Shadow Accounting

As managers look to strengthen their back office operations without replacing them, they have seen the benefit of partnering with administrators who already have this specialist expertise in trade capture, reconciliation and pricing.  Because of this, Shadow Accouting services evolved, as investment managers offer their clients the comfort of an outside agency verifying their portfolio reporting.  Custom House has developed a specific solution to allow managers to utilise our capability to capture, reconcile and price portfolios so as to ‘shadow’ their own back office reporting, thereby offering an important independent check to investors.  Responsibility for accurate valuation reporting remains with the manager, but the addition of this ‘shadow’ role when performed by Custom House provides greater substance and comfort.

The Custom House Shadow Accounting service is an efficient and cost effective solution for managers looking to complement their back office, without the cost and unnecessary risk of changing a trusted in-house capability.  Timing for delivery of the reports can be customised to suit both manager and investor alike.  Taking full advantage of Custom House’s global coverage and technical capabilities, managers will receive a ‘shadow’ version of their portfolio directly, while investors can be advised via CHARIOT or by the managers own reporting tool.

As the concept of Shadow Accounting for self administered funds developed both the larger managers of independently administered funds and institution investors have used independent shadow accounts to verify the valuations of funds, managed portfolios and/or managed account platforms, in which they have invested.