Future of Finance


Fund accounting might not be safe from technological disruption (29th July 2020)

A Future of Finance Webinar with fund administrators, fund managers and technology vendors


Wednesday 29 July 2020 2.00-3.00 pm UK time

Fund accounting is no longer safe from technological disruption. Even if the net asset value (NAV) calculation methodology is invulnerable to modification by technology, the process by which NAVs are manufactured is open to change. Instead of NAVs being calculated once day, arbitrageurs might use the instant availability of stock prices to force fund accountants to produce them in real-time. Current data intermediaries will find their franchises threatened. Even if securities are not replaced by digital tokens, digitisation might mean whole new classes of asset can no longer be marked-to-model. As at any Future of Finance event, this webinar brings together fund accountants and would-be disruptors to explore whether there is a better way to value funds that can increase the size and profitability of the industry.



Fund accounting used to seem safe from technological disruption. Its twin – transfer agency – has long appeared vulnerable to instantaneous delivery of fund units against payment on real-time networks, the replacement of registers of shareholders by continuously updated digital ledgers and the automation of KYC and AML checks through widespread adoption of digital identities. But even the blockchain evangelists never argued that they could reinvent net asset value (NAV) calculation. This view might prove complacent. Fund accountants feed off price information supplied by data vendors. If digital assets traded on networks and networks of networks displace conventional securities markets, the sources of price information will change. Pressure to use real-time prices will increase. The established data vendors might be disintermediated altogether. The digitisation of a wider range of asset classes might replace manual and mark-to-model calculations by mark-to-market prices or, paradoxically, increase the amount of manual intervention required to finalise a NAV as prices of entirely new illiquid asset classes prove elusive. Simultaneously, pressure for more frequent NAV calculations will rise as reconciliation of the records of the assets held by a fund manager, a custodian and a broker are speeded up. Digitisation is likely to leave the methodology of NAV calculation untouched. But it could transform the economics of the fund accounting industry.
Topics of discussion will include:
• Digital assets replacing conventional securities
• A possible shift in sources of price information
• The need to value unfamiliar asset classes
• Pressure for more frequent NAV calculations
• A squeeze on margins as fund managers demand more for less

Sponsored by Apex Group

Apex Group Ltd., established in Bermuda in 2003, is a global financial services provider. With 45 offices worldwide and 3,500 employees, Apex delivers an extensive range of services to asset managers, capital markets, private clients and family offices. The Group has continually improved and evolved its capabilities to offer a single-source solution through establishing the broadest range of products in the industry; including fund services, digital onboarding and bank accounts, depositary, custody and super ManCo services, business services including HR and Payroll and a pioneering ESG Ratings and Advisory service for private companies.www.theapexgroup.com


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