Investment Operations
Middle office services for funds and asset managers
The middle office turns investment decisions into a clean, reconciled record the administrator, auditors and investors can rely on. Fundtec runs it as a dedicated team, on your systems or on Tychi.
In one minute
Middle office services are the investment operations that sit between a fund’s front office and its administrator: trade capture and settlement, cash and collateral, pricing, reconciliations and the investment book of record (IBOR). Fundtec provides outsourced middle office for hedge funds, private credit managers and asset managers, delivered by dedicated teams on the client’s own systems or on its Tychi platform.
Managers whose desk, administrator and investors need to see the same numbers, and whose middle office has outgrown spreadsheets or a stretched in-house team.
A 30-minute scoping call, then a written plan: scope, the transition timeline and indicative pricing. No generic proposal.
Weeks 1–4 to Week 17+, in 4 gated phases.
What a middle office does and where it sits
A fund has three operational layers. The front office decides what to buy and sell. The back office, usually an appointed fund administrator, produces the official books, the NAV and the investor records. The middle office sits between them and makes sure that what the front office did is captured correctly, settled on time, priced defensibly and reflected in a position record everyone agrees on.
When the middle office is weak, the symptoms show up downstream: settlement fails, unexplained P&L, stale prices, breaks the administrator raises at month-end and a NAV that takes too long to sign. When it is strong, the administrator receives clean data, the portfolio manager sees accurate exposure every morning and the COO can answer an investor’s operational due diligence questions without scrambling.
Most emerging and mid-sized managers cannot justify a full in-house middle office across every function and every time zone. Fundtec provides it as a service: specialist analysts organized by function, a dedicated project manager who learns your book, and documented controls that stand up to audit and investor review.
Front office vs middle office vs fund administrator
The division of responsibility most institutional managers work to. Exact lines vary by fund and are set out in the service agreement.
| Dimension | Front office | Middle office | Administrator / back office |
|---|---|---|---|
| Primary goal | Generate returns | Accurate, timely investment record | Official books and investor records |
| Book of record | OMS / trading blotter | IBOR (investment book of record) | ABOR (accounting book of record) |
| Timing | Intraday | T+0 to T+1 | Daily, monthly or quarterly NAV cycle |
| Typical outputs | Orders, executions | Enriched trades, settlements, P&L flash, exposure, recs | NAV, capital accounts, financial statements |
| Key controls | Pre-trade compliance | Trade matching, break aging, price challenge, wire controls | Independent NAV review, audit support |
The four middle office services Fundtec runs
Each service can be engaged on its own, but most clients combine two or more so one team owns the handoffs between them.
- 01
Trade operations
Trade capture, enrichment, allocations, matching and affirmation, settlement, fails management, security master and corporate actions across listed and OTC instruments. Explore trade operations.
- 02
Treasury operations
Cash management and funding, controlled wire release, capital call and distribution cash, margin and OTC collateral, and a single consolidated view of cash across brokers and banks. Explore treasury operations.
- 03
Valuations and pricing
Pricing hierarchy design, multi-source price reconciliation, independent price verification, Level 3 mark support and a documented price challenge process. Explore valuations and pricing.
- 04
Loan operations
Private credit and bank loan servicing: agent notices, drawdowns, repayments, interest and fee accruals, PIK, amendments and loan-level reconciliation to the agent. Explore loan operations.
Why the middle office should own the IBOR
The IBOR is the position and cash record the investment team trades from. It needs to be right at start of day, updated intraday and reflect trades that have not yet settled. The administrator’s ABOR is built for a different purpose: it is the accounting record that supports the NAV and financial statements, and it typically lags by a day or more.
Fundtec’s middle office maintains the IBOR, reconciles it daily to prime brokers and custodians, and reconciles it to the administrator’s ABOR on the NAV cycle. Differences are explained, not just listed. If you are building or rebuilding this layer, see IBOR/ABOR setup for how we design the data model, sources and controls from day one.
Daily middle office outputs: P&L flash, exposure and product control
What a typical client receives from the Fundtec middle office each business day. The exact pack is agreed during onboarding.
- Start-of-day positions and cash, reconciled to prime brokers and custodians
- P&L flash by fund, strategy, book and trader, with explained moves versus prior day
- Gross, net and sector exposure, plus concentration against internal limits
- Trade status report: unmatched, unaffirmed and failing trades with owner and next action
- Price exceptions: stale, missing or out-of-tolerance prices flagged before NAV
- Cash and collateral summary: projected balances, margin calls, funding needs
- Product control sign-off: new instruments set up, P&L attribution checked, unexplained items escalated
- Break-aging log with root cause and resolution date
How the middle office is delivered
- Systems
- Your OMS, PMS and accounting stack, or Fundtec’s Tychi platform
- Team model
- Dedicated PM/SME plus specialist analysts in trade ops, recons, treasury and product control
- Coverage
- 24/5 across US, European and Asian trading hours
- Data security
- ISO 27001 certified; work performed in client environments with client-controlled access
- Delivery centres
- Raipur, Kolkata, Pune and Bangalore, with client coverage from New York and Dubai
- Output channels
- SFTP, API, client portal or email, on an agreed daily to annual cadence
How a middle office engagement starts
Timings are indicative. Each phase gate is confirmed with you before the next begins.
Onboarding and design
Process mapping, systems access, operational handbook, target operating model and SLAs. Your existing process keeps running.
Validation and parallel run
The full team joins and mirrors your workflows. Daily outputs are produced in parallel and compared until they match.
Structured handover
Functions move pillar by pillar: trade ops and reconciliations first, then treasury and product control.
Full operations
Business as usual under the agreed governance cadence, scaling as you add funds, brokers and strategies.
Who uses an outsourced middle office
Hedge funds that have outgrown a single operations hire, private credit managers whose loan books have become too large for spreadsheets, and asset managers adding strategies faster than they can hire. The common thread is a need for institutional controls without building a full department. If growth is the driver, see scale your investment operations; if you want the team to sit inside your organization, see managed investment operations.
Engagement model
How an engagement is structured
Economics aligned to your growth. Scope, cadence and pricing are confirmed jointly in the first phase.
- 01 · Weeks 1–4
Onboarding & design
A phase-linked fee covers process mapping, the operational handbook, systems access and the SLA framework — before any handover.
- Target operating model
- Operational handbook
- SLAs agreed jointly
- 02 · From the parallel run
Monthly base fee
Your dedicated team, pod manager oversight and the governance cadence — daily huddle, weekly review, monthly service review, QBR.
- Named PM → SME
- Trained backup for every role
- Governance included
- 03 · As you grow
Scales with AUM
AUM-linked tiers and pre-agreed triggers for new mandates or counterparties — so growth never means renegotiating the contract.
- Transparent triggers
- No renegotiation
- Quarterly pricing review
Every engagement starts with a scoping call — no obligation, no generic proposal.
Request an indicative proposalQuestions
Common questions about Middle Office
Didn’t find your question? Put it to a specialist directly.
Ask a specialistFrequently asked questions
What is the difference between a middle office and a fund administrator?
The middle office maintains the investment book of record and makes sure trades, cash, prices and positions are right in real time. The fund administrator maintains the accounting book of record and produces the official NAV and investor records. A good middle office sends the administrator clean data and reconciles back to it, which shortens the NAV cycle and reduces month-end breaks.
Can Fundtec work on our existing systems?
Yes. Most middle office clients keep their OMS, PMS and accounting platforms and Fundtec’s team works inside them through client-issued accounts, VPN or remote desktop. Data stays in your environment and access is granted and revoked by you. Clients without a suitable platform can run the middle office on Tychi, Fundtec’s proprietary operations platform, with no per-seat licence cost passed through.
Do we have to outsource all four middle office functions?
No. Each service can be engaged on its own. Many clients start with reconciliations and trade operations, then add treasury or valuations once the team knows the book. Combining functions does reduce handoff risk, because the same team sees a failed trade, its cash impact and its effect on P&L, but the scope is set by what you need.
What does a daily P&L flash include?
A P&L flash is an early estimate of daily profit and loss by fund, strategy, book or trader, produced before the official NAV. Fundtec’s flash includes realized and unrealized P&L, explained moves against the prior day, price and FX effects, and flagged exceptions such as missing prices or unbooked trades that could distort the number.
How long does it take to set up an outsourced middle office?
A typical engagement follows four phases: onboarding and design in weeks one to four, a parallel run in weeks five to twelve, structured handover in weeks thirteen to sixteen and full operations after that. Simpler books move faster. Timings are indicative, and each phase gate is agreed with you before the next begins.
What drives the cost of middle office services?
The main cost drivers are trade volume and instrument complexity, the number of funds, prime brokers and custodians, coverage hours, and the reporting pack required. OTC derivatives, private credit and multi-currency books need more specialist time than a long-only equity book. Fundtec aligns pricing to AUM growth rather than charging fixed cost regardless of scale.
How does Fundtec control access to our data?
Fundtec is ISO 27001 certified. Analysts work through client-issued domain accounts over VPN or remote desktop with no local storage, and every action leaves an audit trail in your systems. You grant and revoke access. A data processing agreement is in place, and maker-checker review and segregation of duties apply to every material output.
Continue exploring
Trade Operations
Every trade has to be captured, enriched, allocated, matched and settled before it can be trusted. Fundtec’s trade operations team runs that lifecy…
Read more →Investment OperationsTreasury Operations
Cash is where operational errors become losses. Fundtec’s treasury operations team forecasts, funds and controls fund cash and collateral every day…
Read more →Investment OperationsValuations & Pricing
A NAV is only as good as the prices in it. Fundtec’s valuations team sources, compares and challenges prices every day, and documents why each mark…
Read more →Investment OperationsLoan Operations
Loans do not settle like bonds. Every drawdown, repayment, rate reset and amendment arrives as a notice that has to be read, booked and reconciled.…
Read more →SolutionsIBOR/ABOR Setup
Portfolio managers need intraday positions. Accountants need official books. We design both, connect them to the same data and reconcile them every…
Read more →Managed Investment OperationsManaged Investment Operations
We run defined operations for your funds on our own platform, with a dedicated team that owns the process. You get the technology and the people to…
Read more →Put a dedicated middle office behind your book
Tell us your strategies, brokers and systems. We will map the middle office functions you need and show how the team would run them.