FAQs
- What does GlobeOp® do?
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GlobeOp is a leading independent provider of automated, integrated middle- and back-office, administration and risk reporting services to the rapidly growing hedge fund industry and asset managers – including banks, insurance companies, mutual & pension funds and proprietary traders – and their investors.
We also provide GoOTCTM over-the-counter derivative trade processing services on a standalone basis, process bank debt trades via Wall Street Office, and provide direct market access to web-based multi-asset web-based trade execution, booking and related platforms with straight-through trade processing (STP) through GoMarketsTM.
- What is the difference between middle- and back office, and fund administration services?
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Middle-office
- Daily portfolio P&L statements
- Exposure calculations and reports
- OTC processing
- Bank loan processing
- Real-time analytics
Back-office
- Trade capture and data processing
- Security master processing,
- monitoring and maintenance
- Data aggregation and pricing
- Daily reconciliation
Fund Administration
- Fund valuation, pricing & NAV calculation
- Share registry & transfer agency
- Investor relations
- Audit support
GlobeOp’s web-based MBA platform is integrated with our fund administration system, allowing us to both manage post-trade services and prepare customized account records that can be accessed worldwide.
- What other services does GlobeOp offer?
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- GoOTCTM – OTC derivative processing
- GoRiskTM – Risk analysis and reporting services
- GoValuationTM – Independent 3rd party portfolio valuation
- Investor services
- GoBook® – Fund performance reporting
- GoMarketsTM – electronic front-office tools
- What are the benefits of outsourcing? Why is it better to use an independent provider?
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Outsourcing to GlobeOp permits clients to focus their time and resources on their core competencies of managing capital and trading strategies rather than on infrastructure. Our trade and date processing capabilities and comprehensive middle-back office, administration (MBA) and risk technology and services also reduce clients’ overall technology –related investments. Our scale, technology and expertise enable us to provide faster, more reliable and more cost-effective MBA services than most hedge fund managers could otherwise create or access internally.
Institutional investors are increasingly demanding that data on hedge fund performance, net asset value (NAV) and risk management be more transparent and prepared by independent sources with proper controls and procedures. GlobeOp is particularly credible as an independent service provider because it is SAS 70 Type ll certified, is a recognized expert in OTC derivatives processing and risk analytics, does not compete with its clients by being involved in trading and is not owned by an investment bank.
- How does GlobeOp assist with valuation?
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GlobeOp provides independent 3rd party daily profit and loss (P&L) reporting and month-end portfolio pricing and net asset value (NAV) for hedge funds and funds of funds within its middle-back office and fund administration services. We also specialize in pricing illiquid products i.e. cash and valuation reconciliations for more than 60 unique OTC instruments for hedge funds as well as mutual funds accessing the OTC market under European UCITS lll legislation.
GoPricingTM, GlobeOp’s proprietary central pricing system, calculates P&L and NAV statements and OTC derivative values using prices available from multiple sources – those specified by clients, securities data sources, standard industry data providers, counterparties – and validates their accuracy. We also offer other web-based tools for further P&L analysis.
Non-client funds can also benefit from GoPricing to provide their investors with an independent portfolio value report.
GlobeOp is a member of the UK Alternative Investment Management Association’s (AIMA) asset pricing committee, which published a set of best practice recommendations for the valuation of hedge fund portfolios.
- How does GlobeOp help funds manage risk?
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GlobeOp offers a comprehensive set of customized, integrated risk reporting services, including pre-trade and portfolio data analysis, reporting and modeling to both hedge fund managers and investors, including funds of funds. Because the same data is used to provide MBA, risk reporting and OTC processing services, we are able to aggregate trade and position data to provide independent third-party risk analysis.
Risk reports can be customized on a daily, weekly or monthly basis, as required by the client. Analytical tools available via GlobeOp’s secure client website include exposure and scenario analysis, stress testing and value-at-risk (VAR) calculations.
- How significant is operational risk to hedge fund performance?
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Operational risk is becoming increasingly important to investors – private and institutional – increasing their demands for robust, transparent, professional infrastructure and independent data and process validation. A wide variety of daily fund activities can generate operational risk that can affect fund efficiency and performance: manual data replication, the use of cumbersome spreadsheets, lack of real time risk data, backlogs in OTC trade reconciliation, collateral and document management, etc.
GlobeOp assists funds in meeting investor expectations (and enabling fund managers to concentrate on their core skills) by providing highly automated, real-time processing; web-based monitoring and reports; and ongoing benchmarking through SAS 70 Type ll audits and certification.
- What kind of funds do you work with?
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We provide middle-, back-office, fund administration and risk reporting services to hedge funds with a diverse range of assets under management, fund strategies and geographic locations.
Standalone OTC trade processing and support services (GoOTCTM) are provided to both hedge and mutual funds as well as custodian banks.
GoOTC and GoMarketsTM’ direct market access to web-based multi-asset web-based trade execution, booking and related platforms are also useful to long only fund asset managers as well as regional banking institutions, pension funds and insurance companies as their business models change.
- Which sectors is GlobeOp strongest in?
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GlobeOp is recognized for its expertise in:
- Servicing clients with complex needs, including funds trading in the OTC derivatives market, credit funds and funds of managed funds
- Integrated, transparent OTC derivative trade processing for hedge and mutual funds including support to mutual funds and custodian banks for the provides independent daily valuation and risk reporting required by the European UCITS lll directive
- Comprehensive, customized, integrated risk analytics & reporting services, including pre-trade and portfolio data analysis, reporting and modeling as well as risk analyses based on aggregated trade and position data
- Online investor reporting including of fund performance data via GoBook.
- How does GlobeOp differ from its competitors?
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- GlobeOp is recognized for its expertise in servicing clients with complex needs, including funds trading in the OTC derivatives market, credit funds and funds of managed funds. GlobeOp currently processes approximately 4% of the global daily OTC trading volume.
- GlobeOp’s integrated web-based platform both manages the performance of a broad range of middle-, back-office, fund administration, risk analytics and OTC processing tasks and provides clients with transparent, real-time, web-based monitoring and reports.
- GlobeOp’s continuous financial technology innovation combines sophisticated proprietary developments with leading commercial software and is unencumbered by legacy IT systems.
- GlobeOp’s operational platform is scalable and flexible due to the nature of our technology and our ability to recruit and train skilled, highly educated employees in our three Mumbai, India offices. The time zone difference between India and the UK and US markets enable us to process and report client trades and positions prior to the next day’s marketing opening.
- Deep management knowledge of and experience in the hedge fund industry and operational processes enables GlobeOp to anticipate and adapt to evolving client service requirements.
- GlobeOp does not compete with its clients through proprietary trading or having capital and risk on their trades. We believe funds, their managers and investors value the confidential and reduce conflict risk of an independent service provider.
- Why is demand for GlobeOp services growing?
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There has been a recent rapid growth in both assets managed by hedge funds, as well as in the number of hedge funds and funds of hedge funds. Hedge funds have also diversified the number and types of asset classes they invest in, including complex and often illiquid over-the-counter (OTC) derivatives. GlobeOp is uniquely positioned as an independent, integrated solutions provider with a robust, scaleable, transparent infrastructure and proven OTC derivative expertise.
In Europe, mutual funds and custodian banks exploring derivative market opportunities under the UCITS lll directive are challenged by the additional stress the complexity and volume of OTC trades creates on internal trade processing systems, compounded by UCITS lll requirements for independent and daily valuations and risk analytics. GlobeOp offers them the robust, scalable infrastructure needed to take advantage of derivative market opportunities and support in meeting the UCITS lll regulatory requirements.
The risks and absolute return characteristics of hedge funds continue to attract a growing number of institutional investors to the sector. They increasingly demand that data on hedge fund performance, net asset value (NAV) and risk management be more transparent and prepared by independent sources with proper controls and procedures. GlobeOp is particularly credible as an independent service provider because it is not involved in trading or owned by an investment bank, and is SAS 70 Type ll certified.
- Where are GlobeOp’s offices? Do clients receive local market service?
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Established in 2000, GlobeOp today employs approximately 1,800 people in nine offices on three continents. Headquartered in London, UK and New York, NY, USA, GlobeOp’s offices are also located in Dublin, Ireland; George Town, Cayman Islands; Harrison, NY and Hartford, CT, U.S.A.; and Mumbai (Bombay), India.
GlobeOp’s clients range from smaller single office funds to large funds with complex needs, including hedge funds trading in the OTC derivatives market, credit funds and funds of managed accounts. These clients are located in many locations worldwide with fund growth strategies that increase in number, complexity and geographic diversity. Our global service network serves as their virtual back office based on mirror operations in the US, UK and India that enable us to optimize both local market knowledge and international time zones to process client trades and positions in-house, overnight.
As GlobeOp’s Mumbai offices open approximately half a business day before UK markets, and almost a full business day before the US market, GlobeOp processes and records clients’ previous-day trades and positions prior to the opening of the markets’ next business.
- How does volatility affect GlobeOp’s business?
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The structure and robustness of GlobeOp’s technology and infrastructure was tested and performed seamlessly during July-August 2007 when OTC volumes escalated rapidly, particularly in the credit derivative market. One dealer survey later indicated that aged outstanding confirms in OTC derivatives roughly doubled in volume during the crisis. GlobeOp recorded a significant surge in daily OTC processing figures, growing from 1,300 transactions per day to over 2,000 at the height of the turbulence. Prior experience in frequently handling opportunistic hedge fund trading activity that can ebb and flow dramatically with market opportunities meant GlobeOp service teams, processes and technology were prepared for the surge.
- As GlobeOp services are web-based, how are clients protected from power or internet service interruptions?
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GlobeOp’s IT infrastructure and business recovery process is based on two US-based data centers that operate in an active-active configuration, both running production processing on a daily basis. The centers are located in separate power grids with separate telecommunication and power suppliers, and are subjected to regular reliability testing.
GlobeOp’s global office network is equipped with backup systems and multiple service provider networks.
When Asian/Middle-East undersea internet cables were damaged in early 2008, GlobeOp continued to function normally and maintain customer service by taking advantage of its redundant and diverse Wide Area Network (WAN) and re-directing data traffic around the problem.