Fund Accounting and Tax Reporting

Woodfield will also provide fund accounting and tax reporting services on a stand alone basis to managers who do not wish to outsource the full administration of their fund. Woodfield will gather financial data from brokers, banks and other sources and reconcile internal records with this data. We then enter all financial and investor transactions into our fund accounting system and calculate management fees, loss carryforwards and incentive allocations in accordance with the terms of the fund's offering documents and GAAP (US). All entries and financial statements are then reviewed to insure they are accurate and complete. Upon the conclusion of this process fund level financial reports, investor statements and performance table are sent to the fund by electronic mail.

Woodfield provides fast, accurate and cost effective fund accounting services to both large and small funds. Some of the key features of our service include:

• Maintenance of General Ledger and investor information 
• Daily, monthly or quarterly NAV and performance calculations
• Unitized values or capital accounts for each investor
• Multi-currency capability
• Customizable investor statements
• Investor statements that consolidate multiple funds on a single page
• Wash sale analysis and hot issue segregation
• Performance calculations for a single investment or groups of investments
• Internet access to investor statements
• Ability to reopen books at any time to account for new data
• Automatic calculation of management and performance fees and loss carryforwards

• Calculation of complex fee structures including hurdle rates or triggers
• Variable fee structures by client
• Automatic accrual of repetitive expenses
• Ability to process multiple share classes and master feeder structures
• Calculation of book and tax allocations with multiple allocation methods
• Segregation of investors by tax status
• Electronic interfaces with prime brokers or other counterparties
• Calculation of payments to sales reps
• Production of K1s and generation of federal tax return data
• Ability to produce estimated K1 data prior to year end

Financial Accounting

Woodfield maintains a complete set of financial books and records for each fund. Financial entries and allocations of income and expense are made based on the terms set forth in the offering documents for the fund as well as generally accepted accounting principles in the U.S.

At the conclusion of each reporting period, Woodfield enters or downloads all investment data into our fund accounting system along with other items of income and expense, investor additions or withdrawals and any non-repetitive accruals for the period. Although most funds require monthly or quarterly accounting, we also have the ability to calculate daily NAV’s and to accommodate intra-month closes for the purpose of admitting or redeeming investors. Depending upon the type of trading and other factors, investment data may be entered on a transaction or an aggregate basis.

Upon the completion of this process, our system produces a variety of internal fund level financial reports including:

   • Balance Sheet
   • Income Statement
   • Trial Balance
   • General Ledger Listing
   • Other specialized reports

These and other reports are then emailed to the fund manager in a PDF format file. Other reports are available or can be created based on individual user needs. The flexibility of our system enables us to produce these reports at the master fund level, for any subfund or any group of subfunds under the master level.

Investment Accounting

Woodfield has experience accounting for a wide variety of financial instruments including equities, options, corporate bonds, U.S. and non-U.S. governments and repos, futures and futures options, foreign exchange trading, cash contracts, derivatives and derivative options. For fund of funds managers, we also have experience valuing and reconciling derivative options that are used to obtain leverage.

At the conclusion of each accounting period, our staff enters the investment data for the previous period into our fund accounting system. Depending upon the needs and preferences of the fund manager, investment transactions may be entered on an aggregate basis, by individual lot or by using a combination of these methods. Whenever possible, investment data is downloaded directly from a prime broker into our software. However, we also have the capability of entering data manually when dealing with special transactions or hard copy reporting.

Although most funds require monthly or quarterly valuations, our system is capable of producing an NAV and partner valuations on a daily basis.

We produce a variety of investment reports including the following:

   • Position Listing
   • Closed Position Report
   • Performance Reports (with varying levels of detail)
   • Transaction ledger

All of these reports can be produced at the master fund level or for any subfund or group of subfunds under the master level. Other reports are available or can be created based on individual user needs.

Investor Accounting

Accurate and timely investor reporting is crucial to the long term success of a fund. The failure to provide accurate investor statements on a timely basis can have a negative impact on an advisor’s ability to raise and retain capital. However, the calculation of investor fees and the allocation of income and expense among investors is a highly complex task. Unlike mutual funds, hedge funds normally provide each investor with a capital account which makes these calculations much more difficult. By outsourcing the fund accounting responsibilities to Woodfield, managers are assured that their investor statements will be accurate, on time and prepared by experienced professionals.

Our fully integrated fund accounting system automatically allocates income and expense to each investor based on the terms of each fund’s offering documents and generally accepted accounting principles. We can accommodate funds with capital accounts as well as unitized fund structures, side pockets, multiple classes, hurdle rates, fee exceptions for individual investors and other complexities. Woodfield will create investor statements that are customized with regard to formatting, the level of detail or other cosmetic items. Duplicate statements can also be produced for investors who want their account information sent to an accountant or other third party.

Tax Preparation Services

Woodfield will produce federal K1 Forms subject to the review and approval of all allocations and footnotes by the fund’s audit and tax advisor. The first step in this process is the production of preliminary tax allocation reports for review by the fund’s audit and tax advisor. The fund’s tax advisor will then review the preliminary tax allocations and communicate any changes it deems proper. Upon receipt of this information we will make any requested changes, produce the final K1 Forms and deliver them to the fund by electronic mail.