Tracking Liquidity with Backstop

Regardless of the type of fund you manage, having a complete understanding of your investor and portfolio liquidity position is crucial. Backstop can help you to track liquidity more accurately, and with far less effort.

 

Investor Liquidity

Backstop enables hedge fund clients to manage investor liquidity on an investment by investment level. For each subscription an investor makes in one of your funds, you can enter the terms of the subscription agreement, which are stored as "Liquidity Terms" in Backstop.

 

Liquidity terms can include lockup, notification period, redemption fee, and redemption period (e.g. annual, quarterly, etc.). In addition, an interactive liquidity calendar can be used to apply different liquidity terms to different periods, allowing users to track gates, holdbacks, and other complex terms. 

 

Once the Liquidity Terms have been entered for investor transactions, the investor's contact summary will display the next available redemption date, along with the redeemable amount. 

 

Additionally, there are several reports for viewing account liquidity in aggregate: 

 

Assets by Notice Date report can show investor liquidity, in aggregate, for each of your products or funds.

 

Liquidity Scenarios This report offers an overview of account liquidity. It is useful for understanding when investor accounts will become liquid. For fund of funds managers, this report can also be used to understand when portfolio investments will become liquid.   

 

Portfolio Liquidity

Funds of funds and institutions can use Backstop to track hedge fund portfolio level liquidity restrictions at the individual investment level. For each subscription you make in an underlying hedge fund, you can enter the terms of the subscription agreement, which are stored as "Liquidity Terms" in Backstop.

 

Liquidity terms can include lockup, notification period, redemption fee, and redemption period (e.g. annual, quarterly, etc.). In addition, an interactive liquidity calendar can be used to apply different liquidity terms to different periods, allowing users to track gates, holdbacks, and other complex terms. 

 

Once the Liquidity Terms have been entered for hedge fund transactions, the holding summary page in Backstop will display all pertinent information related to the next available redemption date, along with the redeemable amount. 

As with investor liquidity, there are several reports for viewing account liquidity in aggregate: 

 

Holding Liquidity report offers a long-term view of your portfolio liquidity, and features a useful graphical representation of the data. 

 

Liquidity Opportunities report is useful for understanding when you can liquidate each of your investments, and, if necessary, how you could unwind the entire portfolio. It shows earliest possible redemption dates for each holding or individual transaction, and can be configured to show different liquidity considerations, including redemption fees, gates and side pockets. 

 

Upcoming Liquidity report offers an at-a-glance view of notice dates. It can be used to ensure that a notice date doesn't pass you by, and to give you the opportunity to reevaluate an investment before the notice date.