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Shadow Accounting
Shadow accounting refers to a parallel or supplementary accounting system maintained by investment managers or financial institutions to track and monitor the performance and transactions of certain investment portfolios or funds.
This additional accounting system runs alongside the primary accounting system and is often used for specific purposes such as compliance, risk management, or performance evaluation.
What is shadow accounting?
Shadow accounting is a term commonly used in the investment management industry. It refers to the practice of maintaining a parallel or supplementary accounting system alongside the primary accounting system.
The purpose of shadow accounting is to provide an independent verification and validation of the primary accounting records, transactions, and calculations.
What is a shadow account?
A shadow account is an unofficial or duplicate record that mirrors the activity of a primary account. It's commonly used for monitoring, auditing, or verifying financial data without interfering with the actual system.
- Serves as a duplicate of an official account for tracking purposes
- Commonly used in finance, HR, and sales performance management
- Helps identify inconsistencies or errors in official records
- Often used in incentive programs to verify commission calculations
What is shadow accounting in hedge fund?
This additional accounting system is often operated by the hedge fund's investors or a third-party service provider and serves several purposes:
- Verification and transparency: Shadow accounting provides investors with an independent verification of the hedge fund's performance, positions, and transactions. By maintaining separate records from the fund's internal accounting system, investors can verify the accuracy and integrity of the reported data, enhancing transparency and trust.
- Risk management: Hedge fund investors use shadow accounting to monitor and analyze the risks associated with their investments in real-time. By comparing the results from the primary and shadow accounting systems, investors can identify discrepancies or anomalies that may indicate increased risk exposure or potential operational issues within the fund.
- Compliance monitoring: Shadow accounting helps ensure compliance with regulatory requirements and investment guidelines. Investors can independently verify that the hedge fund is adhering to relevant regulations and contractual agreements, detecting any violations or discrepancies that may require corrective action.
- Performance evaluation: Shadow accounting enables investors to evaluate the performance of their investments in the hedge fund accurately. By providing detailed information on returns, contributions from various strategies, and other performance metrics, shadow accounting helps investors assess the effectiveness of their allocation decisions and overall investment strategy.
What funds are used under shadow accounting for verification, risk management, and investor communication?
Under shadow accounting, various funds and strategies can be used to achieve different objectives such as verification, risk management, and investor communication. Here are some examples:
- Verification Fund: A verification fund is a separate investment vehicle or account specifically designated for verifying the accuracy and completeness of transactions and performance reported by the primary fund or investment manager.
Investors may allocate a portion of their assets to the verification fund, which operates independently from the primary fund but mirrors its investment strategy and holdings.
By comparing the results of the primary fund with those of the verification fund, investors can verify the accuracy of reported data and ensure transparency.
- Risk Management Fund: A risk management fund focuses on managing and mitigating risks associated with investments in the primary fund or portfolio. This fund may employ hedging strategies, diversification techniques, or other risk management tools to protect against market volatility, credit risk, or other sources of potential losses.
By allocating assets to a risk management fund, investors can reduce their overall exposure to risk while maintaining exposure to the primary fund's underlying investments.
- Communication Fund: A communication fund serves as a vehicle for communicating investment performance, strategy updates, and other relevant information to investors. This fund may provide regular reports, updates, or meetings to keep investors informed about the progress and activities of the primary fund or portfolio.
By allocating assets to a communication fund, investors can access timely and transparent communication from the investment manager, fostering trust and confidence in the investment process.
How to create a shadow account?
Creating a shadow account involves setting up a parallel system to reflect key transactions or data entries. It’s a simple but effective way to validate financial records or monitor sensitive performance metrics.
- Identify the key data points or transactions to track
- Use spreadsheets, financial software, or cloud-based tools
- Regularly update the shadow account alongside the official account
- Review and reconcile discrepancies on a consistent basis
- Keep the process secure and confidential to protect sensitive data
Encuestas sobre el pulso de los empleados:
Se trata de encuestas breves que pueden enviarse con frecuencia para comprobar rápidamente lo que piensan sus empleados sobre un tema. La encuesta consta de menos preguntas (no más de 10) para obtener la información rápidamente. Pueden administrarse a intervalos regulares (mensual/semanal/trimestral).
Reuniones individuales:
Celebrar reuniones periódicas de una hora de duración para mantener una charla informal con cada miembro del equipo es una forma excelente de hacerse una idea real de lo que les pasa. Al tratarse de una conversación segura y privada, te ayuda a obtener mejores detalles sobre un asunto.
eNPS:
eNPS (employee Net Promoter score) es una de las formas más sencillas y eficaces de evaluar la opinión de sus empleados sobre su empresa. Incluye una pregunta intrigante que mide la lealtad. Un ejemplo de preguntas de eNPS son ¿Qué probabilidades hay de que recomiende nuestra empresa a otras personas? Los empleados responden a la encuesta eNPS en una escala del 1 al 10, donde 10 significa que es "muy probable" que recomienden la empresa y 1 significa que es "muy improbable" que la recomienden.
En función de las respuestas, los empleados pueden clasificarse en tres categorías diferentes:
- Promotores
Empleados que han respondido positivamente o están de acuerdo. - Detractores
Empleados que han reaccionado negativamente o no están de acuerdo. - Pasivos
Empleados que se han mantenido neutrales con sus respuestas.
