In a venture bringing together the world-class firms of Advent Software, Inc (Nasdaq: ADVS), the Bermuda Stock Exchange, Ernst & Young, and Standard & Poor's, PlusFunds.com today announced the alpha launch of its ground-breaking hedge fund site, www.plusfunds.com. This is the first hedge fund e-marketplace to comprehensively mine the capabilities of the internet to supply real time NAV performance information, independent risk transparency and securitized liquidity to a global audience. Observes PlusFunds CEO, Christopher Sugrue, "Plusfunds.com is both a timely answer to the inherent barriers preventing the hedge fund industry from achieving full potential, and an engine capable of transforming the business. We believe PlusFunds.com will help hedge funds become a globally accepted asset class." Sugrue added that PlusFunds.com could potentially transform the hedge fund world from an estimated $350 billion "cottage" industry to a $3 trillion global market relatively quickly.
The Evolution of PlusFunds.com
The idea for PlusFunds.com was conceived by Chris Sugrue along with PlusFunds.com President, Diego Winegardner. As experienced asset managers and fiduciaries, both had observed that their industry was hampered by a lack of information transparency, a lack of liquidity, special interests among information providers, and the lack of an accessible global marketplace for both funds and investors. To bring it to the next level, Sugrue and Winegardner investigated ways to transform the industry's basic elements. They assembled a team of experts to address the administrative, audit, brokerage, investing, pricing, regulatory, and technological aspects of the industry in order to coalesce a macro solution.
Industry Transforming Capabilities of PlusFunds.com
The outcome of this collaboration, PlusFunds.com, is a site that provides real-time, independent performance data on hedge fund managers through 3rd party verified NAVs, combined with risk information. Bolstered by this new transparency, the site creates and drives a secondary market in hedge funds, through the standardization and securitization of participating funds. Aimed globally, the site will be available in 10-languages. Recognizing PlusFunds' industry-transforming capacity, several fund managers and asset allocators have decided to participate in the site.
PlusFunds.com Development Partners
To provide its audience with the complex pricing and accounting engine necessary to generate real time Net Asset Values (NAVs), PlusFunds.com turned to Ernst & Young, one of the largest service providers to the global asset management industry. Notes Alvi Abuaf, E & Y Senior Partner and Director of the firm's internet Encub@tor® division, which provides end-to-end integrated services for internet start ups. "In selecting our development projects, we look for ideas with capacity for large scale impact on a given industry. The PlusFunds idea could change the entire landscape of the hedge fund world." Ernst & Young worked closely with San Francisco software firm, Advent Software, Inc to develop the engine for PlusFunds.com.
For risk analysis, PlusFunds' is working with Standard and Poor's, a respected, independent leader in credit and risk analysis. Plusfunds.com and S&P will provide Value and Risk (VaR), which has become an industry standard in measuring the downside risk of a portfolio, portfolio shocks that cover so-called "tail" events for a large number of asset classes, and other risk information on participating hedge funds. Notes Sanford Bragg, Executive Managing Director for S & P Fund Services, "Our participation in this project reflects Standard & Poor's commitment to being the world's preeminent provider of risk information. Hedge fund investors will receive more timely and comprehensive information on the risks as well as the rewards of their investments, while protecting the confidentiality of the hedge fund portfolios."
With transparency and risk analysis increasing the marketability of hedge funds, the final challenge was to provide a platform for liquidity. The answer was to standardize and securitize the participating hedge funds. A solution was therefore devised through a joint venture with the Bermuda Stock Exchange (BSX). Securitized and exchangeable shares, embedded with recognized legal and structural integrity will trade globally, 22 hours a day, 6 days a week.