Case studies
Leo Fund
The Leo Fund group shows pride in Insight
Launched in 2001, the Leo Fund group has developed an impressive track record in managing its various funds. With 19 people working in its office in London , and an investment team with a total of more than 120 years’ of investment experience acquired across several major international investment banks and financial institutions, the group is a well-established and respected player in the hedge fund sector.
Running operations at the Leo Fund group is a multi-faceted task. Alex Franchi, Head of Operations since the group’s inception, has a portfolio of responsibilities that includes the settlement of all trades across multi-funds platform, providing P&L reports, shareholder disclosures, foreign exchange hedging, treasury and movement of cash margin. Not surprisingly, Franchi is very selective about the tools he uses to support his daily activities. There is no room at the Leo Fund group for technology solutions that do not live up to expectations or provide exactly the support that Franchi and his team need.
Throughout its ten years in operation, the Leo Fund group has made significant investments in building a high quality infrastructure which includes risk management, compliance, finance, operations and administration functions as well as a proprietary portfolio management, trading and risk management system in order to better serve their clients and to meet a changing regulatory climate.
The Leo Fund group has also had ten-year relationship with Tradar, and has used Insight™, its portfolio management and fund accounting system, since the group was founded. Insight is an all-round solution that was designed to serve the precise needs of hedge fund and alternative investment managers. With its user-friendly automation and intuitive reporting tools it allows firms to efficiently and effectively track and manage their investments.
Franchi says, “I couldn’t do the job that I have without a specialist system in place, and I need a system that is dedicated to pretty much every element of the hedge fund industry. That is one of Insight’s key strengths, and it is the reason that we brought the software on board in the first place – and it’s the reason that we rely on it. Insight continues to cover everything we need.”
Insight runs P&Ls and positions and gives Franchi and his team at-a-glance view of the trade, position, performance, and exposure data of each of the group’s four funds. The group has created reports and spreadsheets for all its strategies and instrument types around Insight’s customisable reporting, and uses the software for straight-through processing with other fund service providers. It enables the Leo Fund group to export trades to prime brokers, to reconcile positions and ensure settlements are complete in line with regulations. It captures dividends from Bloomberg or Reuters, prices corporate actions and sends out trade files.
“Insight has proved invaluable for providing trade history and exporting trades,” says Franchi. “All the prime brokers’ administrators know the format and have the relevant files set up, which just makes life much easier. The whole process of exporting trades is the life blood of our operations: we have to report to custodians and prime brokers and complete settlements on time. Insight is very efficient and very quick: I can export what I want in the form that I want and it takes a few minutes, then it’s done and we don’t have to worry about it.”
As well as the flexibility of reporting, Franchi is also impressed with Insight’s user-friendly design, and the quality of the support available. As he explains, “It’s a system that is easy to pick up, so as personnel change at the Leo Fund group I can be sure that they will pick up the system and be useful members of the team in a very short space of time. Even if they have a problem, the support on offer is excellent. And now that there is a support team in the US and one in Hong Kong, we even get help if we’re working on a critical trade at midnight. So I don’t have to worry about compliance deadlines with Insight. That kind of attention to detail is exactly what is required in our business.”
However, the hedge fund sector moves at a fast pace, and the Leo Fund group is no exception. It has continued to change its offerings in line with client demand and market expectation. Throughout that time, Tradar has ensured that Insight has also developed to meet the demands of a changing environment.
Franchi explains: “It’s a dynamic system. It gives us confidence because we know we’ve got a product that will still be here, and still be competitive in five or ten years’ time. For example, over the years, we’ve required new leveraged versions of existing portfolios. Insight accommodates that: it allows us to enter a blocked trade and internally allocate between different portfolios, while settling the market trade with the broker. It has made it possible for us to meet the needs of different investor bases with their different appetites for risk by allowing trades to be booked across different portfolios to the same fund. That’s a key step forward.”
“We want to continue using Tradar as we grow and expand,” he says. “We have a strong relationship with the development team there, which means we have some input into future direction. I am confident that each new version will continue to support our needs. The company is incredibly responsive as well: they are stepping their client contact up a gear, which we’re excited about, and with a new user group in the offing it will give us a chance to share experience with other users.”
Franchi concludes, “I’m not sentimental about the tools and systems that we use. We constantly re-evaluate where we invest and everything and everyone has to continue to prove its merit and its value. Insight has consistently added value to our organisation, and I am confident that it will continue to do so.”