As hedge fund technologies grow in depth and breadth, fund managers continue to search for the best technologies to support the structure of their firm.  A Portfolio Management System (“PMS”) is a valuable tool that managers are implementing in increasing numbers—with automated features and complex capabilities, it takes care of middle-office functions so managers can focus on what they do best.  However, it is essential that managers do their research before committing to a particular provider.  Andrew Quan, a Senior Manager at FinServ Consulting, and Kunal Mehta, a Manager at FinServ, offer five tips for what manager should seek in a portfolio management system below.

1)    Capability to Support Risk Measures from a Market Data and Internal Perspective

The ideal portfolio management system should include the ability to support risk measures in terms of market data as well as proprietary risk calculations, supporting the activities of the fund from all angles. “FinServ’s product development life cycle (PDLC) encompasses techniques to ensure that the appropriate business requirements are identified in a well-organized manner to secure the client’s success,” explained Quan.  FinServ has the business and technical expertise to ensure the development portion is handled appropriately, so the person implementing the system is well-advised about how they would like their system implemented.

2)     Capability to Streamline Reconciliations with the Third Party Administrator

“The third party administrator needs to be involved throughout the PMS implementation process, as their backing will be critical in the system’s ability to go live,” stated Quan.  By having the ability to engage the third party administrator early on, a fund manager is setting its PMS implementation up for success, as the system can be rigorously tested to tackle many scenarios.  A strong relationship between the third party administrator and the portfolio management system is critical to the overall success of any portfolio management system implementation.

3)    Capability to Enhance Internal Controls

“Within this implementation project, you need someone who understands how to leverage systems workflow and user entitlements, and link that to what the business user really needs to support his business, to come up with the best processes for the fund,” said Mehta.  Thus, it is important that the PMS is optimally configured to enhance the controls that the business needs.

4)     Capability to Adhere to Reporting Requirements

When introducing a new PMS system to a fund manager, there is no room for assumptions.  “A manager can’t assume that calculations are uniform from one system to another.  They also can’t assume that all calculations abide by the same formulas, as two systems can have two completely different definitions of market value,” said Quan.  When deciding what system to implement, managers need to look closely at what data is important to them and how they will migrate this data from the old system to whatever new system they choose.  The seamless transition of both current and historical data from one system to another is vital to the smooth operation of the new system.

5)    Capability to Integrate with Market Data Providers

“Partnering with a reputable market data provider is a necessity for any PMS system provider.  The two work together to provide the client with real-time analytics,” added Mehta.  Despite their interwoven nature, fund managers still need to conduct comprehensive research on associated market data providers to ensure they possess the functionality to work with their chosen PMS system.

These are some of our observations made during recent portfolio management system implementations. If you have any additional questions or comments about FinServ’s PMS implementation project capabilities, please feel free to contact Andrew Quan at or Kunal Mehta at

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