The bottom Line 3

The Bottom Line The fund data & document magazine by KNEIP #3

Fund reporting technology: Trends 2014 Steven Sorgeloos Head of Operations, Reporting Solutions at KNEIP

Table of Contents EDITORIAL 3 SOCIAL MEDIA 4 5 Reasons to engage

By Troy bankhead - KNEIP

DATA & TRUST MANAGEMENT

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The Fund Industry is a Network

By: Samuel Gilstrap, CEO, AssetLogic S.à r.l.

Ben Cahoon, President, AssetLogic S.à r.l.

REPORTING TRENDS

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Fund Reporting technology in 2014 Interview with Steven Sorgeloos - KNEIP

AIFMD ANNEXE IV REPORTING 12 Implementing Pandora’s Box

By Mario Mantrisi - KNEIP

WHEN BRUSH MEETS BUSINESS 14 A Conversation between Fifax – Artist and Jon Griffin – JP Morgan Asset Management

TRANSACTION AUTOMATION The Fax is Dead. Long Live the Hub!

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By Yvonne Hurst - Calastone

SHADOW BANKING & AIFMD

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Interview with André Prüm – University of Luxembourg

GENDER IN BUSINESS

A Look at Balance in the Workplace

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Painting by Fifax

Interview with Marie-Jeanne Chèvremont – MJC Consulting

TOOLBOX 22 Form PF vs AIFMD

The fund data & document magazine by KNEIP Chief Editorial Officer: Bob Kneip Editorial staff: Troy Bankhead, Yvonne Goucher, Renuad Oury, Mario Mantrisi, Samuel Gilstrap, Ben Cahoon, Steven Sorgeloos, Jon Griffin, Fifax, Yvonne Hurst, Andre Prum, Marie-Jeanne Chevremont Conception & coordination: 360Crossmedia Artistic Director: Tom Norest Cover photo: 360Crossmedia/C.O / painting by Fifax Print run: 500 copies Date: March 2014

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EDITORIAL

Dear FRIENDS, Welcome to the 3rd edition of The Bottom Line.

At a time where the introduction of additional crisis averting regulatory measures are at their height, asset managers strive to maintain balance between investing in compliance and championing product innovation, while at the same time optimising processes. In this delicate balancing act, the mastering of data and document management must become strategic.

In a challenging environment such as today’s, it is imperative that any organisiation involved in delivering data—whether it be their own data, or that of a third party—to relevant competent authorities and regulators must invest both time and financial resources on the gathering, analysing, formatting, and filing of that data in an effort to remain compliant. Results of a survey of 200

hedge fund managers showed that on average, the industry spent more than 7% of it’s total operating costs on compliance projects. In light of this, it seems that message is getting through.

Regulation is a key pillar of our industry, which should be respected for the confidence and trust it brings. With that in mind, this edition of The Bottom Line will focus on data management, STP, and improving efficiencies, all of which allow you to concentrate on what makes a real difference: managing risk and return, while delivering top-notch client service.

Here’s wishing you an enjoyable read.

Renaud Oury CSO, KNEIP

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SOCIAL MEDIA

By Troy bankhead – KNEIP

5 reasons to Engage With 60% of asset management firms today engaging with the social media community, and 77% of those being the largest firms, this trend is already a reality in the asset management industry.

1: Listen to your stakeholders

3: Build your credibility

2: Stake your presence

4: Compliance

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Š 360Crossmedia/L.D

5: It’s where you need to be

You might not feel the need to engage in social media yet, but the data suggests that you will be better off if you do.

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DATA & TRUST MANAGEMENT By: Samuel Gilstrap, CEO, AssetLogic S.à r.l.

Ben Cahoon, President, AssetLogic S.à r.l.

The Investment Fund Industry iS

a Network

The investment fund industry is good at exchanging money, but bad at exchanging information. The primary reason IT struggles to exchange information is because its core technologies are built in direct opposition to how it actually operates. Its technologies are built as silos, but the industry operates as a network.

If we learned anything during the recent financial crisis, it is that world is much more connected than we had realised

The industry needs an investment data network

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The investment fund industry doesn’t operate in silos, but resembles a network. It needs a data & document infrastructure that reflects this.

Š 360Crossmedia/C.O

REPORTING TRENDS

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Fund reporting technology:

Š 360Crossmedia/C.O

Trends 2014

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REPORTING TRENDS Interview with Steven Sorgeloos – KNEIP

Does increased regulation impact asset managers’ competitiveness?

How is reporting affected by the added complexity of today’s regulation?

What trends are changing the fund reporting space?

As reporting increases in complexity, the use of production solutions has to increase in simplicity.

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Š 360Crossmedia/C.O

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AIFMD ANNEXE IV REPORTING

By Mario Mantrisi - KNEIP

Implementing Pandora’s Box Given that many AIFMs have applied for their licence, unsurprisingly the industry is shifting its efforts towards the practical implementation of the directive, with Annexe IV Regulatory reporting currently one of the hottest topics for those AIFMs.

AIFMD Annexe IV reporting reveals a plethora of hidden challenges to understand, gather, and calculate the required data.

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When brush meets Business A Conversation between Fifax – Artist and Jon Griffin – JP Morgan Asset Management

First for the aesthetics, Second for the investment Fifax, artist specialising in the surreal portrayal of cityscapes whose most recent works delve into the creations of Gustave Eiffel, discusses his partings and the links between art and the business world with Jon Griffin, Managing Director of J.P. Morgan Asset Management in Luxembourg.

Immersion in the city

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Art, power and money

Around the world with Gustave Eiffel

Š360Crossmedia/L.D

Š360Crossmedia/L.D

What projects are you working on at the moment?

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TRANSACTION AUTOMATION

By Yvonne Hurst - Calastone

The fax is dead, Long live the hub!

By Yvonne Hurst, Managing Director, Europe for Calastone, the global transaction network for the fund industry.

Details from the Study

Both STP and automatic transactions have an immediate impact on reducing fund charges and hence the cost to investors.

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SHADOW BANKING & AIFMD Interview with André Prüm – University of Luxembourg

shadow banking and AIFMD A professor specialised in banking and financial law and founding Dean of the Faculty of Law, Economics and Finance of the University of Luxembourg, André Prüm shares his vision of constant value money market funds (MMFs) Could you briefly take us through the history of constant-value funds?

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What were the reactions at political and industry level?

Š 360Crossmedia/C.O

What solutions do you recommend?

CNAV MMFs are valid instruments, as long as investors are educated and understand their particularities, with regulation on transparency reporting going a long way to help achieve that.

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GENDER IN BUSINESS Interview with Marie-Jeanne Chèvremont – MJC Consulting

At the forefront of the constantly developing Luxembourg financial market, Marie-Jeanne Chèvremont has worked tirelessly to achieve recognition for women’s skills and their contribution to that market.

Give us a little insight into your career so far.

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How has the role of gender in business changed over time?

How is gender balance addressed at KNEIP?

Š360Crossmedia/C.O

The best talent must be recognised, motivated, and nurtured, regardless of gender.

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TOOLBOX

Form PF Vs AIFMD

Common Elements of Form PF & AIFMD 22% of data points required to fulfill the reporting specifications are identical.

45% of data points are commonly addressed (but handled differently).

The frequency at which these data points need to be made available.

Form PF

Key Differences vs

AIFMD

One single regulation

A variety of laws to monitor & adapt to

One single language

Potential varied language requirements

One single report

Multiple versions with country-specific data requirements

Filing to one National Competent Authority (NCA)

Filing to several NCAs using different transmission channels

Regulatory AUM

Leverage and AUM Calculations

Portfolio Stress Tests

Net Equity Delta, DV01, CS01

Liquidity Fund data

Market and Liquidity Stress Tests

Private Equity data

Private Equity data e.g. Dominant Influence Borrowing embedded in financial instruments Gross Exposure of underlying SPVs Preferential treatment of investors Currency exposure Principal Markets & Instruments Prime Brokers Domiciles

The above content is for information purposes only, and should not be considered as legal advice.

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