Glossary

Alternative Assets

An alternative asset is any investment that falls outside of the traditional asset classes of stocks, bonds, and certificates. Alternative investments consist of a wide variety of assets, including tangible assets, such as antiques, art, and precious metals, as well as financial assets, such as private equity, private debt, real estate, venture capital, and more.

Alternative Investment Software

Alternative investment software is technology designed specifically to meet the needs of alternative investment managers. The unconventional and illiquid nature of alternative assets makes them challenging to manage, especially when using legacy technologies not designed for the needs of alternative investment managers. Alternative investment software solutions provide alternative investment managers with the tools they need to be able to manage their alternatives portfolio throughout all stages of the investment lifecycle.

Asset Servicing

Asset servicing is a term used to describe the activities that support an asset manager. These can include collecting the cash flow from investments, collecting dividends and interest payments, managing corporate actions and proxy voting, among other functions. Allvue’s Asset Servicing solution allows firms to focus on credit research, trades, and monitoring, while Allvue’s staff handles the day-to-day operations of investments.

Business Intelligence

Business intelligence is the process of leveraging software and services to analyze data in service of developing actionable insights into business decisions. Business intelligence tools help key decision makers easily visualize data and create reports. In the world of alternative investments, these tools allow portfolio managers to quickly identify red flags and easily spot trends across their portfolio companies and deal pipeline.

Collateralized Loan Obligation

A collateralized loan obligation is an individual security backed by a pool of debt. CLOs are a form of securitization where payments from multiple loans of various sizes are pooled together and passed on to investors. In a CLO, the investor assumes most of the risk in the event that the borrowers default, but they also offer greater diversity and a potentially higher return. The CLO market, largely halted by the 2008-2009 financial crisis, had a resurgence in the second half of the 2010s, giving rise to a new class of CLO managers and technology to support them.

Commercial Banks

Commercial banks are financial institutions offering a broad range of services. Commonly contrasted with investment banks – which provide services to large corporations and institutional investors – commercial banks offer services geared towards individuals and small businesses, including providing checking account services, making loans, and offering financial products like certificates of deposit and savings accounts. Given the wide range of services commercial banks provide, they often require specialized technology tools to meet their needs. Allvue’s solutions for commercial banks help them manage their loan portfolios with best-in-class tools covering portfolio management, commercial lending origination, underwriting & workflow, loan accounting, loan sales, and trade order management.

Compliance

In the world of alternative investments, compliance refers to the process of ensuring that trade processes remain within a firm’s guidelines throughout the trade life cycle. Given the exponential increase in regulatory complexity over the last decade and the need to move quickly within turbulent markets, many firms look to onboard compliance management software in order to ensure they stay within pre-trade and post-trade compliance without hindering their trading processes.

Corporate Accounting

When used in reference to private capital, corporate accounting, also known as management company accounting, is the management of a GP’s own financials. Because of the unique complexities of investment management in general and alternative assets in particular, GPs often have unique and challenging corporate accounting needs, which traditional, multi-industry accounting products are not able to meet. Allvue’s Corporate Accounting solution is designed specifically for private capital markets, allowing GPs get complete A/R and A/P functionality, invoicing, bill pay, budgeting, financial statement reporting and more.

Distressed Debt

Distressed debt is any security that has been issued from a borrower that is likely to enter or is currently within the bankruptcy process. The volatility of the industry can offer outsized returns, but the fast-pace of the markets and the complexity of valuing and managing distressed assets can prove challenging. Distressed debt investing often sees an uptick during periods of substantial market volatility.

Distressed Debt Exchanges

Distressed debt exchanges are when a company, in order to stave off bankruptcy, offers an exchange of one type of security for another, at a price. As an example, a company – lacking cash on hand and not generating any cash flow – will offer bond holders the chance to exchange a current bond, coming due in the next year, for a bond with a later maturity, at an exchange of 50 cents on the dollar.

Dry Powder

Dry powder, when associated with private capital, refers to capital that has been committed but not yet allocated. It is unspent cash that a fund is waiting to invest. Funds will sometimes hold cash on hand in order to quickly take advantage of investment opportunities during volatile markets.

Fund Accounting

Fund accounting, in reference to alternative investments, refers to the methods of accounting used by investment funds. Some of the responsibilities of fund accounting overlap with traditional, corporate accounting – such as identifying income and expenses on an accrual basis and verifying accounting records against external sources – but others are unique to investment funds. Because of this, portfolio managers often need fund accounting software specifically designed for private capital markets, capable of handling complex fund structures and partnership accounting requirements.

Fund Administrators

Fund administrators are third-party service providers who handle the back- and/or middle-office needs of investment funds. Fund administrators in private capital operate in a competitive marketplace where they must try to meet the increasing needs of GPs while still building a scalable and efficient business. Allvue supports many successful fund administrators with best-in-class Accounting, Investor Portal and CRM solutions.

Fund of Funds

A fund of funds is a pooled investment strategy that invests in other types of funds. Instead of stocks, bonds, or other more traditional types of securities, a fund of funds portfolio contains underlying holdings of other funds. Because of this, fund of funds have unique needs throughout their investment life cycles, from the back office to fundraising to investor reporting. Allvue provides fund of fund managers with a full suite of solutions to help them more easily and efficiently manage their portfolio, operations, and investor relations.

General Partner

A general partner, when associated with alternative investments, is the manager of the private capital fund. Alternative investment funds are commonly structured as general partnerships, with investors acting as the limited partners and the fund as the general partner.

Investment Accounting

Investment accounting refers to the bookkeeping of individual holdings within an investment portfolio. Allvue’s Investment Accounting software is designed from the ground up with proper accounting checks and validation in place on every transaction, allowing fund managers to supervise investments and make calculations at a lot level.

Investor Portal

An investor portal is a method of delivering information to investors and other parties virtually. An investor portal differs from other data delivery methods, like a virtual data room, in that it provides a two-way channel of information sharing between investors and fund managers. Done correctly, investor portal technology can create a win-win environment for LP communications.

Limited Partner

A limited partner, in the world of alternative investments, is the investor in a private capital fund. Alternative investment funds are commonly structured as general partnerships, with the fund acting as the general partner and the investor as a limited partner. Allvue helps limited partners meet their specific portfolio management needs through a robust suite of front-, middle-, and back-office solutions.

Multi-Family Office

A multi-family office is a commercial enterprise, often an independent firm, that provides financial and personal services to multiple families and their generational members. The multi-family office approach, as contrasted with the single-family office approach, allows for families to appropriate family office services without the burden of financing a family office team.

Performance Attribution

Performance attribution is the process of analyzing a portfolio’s performance in an attempt to understand which factors drove return. Allvue’s Performance Attribution solution helps fund managers measure performance based on allocation and selection effects, using GIPS-compliant and industry-standard methods, so that they can maximize ROI and increase the consistency of their investment strategy.

Pipeline Management

In the world of alternative assets, pipeline management refers to the process of tracking potential investors and deals across each stage of the deal pipeline. Allvue’s Pipeline Management solution provides a complete overview of a fund’s opportunity set, tracking potential investors and deals using contacts, conversations, emails, and more.

Portfolio Management

Portfolio management involves the planning, execution, and maintenance of an investment portfolio. It involves everything from tracking investment exposure to managing risk. Allvue’s Portfolio Management software provides fund managers with real-time dashboards and interactive reports, so they can handle all aspects of portfolio management in one unified platform.

Portfolio Monitoring

Portfolio monitoring is the process of tracking the operational performances of portfolio companies. During periods of sustained market volatility, portfolio monitoring becomes especially vital for fund managers, as investors and other stakeholders begin to request more and more information about underlying holdings to better understand the long-term standing of the portfolio. Allvue’s Portfolio Monitoring solution helps streamline the collection, management, and reporting of key financials from portfolio companies so that fund managers can quickly gain valuable insights into the state of their portfolio.

Pre-Trade Compliance

Pre-trade compliance is the process of establishing a set of rules – determined by the compliance team in accordance with federal regulations – that prevent the trading team from executing trades that could damage the fund’s capabilities. Given the complexity of regulatory requirements and the speed at which traders often need to operate, funds generally need a customizable software solution that can automatically check for violations based on pre-defined inputs.

Private Debt

Private debt is a debt either held by or extended to a privately held company. Often, private debt takes the form of non-bank institutions offering loans to private companies – or trading those loans in a secondary market. Private debt is one of the fastest growing alternative asset classes. Because of this, many private debt investment managers find themselves quickly outgrowing legacy technology tools and lacking the infrastructure needed to scale. Allvue offers a full suite of private debt tools that boost efficiency, transparency, and decision making by supporting the entire credit investment lifecycle.

Private Equity

Private equity refers to taking an equity or ownership interest into a company or asset that is privately held. While the private markets are significantly smaller than the stock market, the growth of private equity is significantly greater than that of the stock market. This growth has left many fund managers struggling to manage their portfolio on outdated infrastructure and legacy technology. Allvue’s complete suite of private equity solutions help funds grow and scale successfully, by offering an integrated solution that can address all of a GP’s needs, from back office to investor relations to deal tracking.

Real Estate

In relation to private capital, real estate is an asset class made up of pooled investments in the property market. Unlike other types of private capital strategies, Real Estate managers need to track and report on metrics that are unique to their industry. Therefore, spreadsheets or other generic solutions that cannot address the accounting, deal tracking, and reporting needs specific to their industry often are not able to meet their needs. Allvue provides a fully-integrated suite of solutions to power everything Real Estate fund managers needs to support their growth.

Research Management

Research management refers to the process of searching the investable universe for investment opportunities, monitoring and tracking those opportunities, and deciding whether to recommend those opportunities to the portfolio management team. Research management, which can be a complex and challenging process, especially when dealing with non-traditional assets like alternative investments, can be greatly abetted by investment software that can streamline the collection and management of related data.

Single-Family Office

A single-family office is a privately held company responsible for handling the wealth and investment management for an individual family and its generational members via dedicated staff and services. A single-family office generally requires a minimum wealth of between $300- and $600-million in assets in order to justify the cost of staffing, software, and maintaining a physical location.

Subscription Facility Management

Subscription facility management refers to the overseeing of subscription credit lines – revolving credit facilities secured by the uncalled capital of a fund’s investors. Subscription lines can provide fund managers with liquidity more quickly than a capital call would, allowing them to quickly respond to opportunities. The management of subscription lines can quickly become complicated, though, making it difficult for fund managers to understand their true liquidity profile. Allvue’s Subscription Facility Management solution set helps normalize disparate data, track LP exposures, and achieve transparency into deal workflows so that both lenders and borrowers can make more informed decisions more quickly.

Trade Order Management System

A trade order management system, also known simply as an order management system or OMS, is a software solution that facilitates and manages trade order execution. Funds use trade order management systems when filling orders as a way to increase efficiencies and reduce costs across their workflows. Allvue’s Trade Order Management system offers a full-featured trade blotter that includes a built-in asset-class modeling tool, foreign exchange support, and integration with master feeds, helping to streamline processes associated with trading any asset class.

Venture Capital

Venture capital is a type of private equity where investors provide financing to startup companies and small businesses which they believe are positioned for long-term growth. As with other forms of private equity, venture capital firms have unique needs and need technology solutions designed specifically for their purposes. Allvue’s complete suite of back-, middle-, and front-office solutions for growing VCs offers everything a fund manager needs to run their operations and businesses successfully – regardless of size or strategy.