Manage Fund of Funds Cash Allocations

You can use the Fund of Funds Cash Allocator in Eagle’s mutual fund accounting solution to calculate and allocate cash flows for each underlying security held in a fund of funds (FOF) structure. You can use a fund of funds structure when a fund buys into a mutual fund, for example. You set up the underlying fund as a security in Eagle Accounting, and the system considers the mutual fund's NAV as the market price of the security.

Fund of funds cash allocation processing enables you to allocate a master fund’s cash inflows and outflows across its underlying fund investments. The available allocation methods use the market value of its underlying funds. The system calculates the investment ownership in each fund of funds by dividing each underlying security’s market value to the total market value of all underlying securities. Given the nature of the FOF fund structure, it is necessary to allocate the master fund’s cash inflows and outflows across the underlying funds, utilizing set allocation ratios. Several fund of funds allocation methods are available. The system puts the trades created by the fund of fund allocation process into a pending transaction status, allowing you to review the trades and manually release the trades to the STAR accounting engine. Releasing the pending trades is optional. You may prefer to receive the trades from an upstream system at a later time.

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