature added in the Security Master to process transactions associated with investments in Private Equity.

Reports - We are now at 95 reports. The following new reports have been released:

Profile Exposure - The reports below provide the User the ability to view exposure of a single Profile across all entities linked by an Equity account, as well as the holdings that flow through in a nested entity relationship. These reports are available through the ‘Investor' section of the Reporting Module.
- Profile Exposure by Security Class
- Profile Exposure by Security Type

Please call to learn more and as always, we welcome your feedback!

June 11, 2009
*Coming soon to a neighborhood near you: Hedge Fund Regulation

Several members of Archway's management team attended the Hedge Fund Association's event yesterday at the beautiful Bloomberg offices. The focus of the discussion was hedge fund regulation and thoughts on the proposed regulation that could come as early as this month or next. Harvey Pitt served as the keynote speaker discussing several aspects Washington is considering implementing. Several contingents including G20, UK government and US government are all in support of some type of regulation.

The general consensus was that hedge funds that hold more than $50mm in AUM will be subject to SEC registration and regulation. Among other things, this will ultimately result in producing more records and filings, AML for investors and taking SEC exams.

Additionally, there will likely be a new government agency focused on fund regulation that will enforce regulation, mandate funds provide more transparency to interested parties, staff that will analyze fund activity and determining which disclosures have value and how the information is disseminated.

The above regulations make it very relevant to consider Archway's software and services to ensure managers are operationally sound with data that is reconciled, transparent, available for audit and demonstrates organizational compliance.

June 03, 2009
*Archway Extends Family Office Software Road Show

Based on the early success of the Family Office Software Road Show, the exhibit will continue! Over the next few weeks, Archway leadership will be traveling to New York, Chicago and Texas to discuss the latest features being released for the Family Office.

To date Archway has been strong at understanding Exposure and Look-through but somewhat weak in presenting the network of these structures. With the new ‘Crystal Ball' there is now a clear representation of interaction between companies, and the propagation of P&L.

Furthermore, the family can appreciate the complex nature of the family office the management team has set up to preserve and grow wealth. The Crystal Ball is also very relevant in portfolio modeling and understanding the net consequences of nested entities when rebalancing a portfolio. Please contact us today to learn more!

May 25, 2009
*Archway Welcomes New Talent

As Archway continues to reach new heights, we are excited to welcome new staff to the Product Development and Client Services teams. We are excited about the talent coming to Archway and believe they will contribute to the success of our clients.

Matt Hradek is an experienced hire with prior experience at a large Fund Administrator. Matt's primary role will be working on the functional development of the ATWeb software platform and the growing integration tool kit with 3^rd party providers. Additionally, Jen Rajpura joins the Client Services team assisting with new implementations and participating in client support.

Archway is always planning for more hires to support the growth of our business and yours. For referrals or inquiries, please refer to our Careers page.

May 18, 2009
*Major Release highlighted by Budgeting and Enterprise Visualization

Archway is excited to announce the following features were released in version ATWeb v4.2. Although there has been iterative enhancements to the platform, this release is viewed as Archway's first major release in several months.

Archway clients will now be able to enjoy the following capabilities:

Budgeting Module - The Budgeting Module allows Users to create budgets within ATWeb for individual Companies. Within each budget, Users can tie line items to specific Portfolios, Securities, and Code Blocks, allowing for highly flexible internal tracking.

Enterprise Breakpoints (function) - The Enterprise Breakpoints Module is an efficiency-focused enhancement designed to allow Users to close Breakpoints for all entities with the click of a button.

Enterprise Breakpoints (enterprise visualization) - The Enterprise Breakpoints window allows Users to visualize their organization on one screen. The "Crystal Ball" is an interactive, organizational depiction which allows for a better understanding of entity structure and allows Users to analyze complex networks of nested ownership structures within ATWeb. This function absolutely demonstrates Archway is the leading provider of Family Office software.

Journal Entry Delete - Users now have the ability to mass delete journal entries from the General Ledger.

May 04, 2009
* Considerations of a Cost Benefit Analysis

All system implementations require the investment of capital, time and resources. While managers often jump ahead to assess the overall the project budget, managers must also consider the hard and soft benefits that convincingly offset implementation costs.

The following sections outline key components of a ROI analysis. And according to Larry Melillo of KPMG's CFO Advisory Services, in order to create a balanced presentation, managers should also consider the useful life of the software, depreciation, cost of capital and quantification of risk.

Hard Benefits

Managers can complete a detailed ROI model that translates the software investment into short and long term savings. With a World Class solution, managers are capable of realizing the efficiency gains, time and efforts saved, controls and transparency now available.

Firm savings are often related to headcount, reduced errors and costs associated with finding and correcting errors in old systems
Improved information and analytics of current investments results in superior performance returns and ability to proactively evaluate new opportunities
Reduced audit fees as data is reconciled and readily available to query and report
Investor confidence and retention can be correlated to the new systems transparency and accounting controls directly resulting in steady AUM fees
The ASP model negates costs required to operate other disparate systems, software, hardware and associated processes and staff

Soft Benefits

Managers must consider the intangible benefits, namely better decision making, of implementing an enterprise application.

Spend less time compiling data and more time analyzing results and strategizing new opportunities
Simplify the back and middle-office and gain efficiencies by removing disparate systems, increase timeliness of reports and improved decision making
Improve turn-around time on investment valuations and periodic reporting
Increase satisfaction (and perception) for all stakeholders; including staff, investors and 3rd parties

April 20, 2009
*ATWeb 4.1.13 Release

Archway Technology is pleased to announce the following updates now available in the ATWeb Enterprise Edition:

Cash Management - The Cash Management Module is designed to facilitate the movement of cash to and from various entities and investors within ATWeb. Cash movements can be intra-company or intercompany. For those who utilize the Nested Entity Account setup, the Cash Management Module can automate the adjustments required to reflect changes in equity ownership in a nested account.

Banking Module -This Module will allow users to specify account and routing numbers for bank accounts that can then be tied to General Ledger accounts in ATWeb. Along with account information, users will also have the ability to tie Profiles to Banking setup in order to track primary and secondary contacts at the banking institution.

User Groups - User Groups may now be added under the Main Module. This addition to ATWeb is the foundation for role-based security.

Reports - The standard report list continues to grow thanks to your feedback!

Stay tuned for the next release in the coming weeks that is being considered a ‘major' release!

April 19, 2009

April 07, 2009
*Investment Advisors Simplify Portfolio Appraisals

Archway Technology Partners continues to develop relationships with independent Asset Managers and Investment Advisors. Archway's core offerings, technology and reconciliation services, provide Asset Managers with the tools they need to track, value and report investments and personal assets their clients maintain. In addition to providing the technology, ATWeb Portfolio Edition, Archway's Outsourcing team can complete regular services including Portfolio Accounting, Trade Reconciliation, Position Reconciliation, Cash Reconciliation and required Client Allocations. ATWeb's integration tool kit allows for automated updates of your portfolio into the application relieving managers of manual intensive processes. Your clients will appreciate web-based reporting capabilities which also enable you to spend more time focusing on generating returns instead of data collection and report creation.

April 01, 2009
*ATWeb 4.1.12 Release

Over the past weekend, Archway released several new features and reports now available in ATWeb. The following outline describes key features released:

Portfolio Accounting Module: Users now have the ability to maintain securities traded in multiple currencies within a single portfolio.

Dashboard Enhancements: New insert options are available for users to view Top Holders by Parent Profile.

Reporting: Several new portfolio and investor reports are available.

For more information, please reach out to your client service representative or the Archway Sales team.

March 19, 2009
*Enterprise Class Multi-Currency Functionality Extended in ATWeb

Archway is preparing for this weekend's release of version 4.1.12 of ATWeb. With this release, we are unveiling further extensions of our already market-leading multi-currency capability. Specifically, we are equipping the application to seamlessly handle the tracking, reporting and accounting for hyper-global operations, where the placement of assets in private capital vehicles share little in common with the reporting currencies of those operations.

Archway has been keen to recognize continuing significant shifts in the operations of its clients whereby asset diversification across currency and geographical boundaries is becoming more the norm, as compared with historical uses of currencies as diversification or hedging strategies. In order to ensure we are ahead of our client needs, we have decoupled investment and portfolio accounting from base or reporting currency of the operations required to report on those investments. This decoupling allows money managers to more easily accept inbound data represented in multiple currencies and to account for those investments with little to no additional effort as compared with reporting and accounting for single currency strategies.

Continued benefits of this decoupling also allow for more easily aggregated and attributed investments against target thresholds inclusive of shifting exchange rates. This allows the manager of the assets far better visibility into the composition of a dynamic portfolio across dynamic exchange rates to minimize portfolio risk and maintain consistency with stated and preferred portfolio compositions.

March 05, 2009
*Processing Call Statements, Distributions and Withdrawals in ATWeb

While ATWeb is fully capable of being an enterprise accounting system, there are a few creative ways to leverage the system specific to private capital markets. With integrated Accounts Payable and Accounts Receivable, clients can manage the typical monthly billing and check writing capabilities. Additionally, through recent enhancements, clients can also process capital movements through these same modules. The same scheduling tools can be leveraged along with the reporting capabilities allowing for check printing.

February 27, 2009
*Fund Administrators working through Reporting Changes

Given the economic climate, Fund Administrators are proactively looking for additional reporting ideas for the funds they service and the presentation of reporting to end investors. While more transparency is required, Administrators are carefully planning how to present data. As one example, standard reports that previously read "Ending Capital" may now have revised labels such as "Ending Capital Before Tentative Performance" or instead of "Performance Reallocation" now read "Tentative Performance Reallocation."

These additional disclaimers along with better defined report footers attempt to set better expectations of what the numbers consist of for fund managers and end investors. Administrators believe this approach should help manage expectations better and be ahead of the additional government regulations that will eventually come to pass.

February 12, 2009
*GAIM USA summary

The much hyped GAIM USA 2009 event recently took place at the Fontainebleau Resort in Miami Beach. Archway was privileged to once again be the platinum sponsor and host a tremendous cocktail reception for all conference participants and guests. The extended Archway team would like to thank the all attendees, speakers, guests, entire IIR staff for making it another great event.

The event included many great speakers, who suggested the following opinions:

The cost of gold will rise due to the worlds, notably China's, disbelief in the US dollar. In an effort to protect itself, the US could raise interest rates.
However, raising interest rates is very tough in an environment where unemployment is near 12-14 percent.
While there are positive strides being made in Iraq and encouraging signs in Iran, there are possible conflicts that exist with Mexico that should not be understated and are leading most to be bearish on Mexico.

February 03, 2009

January 30, 2009
*Expansion Brings Excitement to Archway

The Archway team is proud to announce office expansion is well underway in Indianapolis and New York. As a result of a growing client and employee base, increased space is much needed! In Indianapolis, Archway will expand in their current location on the top floor of the Keystone Crossing complex. In New York, the team is moving from its current location at 230 Park Avenue to now overlook the Bryant Park area. To celebrate the growth, Archway will be hosting welcoming receptions in both cities. The team is encouraged to continue realizing the same growth and sights are now set on San Francisco expansion in 2009.

January 15, 2009
*GAIM USA – around the corner!

From January 25-28^th, Archway is the Platinum Sponsor for GAIM USA 2009. This conference combines institutional investors, public pensions, endowments, foundations, family offices, hedge funds, private equity funds and industry experts. Do not miss the opportunity to network and gain industry insight from leading experts. Archway will be sponsoring the always popular Opening Night Cocktail Reception Monday evening at 6:15pm. For more information, visit our Events page. We look forward to seeing you there!

January 06, 2009
*Overview of Archway's Implementation process

With 2009 off to a fast start, we wanted to share insight into our implementation methodology. For new projects, Archway takes a very consultative approach towards implementations. For each engagement, Archway will work with client resources to complete a full project plan that includes resource expectations, final scope and document services related to data conversion, custom development, custom reporting, training and integrations.

Archway will lead the conversion effort with experienced resources familiar with Archway's Implementation Methodology (AIM). AIM combines comprehensive planning, design, development, testing, data conversion, rollout and support activities into a logical sequence that provides customers with a software solution that has been carefully implemented in the most efficient manner. AIM is completely scalable and relevant for a single company or a very large multi-company organization. We have developed functional and technical templates that enable clients to leverage and learn from similar implementations. Furthermore, before the conversion begins, a full work plan developed in MS Project will be provided and agreed upon. This methodical approach will ensure scope is accurately defined and expectations are met.

December 23, 2008
*Happy and Safe Holidays!

The Archway team would like to extend a warm wish for everyone to have a fun and safe holiday. Archway has achieved many goals set for 2008 and are charged to exceed your expectations in 2009. Look for exciting news and updates in early Q1!

December 04, 2008
*How are funds using technology to provide access to information?

Fund managers can provide a client portal allowing investors to run self-service reports on-demand. Archway Technology Partners ATWeb solution provides a client portal where the fund manager can control what reports investors can run and at what frequency there are available (monthly, quarterly, annually). The intent of ATWeb is to allow fund managers an added capability that will differentiate their fund from others. While performance returns are your responsibility, we provide you the back-bone of your operation and front office capabilities. Enabling the client portal and providing added transparency of capital movements, fund and portfolio performance and financial statements demonstrates sound operation and builds investor confidence.

November 25, 2008
*Happy Thanksgiving!

On this short week, the Archway team would like to extend acknowledgement of the Thanksgiving holiday and wish you all happy and safe travels.

November 17, 2008
*Interesting perspectives at Ernst and Young’s Hedge Fund Symposium

During a recent Ernst and Young Hedge Fund Symposium, industry leaders spoke on various topics affecting today's fund managers. A veteran panel list addressed numerous hot topics and below are a few interesting points gathered.

Amidst the continued bleak economic times, Fund managers looking to raise capital are honoring High water Marks of other funds if the investor joins their fund.
Fund Managers are beginning to utilize gates and suspensions to prevent redemptions more than ever before. The practice of such methods is to protect the fund but highly scrutinized as many partnership documents may not outline exact terms. The ongoing argument asks whether these methods are a kiss of death or is the fund manager carrying out their fiduciary responsibility.
More disclosure of fund assets are being required. The idea is to not steal the strategy away from the fund, rather provide insight into the risk levels of the fund including Leveraged ratios, # of days within a position and comingling practices.
While there are bold predictions that as many as 50% oHedge Funds will close by the end of 2009, many believe that the market will return in Q2 or Q3 of next year. The turnaround will likely lead with commitments from European investors seeking US based funds.

November 11, 2008
*Winter Internship Program

Archway Technology Partners is excited to announce that due to the success of the summer program, we are extending the internship program to the winter term. Archway is actively looking for talented individuals to join the Services and Support teams. Ideal candidates would be juniors and seniors that have demonstrated excellence in the classroom while being active in university clubs or community events. If you meet this criteria or know someone that might, please visit our Current Openings page.

November 07, 2008

October 30, 2008
*GAIM Fund of Fund

Earlier this week Archway Technology Partners had the opportunity to be the Executive Sponsor of the GAIM Fund of Hedge Funds conference in New York. In addition to great networking opportunities, the conference provided tremendous insight into the thoughts and strategies of some of the industry leaders. Among some of the thoughts the talented group shared were; many agreed the Hedge Fund industry would realize a drastic reduction in the number of Hedge Funds, perhaps as much as 25 or 50 percent. In large, the reduction will be a result of poor market performance and large redemption requests. Many leaders expect there to be a large increase in the number of mini-primes as prime brokers will be much more selective in the Funds they choose to work with. Experts also suggest an increase the Separately Managed Accounts. SMA's would allow an investor to participate in the strategy but not in the fund. New Fund managers see this as an opportunity to attract investors while having to prove their performance before taking the standard management and performance fees. The Archway team would like to thank the conference attendees, organizers and panel members for putting together an outstanding three day event.

October 15, 2008
*ATWeb 4.1.7 Release

This release presents Archway clients with new features available in ATWeb. As we continue a relentless focus to grow the application through your feedback, we are pleased to incorporate several updates that include the following enhancements:

Customer-Level Dashboard: User defined dashboards enable clients to customize the presentation of summary and detailed information. Furthermore, each dashboard provides drill through reporting for further analysis.

Report Favorites: With our growing list of standard reports available, Archway understands users have preferences on which reports they want to launch quickly. Report favorites are logged for each users preference and even available to launch from the dashboard.

User Account Security UI and Roll-Out: Good stuff but we can give too many details!

Investor Login Changes: Managers have even more controls on the type of information that is released to their investors. Each data element can be controlled to fit manager preferences.

Archway's goals is to continue designing and delivering applications that provide managers, executives and operational staff with industry leading tools to help support and grow their business.

October 02, 2008
*Recent observations of the Investment Community

After several discussions with clients and prospects, attending conferences and a turbulent month of September, the following points are a few observations about the marketplace:

Many sizable hedge funds are forced to close because of the fall of Lehman Brothers and unfortunately, there isn't a clear distinction as to when fund managers may be able to recoup assets tied up
With the exception of start-up funds, hedge fund expenses are expected to be flat for the next year. Most of the spending will be on front-end ‘revenue generating' opportunities
With tighter transparency and controls coming, using a Fund Administrator is even more attractive for Investor and Manager confidence. There is a popular notion that "Administration / Outsourced Accounting" provides another level of checks and balances" necessary today
Treasury is a BIG key and very scarce for funds (raising capital, bank lending)
Due to onshore and offshore Tax considerations "Mini-Master Feeder" structures are becoming popular

Additionally, tighter controls and more transparency for investors and regulatory arms will likely push all private investment groups to move toward implementing applications with enforced accounting controls providing more insight into the health of the organization and sometimes position summaries. If you are interested in getting ahead of the curve with an integrated accounting and administration solution, please complete the Information Request Form to the left of the page.

September 23, 2008
*FRA Hedge Fund Business Operations

Later this week, Archway Technology Partners will sponsor and participate in the 3^rd Annual Meeting of the Hedge Fund Business Operations Association at the Helmsley Hotel in New York City. The FRA team has proactively revised the conference agenda to address the recent activity in the market and industry. Sample sessions include:

Regulatory Trends and Enforcement Update
Counterparty Risk Issues: Lessons Learned From The Recent Credit/Liquidity Crisis
From Start-Ups To Established Funds: Building and Maintaining An Infrastructure To Support Fund Operations
The Next Generation Hedge Fund: Supporting The Infrastructure Of The Multi-Strategy/Product Funds
Hedge Fund Accounting and Tax Review
What Hedge Funds Will Look Like In 2009

If you will attend, please stop by our booth for a more formal introduction and nice give-a ways! Otherwise, we are happy to provide follow up details to anyone interested.

September 18, 2008
*College Recruiting important to Archway’s growth

With the new academic year underway, Archway has had the opportunity to participate in several Career fairs this month. College graduates and experienced hires are vitally important to Archway's growth plans. While most of the recruiting efforts target candidates with Finance, Accounting and Programming backgrounds, we are always interested in evaluating Marketing candidates. If you are interested in opportunities with Archway Technology, please visit our Careers page. Come join a dynamic team with endless opportunities.

Archway Technology Partners is a global software company supporting the operations of private investment companies such as Hedge Funds, Fund of Funds, Family Offices, Multi-Family Offices, Fund Administrators and Real Estate Funds.

September 12, 2008

September 10, 2008
*Archway Services Overview

In addition to product sales and application support, Archway also offers clients a variety of technology-based services. Archway brings to the table many years of technology consulting experience from both inside the investment partnership community and beyond. Listed below are the services offered by Archway.

Implementation Support & Training - Archway provides services in the implementation and support of the ATWeb products. From installation and data conversion to end-user training, Archway uses time-tested methodologies to help ensure a successful implementation of the ATWeb technology platform. The implementation methodology is suitable for Family Offices, Hedge Funds, Fund of Funds, Private Equity, Real Estate groups.
System Integration - Archway's products have been designed and developed with an open framework in anticipation of clients requiring integrations with other external systems. This design decision means that Archway can quickly and efficiently design a customized solution and develop the integrations necessary to integrate two or more independent software products. ATWeb currently integrates with numerous brokerages and order management systems (OMSs) as sources for inbound data. Furthermore, Archway offers to its clients a direct IDC feed to support corporate action and security pricing uploads.
Custom Development & Report Writing - Archway's development architecture allows for custom functions and reports to be built directly into the product and made available only to certain clients. In addition to custom development, Archway embraces the concept of co-development, whereby clients pay for the initial development of system functionality. Afterwards, Archway accepts the continued development and upkeep of the functions in return for the rights to include the functionality in the base product.
Operations Outsourcing - With an organizational focus on client service, Archway is committed to helping clients gain more bandwidth from their technology investment. The Operations Outsourcing program allows Archway staff to manage a client's back-office needs through the ATWeb platform on daily, weekly, monthly or quarterly cycles. A set of Service Level Agreements are established with each client participating in the program which define processing timelines and system output a client can expect for each accounting cycle. Archway's Outsourcing is designed to allow clients to reap the benefits of Archway products while relieving clients of the obligations associated with operating an enterprise-class application.

August 26, 2008
*Archway’s Legacy application, ATPartnership, officially retired

Despite the fact the company was launched and sustained on the success of the ATPartnership platform, Archway has recently retired the application and has successfully migrated all legacy clients to the ATWeb platform. Today, Archway markets a single product, ATWeb, and a host of services designed to enhance a client's investment in ATWeb. In addition to standard deployment services, Archway also offers additional value added services to help clients extract additional value from their technology investment.

While retiring ATPartnership could have been initially perceived as a limiting move, Archway has maintained significant focus on evolving the flagship product, ATWeb, for use in multiple markets rather than releasing different products for each of the markets we serve. This decision results in significant efficiencies in code reuse and reduced maintenance, even if it does require advanced design to allow the integration of new capabilities into a large, mature application without introducing undue burden on the user community.

Today, our ATWeb platform has demonstrated direct application and success in several investment markets: Hedge Funds, Family Offices, Private Equity, Real Estate, Investement Advisors and Administrators.

August 14, 2008
*Hedge Fund Strategy Composition: 2008 vs 1990

According to a recent study by Hedge Fund Research, the composition percentage of Hedge Fund strategies in Q2 2008 was Equity 34.92, Relative Value 24.54, Event-Driven 23.9 and Macro 16.64 percent. This differs from the 1990 composition percentage of Equity 37.07, Macro 39.3, Relative Value 13.88 and Event-Driven of 9.75.

It is likely the sharp increase in the Event-Driven category relates to the distressed restructuring / debt and Credit Arbitrage strategies employed today. Additionally, Relative Value increases are likely attributed to an uncertain economy and investors seeking steady returns through Fixed Income portfolios.

August 06, 2008
*ATWeb 4.1.5 Released

Last week the Archway team released significant enhancements to the ATWeb platform. ATWeb v4.1.5 is labeled as the first major release within the past several months. While our client base has received formal communication and training as needed, we feel it is our obligation to highlight a few enhancements to our regular readers, prospects and partners. A subset of the enhancements include the following:

Investor Login - The Investor Login has a redesigned user interface including more graphical and charting options. Additionally, all fund documents including Subscription Agreements, Management Letters, Valuation Sheets, Broker Statements and other Fund Performance documentation can now be viewed and launched on a single screen.

Batch Processing Scheduler - New tools are available through a Customer Processing Module designed to allow organizations with large numbers of legal entities to efficiently use the ATWeb system. The Customer Processing Module allows users to import data across the books of all of their system entities, automate the time consuming tasks associated with data reconciliation, facilitate multi-source reconciliation and schedule batch posting and period closing functions.

Reporting - Several new Partnership, Portfolio, Financial and Investor related reports were released. These reports can now be exported directly to MS Excel at runtime, in addition to .pdf and email.

July 30, 2008
*Upcoming Conference Discounts

Archway will be a key sponsor for the 6^th Annual Hedge Fund Business Operations Forum on September 26^th and the GAIM Fund of Funds event on October 27^th. As part of our sponsorship, we are excited to extend discounts to our friends!

If you are interested in learning more about Hedge Fund Accounting, Portfolio Accounting and Reporting and Operational Best Practices, this could be a great opportunity to hear first hand from industry leaders. To secure your reservation, contact us today using the form to the left of the screen or our main line at (212) 904-0279. We look forward to seeing you there!

July 17, 2008

July 16, 2008
*ATWeb 4.1.4 Release

The Archway team is excited to announce a few updates to the ATWeb platform. Within the past few weeks, ATWeb v4.1.4 was released with several enhancements that provide utilities to help convert historical data more quickly into ATWeb from other sources and enables better processing of Capital Account Transfers.

These enhancements will provide our implementation team with more tools to convert prior period information, including fund accounting and partnership accounting entries. Additionally, another feature has been added to ATWeb to allow for an efficient method by which to transfer capital from one equity account to another.

Please look for upcoming correspondence that includes information about an upcoming 'major' release!

July 09, 2008
*Hedge Fund Software Quantitative Study

Archway Technology Partners conducted a study where they operated a representative hedge fund for 12 months in the ATWeb accounting platform. ATWeb was used in this capacity as it supports, in an integrated fashion, the business functions described in this paper. As such, it presents a logical foundation upon which to understand the interrelationships of hedge fund operations.

The goal of the study was to generate a data set that could then be evaluated to quantifiably characterize the back office of hedge fund operations.

After the sample fund was operated for 12 months, every transaction created in the system, either manually by users or automatically by the system, was assigned to one of the four primary business functions: Portfolio Accounting, Partnership Accounting, Investor Accounting and Investor Relations.

The raw data presents a striking result whereby less than 19 percent of all system transactions were attributable to the Portfolio Accounting function. Understanding most hedge fund operations focus exclusively on portfolio management and the natural byproduct of portfolio management being portfolio accounting, far less than one quarter of the data required to characterize a well controlled hedge fund operation would be generated.

Furthermore, over 75 percent of the transaction data is directly attributable to Partnership Accounting and Investor Accounting; the two functions most hedge fund operations understand the least. Additional data is certainly not required to demonstrate very clearly why most hedge fund operations are still in disarray and, most alarming, not even recognized as being in disarray by those responsible for maintaining order.

The results above would lead any reader to naturally draw the conclusion that hedge fund managers should focus on Investor Accounting and by doing so would add tremendous control to their operations. Although the numbers would indicate this perspective to be true, many business processes within a hedge fund's operations actually span multiple, if not all, of the four major functions outlined earlier.

To help characterize this relationship between the four major operational functions, Archway went to an additional level of detail in the study by decomposing a hedge fund operation into the major business processes conducted. Business processes are those tasks that need to be performed by a hedge fund management organization, as compared to the four business functions which are classes of responsibility of the hedge fund as a whole.

Although a generalization, the ten business processes below were selected to characterize a hedge fund operation.

Accounts Payable
Accounts Receivable
Asset Management
Financial Statements
Investor Allocations
Management and Incentive Fees
Withdrawal Processing
Contribution Processing
Investor Statements
Tax Returns

Again, every transaction created in the system, either manually by users or automatically by the system, was assigned to one of the ten business processes described above.

Although interesting that the Investor Allocations process accounts for more than 64% oe total transactions in the system, these numbers alone still do not address how the ten business processes actually participate in satisfying each of the four business functions we began with.

The first conclusion that can be drawn from the table above is that several mission critical processes span multiple functional silos, demonstrating the importance of addressing a full back office operation when evaluating the controls of any hedge fund.

The second, and arguably most important element of the study, is that in order to truly perform the Investor Allocation process, which accounted for more than 64 percent of the transactions included in the study, a hedge fund operation must address all components of back office management including Portfolio Accounting, Partnership Accounting and Investor Accounting.

The cross-functional nature of business processes found in hedge fund operations is the result of the dependence of processes such as Investor Allocations on data generated and required to maintain true Portfolio Accounting. Investor Allocations is but one example of this type of cross-functional process found in hedge fund accounting operations.

For a complete review of this study, request a copy from Drew Alexander at dalexander@archwaytechnology.net.

July 02, 2008
*Hedge Fund Operations

The back office of a hedge fund operation can be generalized into four primary aggregations of business function: Portfolio Accounting, Partnership Accounting, Investor Accounting and Investor Relations.

Not surprisingly, a significant component of a hedge fund's back office will be driven by the activity found in the management of the portfolio. This should not be confused with the activities associated with investment and evaluation; rather, it is the financial implications of the decisions and executions that are conducted. Portfolio Accounting is easily described as understanding the character of profit and loss generated by a fund's portfolio (e.g. unrealized gains, short term gains, long term gains, etc.).

Raw portfolio profit figures are virtually useless when trying to manage the taxable implications of profit, which can have a tremendous effect on the net resultant profit an investor enjoys.

Beyond Portfolio Accounting, management focus gets blurry if the eyes are even open at all. If General Motors owned its dealerships, General Motors would not report to the street profitability of the dealerships. Nor should hedge funds assume that the financial character of returns generated by the portfolio alone be construed as partnership accounting.

Partnership accounting is "the rest of the picture" in truly understanding a hedge fund's balance sheet and periodic income statements. Although the portfolio is a significant contributing factor to these financial statements, there are several other influences in the true financial complexion of a hedge fund. Most hedge funds maintain bank accounts and relationships with other service providers that will generate additional fund profit or expense, including the impact of various accruals. All of this information is required to truly present a consolidated set of financials that describe the performance and health of a hedge fund's operations.

Moving down the line, the next level of detail is at the investor level. Ultimately, a hedge fund is operated under partnership accounting guidelines, which means that the financials produced by the fund are truly the property of an underlying set of investors. All income or loss must be translated into the effect that the income or loss has on each individual investor. Furthermore, mechanisms must be in place to ensure that the income carries the appropriate taxable nature as the hedge fund industry has available to it many methods of accounting for gain character at the investor level. Also included in this function is understanding the effect of management and incentive fees, both of which are traditionally calculated at the investor-level for US hedge funds. These fees can also have an effect on how the character of income or loss at the investor level is described.

Lastly, not only are hedge funds required to maintain detailed records for very complicated functions of portfolio, partnership and investor accounting, they are also responsible for reporting on a routine basis to their investors the performance of investor capital. This function is more than just reporting. Since hedge funds are restricted from most forms of marketing, most capital is raised either directly or indirectly through existing investors. This means that keeping investors satisfied is imperative to the future ability of the fund to raise capital.

It is challenging to describe hedge fund operations in merely a series of paragraphs under four main headings. But even within the paragraphs above, it is easy to begin understanding the true complexities of hedge fund operations. These are the same operational characteristics that are often overlooked as they require an understanding of partnership accounting, not portfolio management, to truly articulate.

The hedge fund industry has not yet matured to the point where it is garnering attention from independent evaluation sources such as Gartner Group. As such, it is has until now been difficult to speak quantitatively as to where the most attention should be focused when applying controls in hedge fund operations.

June 30, 2008

June 23, 2008
*Obstacles to a Hedge Fund's growth

This week we'll continue on from last week's blog and discuss the ‘Obstacles to a Hedge Fund's Growth.' The truth is that a business of any size can be built on a solid set of controls. Back to the original question - why are there so few controls found in US hedge fund operations? There are two driving factors why US hedge funds lack internal controls and formal operations.

First, hedge funds are traditionally operated with two sources of income: the management fee and the incentive fee. The management fee is intended to cover operating expenses, salaries, rent, etc. The incentive fee is the reward for generating profits for the investors, usually characterized in terms of excess over a predefined and representative rate of market returns.

Because the expenses required to operate a hedge fund are much lower in total and simpler in nature than more traditional businesses, there is a very clear correlation of every dollar of expense as related to every dollar that goes into management coffers. After all, there is no return of the management fee for expense dollars not spent. It is all considered excess and remains property of the management company.

Long story short, fund management will feel a very direct impact of expenses associated with running the business and will usually elect to only invest in the operations of the business to the extent those investments will be seen by prospective investors and result in additional contributions.

The second driving factor tends to be the management company employees themselves. Hedge funds employ many of the brightest investment minds in the world. These minds are often steeped in rich history from Wall Street and have had exposure to the most creative and rewarding investment strategies. This is a very different set of experiences than those who cut their teeth in large audit and accounting firms. Unfortunately, to truly understand business operations and controls, the latter of experiences are far more valuable than the former.

Very often hedge funds open with the brightest of investment talent and virtually no understanding of business operations.

Because many hedge funds launch without any practical, or unpractical, experience operating businesses, the operations and controls are either given little thought, if any at all. All "operational" focus is targeted at ensuring the appropriate systems are in place to allow investment evaluation and decision execution. Most management considers this to be good focus on "back office" controls as it usually involves implementation of technology and process.

Unfortunately, as expressed in true day-to-day hedge fund operations, these functions are still part of the "front office", or revenue-generating activities.

If investment evaluation and execution systems and processes are not truly back office functions, then what does back office mean?

June 11, 2008
*Considerations of Hedge Fund Growth

With the exception of perhaps the largest hedge fund operations, most hedge fund managers would agree that loosening restrictions on investor qualifications would greatly enhance their ability to build long-term, thriving businesses. For many managers, it is not simply the ability to structure a well thought-out product and generate agreeable returns; it is the restriction on marketing that is the most significant obstacle to the growth of their businesses.

As has been said here and elsewhere ad nauseam, the US hedge fund industry is most notably characterized by a handful of very significant meltdowns and scandals. This has left the general public with a very negative perception of an industry that is privy to private information and is only in existence to help the rich get richer. This perception is more targeted towards the intention of those operating hedge funds than a quantitative and objective review of the industry.

The authors of this study maintain deep relationships with many across hedge funds small and large and those with operating strategies both simple and complex. It is very apparent most of these operations strive to maintain well controlled businesses with the genuine best interest of their investors at heart.

Despite the best of interests and intentions of an industry, the truth is that many hedge fund operations remain loosely controlled environments that lack even the semblance of operational control. This is alarming when considering that many hedge funds carry higher market values than a sampling of Fortune 500 companies. Expressed as a hard truth, many of those in the US hedge fund industry operate more like investment clubs than real businesses.

It is important, however, to understand why hedge funds are not being operated with the care required. After all, if hedge funds want access to capital and they want to operate like well controlled businesses, why are they being operated with so few controls?

Would General Motors build a new car without being able to market it on a broad basis? This is exactly what most hedge fund managers are asked to do: build a business with limited access to customers. This constraint forces the hedge fund manager to make economic decisions on where to focus attention in building his or her business. Attention is first placed on attracting capital, then generating returns to maintain a customer base, and so-on. This argument is what most would like to present as a good reason more control is not applied in hedge fund operations. Truth be told, it is not accurate.

The argument above is a redirection of responsibility that allows a hedge fund to operate with loose controls in a "justifiable" manner. After all, if I can't market, how can I generate the foundation of a business to implement the required controls?

June 05, 2008
*New staff joins Archway team

We are excited to begin new staff orientation again this week. These are exciting times at Archway and we have recruited and selected a new class to join Archway's Services and Support teams. This team is comprised of recent graduates and experienced hires. Archway is very pleased to have this talented group come aboard.

Although there will be learning curves and fun challenges ahead, our professional development creed is to provide professional growth while facilitating work-life balance. "I decided to join the Archway team because of the unique opportunity to start a career related to accounting/ finance in the technology industry. Archway Technology Partners is filled with very knowledgeable, helpful, friendly people who I know I will learn a great deal from. They strive for excellence in what they do and are committed to helping me strive for that same level of achievement." says new hire Laura Enos-Shepard. This group will complete Archway's CORE training program will be deployed to help you accomplish your organizational goals soon!

May 29, 2008

May 28, 2008
*Conference and Forum circuit

First, we hope you all enjoyed the holiday weekend! And we're excited summer is around the corner which includes a busy conference circuit. Last week was a great opportunity to participate in a few conferences and stay in front of the private investment industry's hot topics and trends. The two events we were invited to attend were the IPI Spring Conference for Private Investors (particularly Family Offices) and the Hedge Fund Accounting and Administration and Tax Master Class.

The events were educational and always provide great networking opportunities. It was also nice to see a few ATWeb clients in attendance! In the coming weeks we will continue speaking at events and sponsoring sessions. Next on the agenda is the Family Office Metrics conference in San Francisco, June 9^th and 10^th. We will present a case study of how Single Family Office and Multi-Family Offices have success using our comprehensive middle and back office accounting software, ATWeb.

If you or an associate might be attending an upcoming conference or seminar, let us know as we are happy to send a presentation in advance and sometimes can extend participant discounts.

May 21, 2008
*New ATWeb Developments

The development team here at Archway has been particularly busy, working to make the ATWeb platform an even better solution for any hedge fund, family office or private investment company. As a result of valuable user feedback and Archway's proactive development approach, many great enhancements to the system are currently in the works. Some of the initiatives currently being worked on by the development team include:

Development of a new reporting platform and infrastructure
A multitude of new performance reports
Increased investor relationship management features and access to investor information for Fund managers
System optimization - while solid, it can always make it better!

Archway is committed to developing new and innovative solutions to complement our Fund Accounting and Administration software. Stay tuned for many more enhancements in the weeks to come.

May 14, 2008
*Introduction of Hedge Fund strategies

In a general sense, Hedge Funds are private investment pools for qualified investors. Hedge Fund managers will often charge a management and performance fee of 2 and 20 percent of assets under management. Hedge Funds can have very diverse investment strategies and we'll outline a few below.

The first is global macro investments where investors try to anticipate which direction the global macroeconomic market will move. The second type of investing is directional, which includes such subcategories as long/short equity, emerging markets, and short bias. Event-driven investing is when an individual takes advantage of pricing inefficiencies that are results of specific corporate events. The last type of investing is relative value. One of the most common types of investing in a bearish market is "short selling." This is when a manager will sell securities they do not own and will then try to repurchase them later at a lower price. During a bullish market, a common practice is purchasing a security when the price is low with the hopes that the price of the security will quickly rise.

The value of Hedge Fund software, ATWeb, is to view your portfolio of investments, update pricing, perform fee allocations, complete partnership accounting and fund accounting, track suspected wash sales, and produce consolidated performance reports. Document Management can be used to store broker statements and subscription agreements online. In addition, ATWeb will cleanly manage virtually every investment vehicle.

May 05, 2008
*Learn the Archway history

In the late 1990s the founders of Archway undertook an initiative much like the one every one of our customers has undertaken. We attempted to launch a hedge fund management organization. Through that experience we recognized a significant void in the market: a robust accounting system made available to the little guy.

As backgrounds go, we all hailed from (former) Big 6 accounting firms and recognized that most technology solutions available for financial management of capital pools pre-2000 were erroneously focused exclusively on portfolio accounting. Although an integral component of a fund's financial makeup, we immediately recognized something was missing. The General Ledger.

We set out to not only fill the void in the market, but to also build a true GL-based accrual accounting system. What resulted is the only true GL-based accounting system available to, and geared for, private equity firms of all varieties.

We have now served this industry for nearly 10 years and have deep customer bases spanning hedge funds, family offices, real estate and venture capital firms both domestic and abroad. As evidence of our belief in what we do, Archway runs on the ATWeb accounting platform.

We have a very firm belief that great technology is not great if it can't be implemented. This is apparent in our relentless commitment to customer success and satisfaction.

Most importantly, we understand the challenges you face as we have sat in your seat.

This industry is exciting in that it constantly changes and has a tremendous amount of growth potential on a domestic and international scale. We are elated to participate in this industry and are looking forward to being an integral part of the private equity community for many years to come.

Enjoy the information on our website and we look forward to speaking with you in the near future.

April 28, 2008

April 26, 2008
*Archway launches updated website

Our team is proud to announce we have updated our company website. By adding new information, revised navigation and industry specific content, the new website should provide for a more friendly end-user experience. And like ATWeb has evolved through your feedback, we appreciate your comments on helping make the website better!

A few updates include:

Interactive Approach - The web pages are deployed with the intent to be interactive and more user-friendly. Highlights include more of an industry focus that shares a story board of pain points and how our technology and services could be a solution. Check out the Industry links to the right of the home page!
Management Blog - Archway leadership will provide perspective on Industry hot-topics and news that effect our customers, prospects and employees. Insight about the solutions being developed and upcoming releases will also be shared.
Downloadable Materials - Whitepapers, Brochures and Solution Sheets are available to provide targeted information by industry and solution. Visitors will now have more tailored information available further describing our offerings and findings in the Industry.

We hope you enjoy the new site. Be sure to stop by and review the management blog and latest press releases!

April 23, 2008

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