INVESTMENT FUNDS: Step 1 Build your Standard Operating Model
Fund Elements provides InFORM, an Investment Fund Operational Risk Management solution, that identifies high risk processes and makes them safe. Our objective is to help you eliminate operational errors.
Go to www.fundelements.io to find out more about InFORM's 5 Steps to make High-risk Processes safe and to sign up for a 14 Day Free Trial.
The first step we take when implementing InFORM is to provide you with a copy of the Top 3 Levels of Fund Element's pre-built processes and controls for Investment Funds.
The role of the Chief Operating Officer
Running an Investment Fund is complex with many moving parts:
multiple service providers,
multiple systems, and
people in different time-zones
all of which need to be co-ordinated.
Take away the music sheets and even with the most talented musicians, the Conductor will struggle to keep everything in tune.
An Operations Manual would help, but who likes documenting procedures and controls?
Fund Elements provides your people with Business Analysis and Problem Solving skills.
We like to help you figure things out by providing you with consistent and reliable documentation.
Elements.cloud Business Analysis App
Fund Elements has pre-built processes and controls for Investment Funds on the Elements.cloud Business Analysis App.
They cover the entire life-cycle of an Investment Fund from the first decision you take with your lawyers on the domicile that best suits your funds needs, to the payment of the last redemption.
On the Elements.cloud App, it takes less than 5 minutes to setup a work Space for you, copy Fund Elements pre-built processes and controls and invite you to access the content.
We then follow a proven approach to build music sheets for your Operations and Governance Teams.
In just 2 weeks, we will can provide everyone who needs to know, including delegates and outsource partners, with the Essentials of how you run your Investment Fund.
12 Areas of Functional Activity
Fund Element's pre-built processes and controls identify 12 area of functional activity that are common to most Investment Funds.
Setup an Investment Fund
Raise Capital from Investors
Invest Capital
Settle Investment Activity
Calculate Net Asset Values
Identify Investment Rule Breaches
Report to the Governance Board
File Financial Returns
File Regulatory Returns
File Tax Returns
Govern the Funds Activities
Close an Investment Fund
The 12 functional areas roll-up into 3 top level processes - Govern, Invest & Report.
Fund Elements approach is visual and easy to understand. It follows a methodology that has been widely adopted for over 20 years.
There are on average 6 key process steps across the 12 functional areas.
Calculate Net Asset Value
Lets take a closer look at one of the Functional areas, the Fund Accounting process, Calculate Net Asset Value.
There are 6 processes in Calculate Net Asset Value:
SETUP fund accounting books and records
RECORD fund activity for the period
RECONCILE accounting positions and balances
REVIEW accounting positions, balances and profit and loss
ALLOCATE profit and loss for the period to investment pools
REPORT results for the period
The approach is hierarchical, the Calculate Net Asset Value function is the third level of detail in your Standard Operating Model.
Each process is broken down into sub-processes until we have discovered all of the tasks required to run your day to day operations.
In our next blog we will look at the Step 2 which involves setting up your fund's system, service provider and people dependencies.
For more information on InFORM's functionality, the 5 Steps to Make High Risk Processes Safe and the 3 Implementation Plans options go to www.fundelements.io/inform.
