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SGGG Fund Services Inc. began operations in 1997. Its beginnings were modest, with the Fund Valuation functions being performed for a single hedge fund. After quickly out-growing the initial office space at St. Clair and Yonge, the business re-located to King and Yonge. Soon more space was needed and there was a short move to another area building in 2009, when the company had grown to about 35 employees. By this time the affiliate companies SGGG Cayman and SGGG Malta, as well as the AlphaDesk portfolio management system company, had all begun to mature. In 2012 we fully launched our in-house Fund Accounting and Unitholder Recordkeeping system named DIAMOND. By 2016 the firm had 80 employees and obtained the current long-term premises at King and York. Today we are pleased to be the largest privately held fund administration firm serving the Canadian market.
We provide two main groups of services.
Fund Valuation and Accounting services include:
- Striking of fund NAVs and prices.
- Management Fee, Performance Fee (including Series Accounting) and Expense calculations.
- Income distribution and tax allocation calculations.
- Working with the Auditor of the fund.
- Semi-Annual and Annual Financial Statements.
- Tax Return for the fund.
- HST Return for the fund.
- MRFP Reporting for Prospectus based Trusts.
- Direct data feeds from most major Prime Brokers and Custodians.
- Third-party price and performance reporting.
- PFIC Reporting data for US based fund Tax Books.
Unitholder Recordkeeping and Fundserv services include:
- Fully compliant and true real-time Fundserv data validation and processing.
- Investor account maintenance, transaction processing and non-financial updates.
- Investor communications including fully compliant CRM2 Account Statements and Transaction Confirmations (with automated email delivery option).
- Investor annual tax slips production and delivery.
- Full Print and Mail services for any volume of output.
- Preparation of 45-106F1 Report of Exempt Distribution for Provincial Regulators.
- Fundserv Trust Account Banking and Reconciliation.
- ‘Direct’ Investor payments processing via EFT, cheque or wire.
- Fund Expense Payments administration
- Data API for export to Fund Manager Databases or CRM systems.
- Commission and Trailer Fee Processing.
- Fully automated DSC and ERF administration for investor redemptions.
- Private Equity fund administration and Capital Call processing, as well as separate tracking of ‘Committed’ and ‘Invested’ Capital amounts.
Most fund managers in Canada choose to outsource at least some if not all of their fund administration needs. This allows them to focus on what they do best – managing portfolios and collecting AUM. While the needs of a fund manager can vary greatly, specific reasons for outsourcing to FSI include:
- The desire of Investors, Auditors and Regulators to have critical fund management operations functions performed by a trusted, professional and fully independent third-party.
- The substantial time and real-dollar cost of having sufficient in-house expertise and systems to effectively manage the complex administration processes.
- To serve investor best-interests by providing a premium level of service at the lowest possible cost.
- For smaller funds, to benefit from the same top systems and people as top tier fund managers.
- To reduce risk in the execution of fund management operations.
FSI is a truly unique service provider in the Canadian marketplace. Some of the reasons why include:
- We are privately held and completely independent.
- We are the largest non-bank administrator by any measure.
- We have all the ‘bells and whistles’ for technology and business processes of our bank competitors, while at the same time we excel at ‘ease of doing business’ and speed of execution.
- We have the greatest number of unique fund manager Clients.
- We have more fund manager Clients connected to the Fundserv Network than any other provider.
- We enjoy helping start-up managers reach their goals – we can also administer a large family of daily valued mutual funds. We are scalable and well positioned to work with Clients of any size, with a diverse range of needs.
- You have full true real-time inquiry access to your data via our DIAMOND system web portal. We don’t hold your data hostage – there is no report our staff can run that our Clients cannot.
- We administer the majority of alternative products and Limited Partnerships in the industry.
- We are the only administrator utilizing an in-house system that supports all of the Fund Valuation, Accounting, Financial Reporting, Tax Work, Unitholder Recordkeeping and Fundserv functions within a single platform. This gives us greater flexibility on development requests and fee structures.
We have a unique de-centralized service delivery model, intentionally void of dedicated Relationship Manager or Business Development roles. You deal with our executive team through initial inquiry to new fund launch or conversion-in – there is no gap between promise and delivery. And, you have access to the operational teams working on your funds – you are encouraged to contact our front-line staff directly to quickly and easily get the answers you need.
FSI built, owns and maintains its own software named DIAMOND. This powerful system is utilized to provide our services in a well-controlled and highly automated manner. The system was purpose built to serve the FSI Client base – the system is not leased out to third-parties. There is no ‘integration’ of multiple systems or databases – all functions are performed on the same platform. The system has full on-line audit of all data elements and stamps before and after values, with the date/time and the user ID. Data for all public securities is imported automatically via price feeds from both Bloomberg and Reuters. A flexible API is available for Client export of data on an automated recurring scheduled basis. All Fundserv and ‘Direct’ investor account and transaction data is loaded and processed automatically without the risk of re-keying errors. A large in-house technical team of developers, business analysts and documentation specialists maintain the system under the direction of our CTO. Enhancement releases are implemented every 8-12 weeks after rigorous acceptance testing by our various operations teams. Client input is welcomed and ideas for improvements are scoped out, discussed and prioritized accordingly.
FSI has engaged PwC to perform detailed and extensive testing and audit of all our internal controls on an annual basis for both business processes and system development life-cycle. The result is a comprehensive report called a CSAE 3416 / ISAE 3402. The company has never had a ‘qualified’ report issued (ie. no material exceptions have ever been noted). The report is available to Clients annually in early January – this can then be provided to the Auditor of the fund for them to rely on, which reduces the time and therefore cost of fund audit services for our Clients. In addition, we had Deloitte perform a Cyber Security Vulnerability assessment on our systems and network to help ensure our data stays secure.
FSI recognizes that the continuous operation of our operations and systems is critical to our ability to perform our fund administration services, as well as to meet our Client’s needs. Plans relating to our systems are extensive, well documented, and tested at least annually by FSI in cooperation with all critical external vendors. Our recovery plans are included in our annual controls audit. Our Production machines are maintained in a primary offsite co-location with a secondary server in another data centre located to the west of Toronto. Ongoing mirroring of data from the production server to the secondary server maintains current data on both systems. In addition, we have a dedicated ‘Hot-Site’ located to the north of Toronto. We are the sole tenant of this secondary office space. The site has its own IT and Telecommunications infrastructure, desktop computers and office supplies for all workstations, additional network connections for laptop computers, and is on a separate power grid from our head office. The site is ‘always-up’ and connected to our backup servers at the co-location, allowing us to send as many staff as required to deliver services from the site, seamlessly, at any time.
No. We are not a CDS participant. We encourage our Clients to select the firm best suited to meet their needs holding assets and trade execution. We have existing working relationships with all the major firms in this space, with fully automated and secure data links to the majority of them.
No. We are not a Trust Company. We encourage our Clients to select the firm best suited to meet their needs for ‘Direct’ investor self-directed RSPs, RIFs, TFSAs etc. We have existing working relationships with all the major Trust Companies and Correspondent Brokers in this space, with established business processes with the majority of them.
All of our Clients enjoy Service Agreements with no term or lock-in clauses. Agreements have an effective date and never expire, ensuring there is always a current Agreement in place. We pride ourselves on the fact that we do not lose Client relationships based on service or price – our Clients stay with us because they want to, not because we make it difficult for them to leave. Our Clients can terminate at any time with reasonable notice and without financial penalties. This ensures they always receive our full attention to any concerns raised and keeps us working together towards our shared goals. Services or fees can quickly and easily be changed by simple updates to a supporting Schedule.
Our fee model is fair, consistent and simple. Pricing for services is straight-forward and all-inclusive – there is no long list of ‘additional’ piece rate fees counted and added to monthly invoices. Clients always know how much they are paying and for which services. We do what we can to reduce fees for small or start-up funds – at the same time where economies of scale exist we pass these along to larger clients. Where practical, Clients can opt to perform certain services themselves if they wish, while most recognize our efficiency and expertise creates a compelling cost-benefit case for all services we offer that are required by a particular fund. We have no ‘box’ clients must fit into and we enjoy problem solving to be able to accommodate unique products. We avoid basis-point arrangements and instead quote based on the amount of work effort involved, irrespective of AUM levels.