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Liquid Holdings

Part 2: A Fund Manager's View on Working Closer with Investors

  • Monday, March 9, 2015
  • Source: Liquid Holdings Group, Inc.
Part 2: A Fund Manager's View on Working Closer with Investors

"At the end of 2014, there was speculation that some unhealthy combination of pension fund withdrawals, lackluster performance, regulatory burdens or the advance of liquid alternatives had finally done in the hedge fund sector. Fast forward to early in 2015, data shows allocations to hedge funds have climbed to levels not seen before the economic crisis. Outflows are also on the decline. Meanwhile, some experts suggest that the pipeline for new fund launches is more active than it has been in several years.."
- Forbes Insights

 
Last week, we published part one of ‘A Fund Manager's View on Working Closer with Investors'-- a series of blogs that explores how heads of portfolio management and investor relations are using LiquidMobileSM to communicate performance and risk stats to their clients.

This week, we turn our attention to a CIO launching a hedge fund in the second quarter of this year. He made the decision to start the fund after spending eleven years as a portfolio manager at a multi-billion dollar hedge fund. Today, LiquidMobileSM is his capital raising tool—used to showcase how his strategy, set up as a theoretical portfolio with full transactions details dating back to August 2013, has performed over the past 20 months and will continue to perform on a day-to-day basis.  Below we’ve highlighted three dashboards/reports that are used meetings with potential investors to verify strategy and demonstrate institutional controls:

Fund Overview

This is the primary view of performance and risk across all holdings in the portfolio, from the 'as-of’ date specified by the CIO:
  • NAV of the fund sliced-and-diced to show ‘contribution to NAV’ by instrument type
  • Monthly performance of the fund compared to three benchmarks including MSCI World Index
  • Month, quarter and year-to-date P&L, broken down by realized and unrealized P&L
  • Portfolio exposure calculated on both a gross and net asset basis
This dashboard can be configured, based on the investor’s needs,  to show additional risk analytics such as Sharpe Ration, VaR and stress tests.  The dashboard can also be run ‘as-of-today’ to show how transactions executed today impact the portfolio as the transactions are confirmed in Liquid’s order and execution management system.

 

 

Performance Attribution by Sector

This report breaks down the fund’s performance and contribution to NAV by sector.  The sectors were defined by the CIO to give better insight into performance, with each sector in turn displaying performance and percent contribution to NAV down to the security-level.  This allows the CIO to clearly communicate the sectors and positions that have contributed to or detracted from the fund’s overall performance over different time horizons.
 
 
 
 

Scenario Analysis

This report is used to illustrate his control of the portfolio during foreseen and unforeseen market conditions-- stress testing capabilities in LiquidMobile determine how the portfolio would perform in a hypothetical scenario including an extreme event such as the Asian Crisis, Black Monday, the Gulf War of 1990, or other events as defined by the CIO. The report also models the portfolio's reaction to changes or shocks in external factors, such as a percentage change in an index or exchange rate, or price-drop in oil.  Based on discussions with potential investors, the CIO can determine whether the stress tests are run over a one, five or ten day interval.

 
 


Our solutions consultants are here to walk you through these views as well as other dashboards and reports used by our clients for more impactful conversations with existing and potential investors. 

For a free trial of the application, contact us today.

About LiquidMobileSM

LiquidMobileSM is a web-based app that allows hedge funds and other asset managers to monitor portfolio and risk analysis and reporting across multiple portfolios on a mobile device in real-time, all the time, everywhere.  The app is engineered for fluidity from the desktop to any mobile device, giving fund managers the ability to easily interact with historical, real-time, and forward-looking P&L, performance, market and liquidity risk, and NAV-light calculations. With mobile-optimized dashboards and reports to monitor investments and investor relationships on the go, LiquidMobileSM represents a major step forward for the hedge fund industry, which today faces rising pressures across transparency, regulations and operating costs.
 



 

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