Prime broker Merlin Securities has launched multi-prime reporting for institutional investors. The service aims to help hedge funds calculate and analyse fees and expenses across their portfolio.
Clients will be able to calculate additional required performance measures and ratios across multiple custodians for specific components of their portfolio: sector, market cap, industry, strategy, geography and a range of customizable user-defined components.
Reporting remains the major strength of Merlin in a prime-brokerage landscape dominated by Wall Street brands. In the recent 2010 Global Custodian Prime Brokerage Survey, the firm received the best scores in the survey for technology and reporting. Merlin is the best I have seen, wrote a client of his reports. Light years ahead, said another.
In todays competitive marketing environment, hedge fund investors require greater transparency and more customizable reporting to allow them to understand a funds performance across a variety of components, said Amr Mohamed, senior partner and chief technology officer at Merlin. Our hedge fund clients can now provide more sophisticated insights into their performance with just a few clicks. For instance, a fund can articulate and segregate alpha contribution by sector, drawdown by market capitalization and market risk exposure by geographic region. In addition, fund managers can also quickly generate their monthly performance analysis net of fees a process that previously required manual input.
Merlins new reporting functionality is available for the full range of measurements that investors demand, including Sharpe ratio, Treynor ratio, volatility, skew on returns, Alpha and Beta versus benchmark (including customized and blended benchmarks), up and down capture ratios, Sortino ratio and drawdown. These measures, in turn, can be isolated by sector, market cap, industry, strategy, geography or by a customized criterion.
Additionally, whereas hedge funds historically have calculated their return-based statistics manually by spreadsheet, Merlin now provides a tool to automate that process. Managers can load their net returns into the system then seamlessly calculate all the analytics on a portfolio or component level based on net numbers.
Todays hedge fund investors expect to be able to drill down into a portfolio and understand performance in ways that historically would have required hours of manual input and analysis, said Patrick McCurdy, partner and head of capital development at Merlin Securities. Portfolio-level analytics are no longer enough, and managers are searching for tools to help them deliver these metrics in a simple and cost-effective manner. We continually strive to provide our hedge fund clients with the tools and technology they need to showcase their performance and demonstrate their edge.