This entry is part 2 of 4 in the series Newsletter Issue VII - May 2012

As interest in partnership accounting software for alternative investments remains strong, many software providers continue to enhance their existing product offerings to meet the increasingly complex aspects of their clients’ needs. In this issue we focus on Eagle Investment Systems’ partnership accounting offering, Eagle PT-Plus.

Eagle Investment Systems Background

Based in Wellesley, MA, Eagle has been providing comprehensive software solutions for the investment management industry for over two decades. The company provides innovative solutions for portfolio management including data management, investment accounting, and performance measurement.

Eagle PT-Plus

Eagle PT-Plus is a web-based partnership and tax accounting system that offers alternative investment managers an end-to-end solution.

Eagle PT-Plus offers hedge fund managers and other alternative investment managers a solution to allocate income and expense to limited partners. The system also supports fund and individual performance reporting and creates K-1s. Eagle PT-Plus was borne out of collaboration between Eagle Investment Systems and a prominent prime broker to create a comprehensive solution. Today there are more than a thousand funds being managed on the platform. The initial focus of the application was the development of partnership and tax-reporting functions such as allocations, layering, tax compliance, flexible incentive and performance-based-fee calculations.

Eagle Investment Systems describes the application as follows: “Eagle PT-Plus is a web-based partnership and tax accounting product designed to meet the complex needs of the alternative investment community. At its core, Eagle PT-Plus provides functionality necessary for performing partnership allocations for hedge funds”.

The application was initially designed as a component of the Eagle product suite. In conjunction with Eagle’s investment accounting solution, the platform can service the full accounting process for a hedge fund. Eagle PT-Plus can also integrate with any leading portfolio accounting systems.

Since its initial development in 2002, Eagle PT-Plus has undergone significant enhancements. A recently updated version contains functionality for supporting a variety of fund structures. Another newly added enhancement is the automation of incentive fee calculations.

Next Generation Updates

In speaking with Rich Robins, VP of Business Development, Eagle plans some key updates over the next 12 – 18 months for Eagle PT-Plus. “The next release is focused on new fee calculations and reports. We also look to leverage existing Eagle technology to support thousands of hedge funds and hundreds of thousands of LPs with high availability on a single instance for our large clients” commented Robins.

Some of the planned developments highlighted by Robins will be included in future releases of Eagle PT-Plus:

  • Initial conversion to core Eagle Accounting Platform (Fall 2012)
  • Continued investment in support of Equalization and Floating Hurdle Fee calculations
  • LP Client Portal where K-1s and Fund Management Reports could be linked

Also, Eagle is now an OEM partner of Microstrategy, and clients will be able to have new reporting capabilities that are backwardly compatible with earlier releases.

IntegriDATA’s View

Eagle PT-Plus in its current state can provide an effective allocation solution for hedge funds. This is irrespective of whether firms are already using one of Eagle’s existing applications. The application covers some major aspects of the partnership accounting including a participant recordkeeping system, income and fee allocations, and tax processing.

While Eagle PT-Plus was initially developed to support the needs of hedge funds, given its flexible architecture, this solution can also be used by other funds which require specialized income allocations and fee processing. In order to be utilized by private equity/closed end funds, however, Eagle PT-Plus would need to be updated with the following functionality:

  • Ability to track investor commitments
  • Subsequent close functionality
  • Enhanced functionality for transfer of assignments

Additionally, some of the items on the nice-to-have list may include: (1) screens enhanced with investor information (e.g. Contributed Capital by date); (2) CRM integration to enable mail mergers out of Eagle PT-Plus (e.g. mailing investor statements); and (3) ability to generate customized investor communications (this would be a component of the end-to-end solution).

Final Thought

IntegriDATA offers deep expertise in the field of fund and partnership accounting including system selection and implementation, and application development services. In the past 7 years we have done several vendor selections and implementations for both Private Equity funds and Hedge Funds in need of partnership accounting systems. Five to six years ago, the market was dominated by a limited number of key players but this is no longer the case – new vendors are entering the space, and many have already earned a solid reputation.

It appears that Eagle Investment Systems is eager to further build out their product to effectively compete with the existing market leaders. IntegriDATA will continue the dialogue with the Eagle PT-Plus team, monitor the development of this product, and provide periodic updates on functionality enhancements to our clients/readers.

IntegriDATA stays current on the topic of fund and partnership accounting. We closely monitor industry trends, best practices, and regulatory changes (e.g. new reporting requirements of Form PF) through on-going conversations with investment management firms, 3rd party vendors/solution providers, as well as other various industry organizations. In order to complement our knowledge of the current market leaders we regularly review and evaluate new vendors in the market. We look forward to posting our findings in future editions of the newsletter.

Disclaimer: All detailed analysis performed relates solely to Eagle PT-Plus. All other Eagle solutions mentioned were demonstrated or discussed at a much higher level.

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