Altus

Unit pricing for funds is subject to a daunting combination of tight deadlines, complex processes and the potential for extremely costly mistakes.

Errors in unit prices can be very expensive. Compensation levels depend on the margin of error and the volume of trades but costs in excess of $10M from a single error have been known. The risk is exacerbated by increasing complexity in the form of multi-national assets, intra day valuation points and ever more exotic asset types and fund structures.

At each fund valuation point the administrator must capture and validate external asset prices, calculate the NAV for the fund, and calculate, validate and distribute the unit price. This multi-stage process will often straddle multiple departments each with their own processes and systems (and invariably relying on poorly controlled end user computing such as spreadsheets). In this environment it is difficult to maintain consistent levels of control and visibility over the whole process.

The challenge of automating a complex process in a controlled manner is familiar territory to Altus. We have focussed our attention on the validation of prices using a range of checks against a variety of data sources and handling any exceptions in a systematic and auditable manner. Our goal is to help fund administrators take control of the whole process and begin to reduce the associated risks.