Managed Investment Operations
Fund reconciliation services that resolve breaks, not just list them
A reconciliation that produces a list of breaks is half a job. Fundtec’s reconciliation team finds the cause, chases the counterparty and closes the item.
In one minute
Fund reconciliation is the daily comparison of a fund’s internal records with prime brokers, custodians, counterparties and the administrator to confirm that cash, positions and trades agree. Fundtec provides fund reconciliation services as part of its managed investment operations, on our platform with a dedicated team: cash, position, trade, OTE and three-way reconciliations, with break aging, root cause analysis, escalation and counterparty follow-up.
Managers and administrators who need dedicated operating capacity inside their own systems, without adding permanent headcount.
A 30-minute scoping call, then a written plan: scope, the transition timeline and indicative pricing. No generic proposal.
What fund reconciliation covers
Reconciliation is the control that tells a manager its records are right. Every day, the fund’s internal books, the prime brokers and custodians that hold the assets, the counterparties to its OTC trades and the administrator that keeps the official books each produce their own version of cash and positions. They should agree. When they do not, something is wrong in at least one of them.
Fundtec runs reconciliation as part of its managed investment operations: our platform and a dedicated team, with analysts who know your brokers, instruments and recurring issues. The team does not stop at matching. It investigates each break, identifies the root cause, contacts the counterparty and tracks the item to closure.
Types of fund reconciliation
| Reconciliation | What is compared | Typical frequency |
|---|---|---|
| Cash reconciliation | Internal cash ledger vs bank, prime broker and custodian statements | Daily |
| Position reconciliation | Internal holdings vs prime broker and custodian holdings | Daily |
| Trade reconciliation | Internal trades vs broker confirmations and clearing reports | Daily |
| OTE reconciliation | Open trade equity on futures vs clearing broker statements | Daily |
| OTC and collateral | Trade terms, valuations and collateral vs counterparty statements | Daily or weekly |
| Three-way reconciliation | Street (brokers, custodians) vs administrator vs internal books | Daily or on NAV cycle |
| Administrator reconciliation | Internal books vs administrator’s NAV and trial balance | Monthly |
How a break is managed from identification to closure
Identify
Data from all sources is loaded and matched; unmatched items become breaks with an amount, age and category.
Investigate
Analysts trace the break to its source: timing, pricing, booking, corporate action, fee or counterparty error.
Assign and age
Each break gets an owner and expected resolution date. The break-aging log shows items by age bucket.
Liaise
The team contacts prime brokers, custodians, counterparties or the administrator directly to agree a correction.
Escalate
Breaks past agreed thresholds of age or value are escalated under the matrix to the client’s operations lead or COO.
Close and prevent
Corrections are verified in the next reconciliation. Recurring root causes are fixed in SSIs, mappings or procedures.
What makes break management work
- 01
Root cause, not symptoms
Every break is categorized. Monthly trend analysis shows which brokers, instruments or processes generate the most breaks so they can be fixed at source.
- 02
Counterparty liaison
The team works directly with broker and custodian service desks, so your team is not spending mornings on email chains.
- 03
New recon builds
When you add a prime broker, custodian or counterparty, the team maps the new files and builds the reconciliation as part of the service.
- 04
Controls
Maker-checker review, four-eyes sign-off on write-offs and adjustments, and a full audit trail in your systems.
Reconciliation deliverables and cadence
| Deliverable | Cadence | Purpose |
|---|---|---|
| Cash, position and trade recs | Daily | Confirm books agree with the street before trading and NAV |
| Break report with owner and next action | Daily | Give operations a single view of open items |
| OTE and collateral recs | Daily | Confirm margin and collateral balances |
| Break-aging log | Weekly | Track resolution and escalate aged items |
| Root cause and trend analysis | Monthly | Reduce recurring breaks at source |
| Administrator and three-way sign-off | Monthly or per NAV | Support NAV approval and audit |
| SLA report | Monthly | Performance against agreed timeliness and accuracy |
What we need to start reconciling
- Read access to bank, prime broker, custodian and clearing broker statements or files
- Access to your internal books (PMS, OMS or accounting system)
- Administrator reports for three-way and NAV reconciliations
- Current break list and aging, if one exists
- Escalation contacts and thresholds
- Counterparty service desk contacts
Reconciliation as the foundation of the middle office
Clean reconciliations are what make shadow accounting, daily P&L and administrator oversight possible. Fundtec’s recon team works alongside our trade operations and treasury operations teams, so a break found in reconciliation reaches the person who can fix it the same day. For firms adding volume, see scale your 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 Reconciliation
Didn’t find your question? Put it to a specialist directly.
Ask a specialistFrequently asked questions
What is a three-way reconciliation for a fund?
A three-way reconciliation compares the same positions and cash across three sources: the street (prime brokers, custodians and counterparties), the fund administrator and the manager’s internal books. Each two-way comparison can hide an error; comparing all three shows which record is wrong. Fundtec runs three-way recs daily or on the NAV cycle.
How does Fundtec handle reconciliation breaks?
Every break is categorized, assigned an owner and aged. The team investigates the cause, contacts the broker, custodian, counterparty or administrator directly and tracks the correction until it appears in the next reconciliation. Items that pass agreed age or value thresholds are escalated to the client under a documented escalation matrix.
Which reconciliation tools do you work in?
Under managed investment operations, reconciliations run on our proprietary platform, Tychi, which has matching, break management and controls built in, so there is no separate tool to buy. If you want our specialists to work in a reconciliation tool you already own, that is our middle-office investment operations model. The break-management standards and reporting are the same either way.
Can you add a new prime broker to our reconciliations?
Yes. When a client adds a prime broker, custodian or OTC counterparty, the team maps the new statement files, builds the reconciliation and runs it in parallel until it is reliable. This is part of the managed investment operations model, so new counterparties are absorbed without renegotiating the contract.
What is OTE reconciliation?
Open trade equity reconciliation compares the unrealized gains and losses on open futures positions in the fund’s books with the figures reported by the clearing broker. Differences usually come from settlement prices, contract multipliers or missed trades. Fundtec reconciles OTE daily because it drives variation margin and cash.
How quickly are daily reconciliations delivered?
Delivery times are set in the SLA and depend on when prime broker and custodian files become available. With 24/5 coverage from delivery centers in India, most clients receive daily cash, position and trade recs, with breaks explained, before their own business day starts. Fundtec reports performance against the SLA monthly.
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