Shadow Processing Service
- A cost efficient way to provide comfort to investors by having fund assets verified and valued by an independent, experienced third party
- The level of shadow processing and accounting can be either a high level review or detailed daily review over a defined timeframe
- Validity, reasonableness, and consistency are tested against market practice and the fund’s own offering documents
- Confirm that investor capital movements are consistent with cash movements reported by the fund’s bank
- Obtain the necessary counterparty reports and verify the market value of the fund’s assets
- Obtain the necessary broker or bank reports and verify that each cash balance reflected in those reports reconciles to the primary NAV (Net Asset Value)
- Review all pricing components
- Review and recalculate profit and loss allocations
- Review and recalculate tax calculations
- Verify that the GNAV (Gross Net Asset Value) based fees, such as management and incentive fees, are calculated in accordance with the offering documents
- Review and recalculate fee calculations