Our BDO Asset Management team provides the full range of audit, assurance as well as other expert services on a range of complex issues in the asset management industry that is rapidly changing and increasing in complexity due to global financial reform, complex regulations, advancements in FinTech and market pressures for transparency.
Our combination of talent and resources gives us the ability to anticipate and adapt to the rapid and accelerating changes of today’s global economy, advise our clients to mitigate risk and respond to regulatory changes. We aim to bring business advantage to our clients through our specialist teams with a range of experience across the asset management industry which includes detailed knowledge of processes, operations, regulatory and internal controls.
In the information age, the ability of asset managers to rapidly respond to the information needs of stakeholders, in an ever-changing macro and regulatory environment, is becoming increasingly important. To stay ahead of the pack, investment in new and emerging cloud and machine augmented technology can pave the way for asset managers to improve downward pressure on margins and differentiate themselves from competitors. Likewise, at BDO Financial Services we are making similar investments in technology to ensure we can fully support and advise our clients in this age of digital transformation.
We understand from our asset management clients that there appears to be a trend that companies are looking at alternatives to raise capital, especially through debt and/or equity in the Private Capital Market. In this way they do not have to face the challenging environment and exposure that a listing brings to management. This in turn will potentially cause complexity when these investments must be valued. We believe a combination of the BDO Corporate Finance expertise and the Specialised Valuations Group will ensure we can advise or express an appropriate view on these unlisted equity and debt valuations.
Collective Investment Schemes
We have the understanding of the regulations governing the industry as well the guidelines and standards under which Collective Investment Schemes (CIS) are managed and operate. Our audit approach and methodology focuses on the key risks relevant to the financial statements, internal controls over financial reporting and regulatory requirements for the CIS to remain compliant. This has been developed by our understanding of how the industry operates and years of experience in this sector. Our audit approach is further supported by an experienced and highly skilled valuation team (BDO Specialist Valuations Group).
Our services include the following:
- Financial statement audits, managed to meet regulatory reporting deadlines
- Valuations testing of 100% of the investment portfolios of the CIS being audited
- Assessment of compliance with Collective Investment Schemes Control Act
- Assessment for compliance with Regulation 28 of the Pension Funds Act, for CIS’s which are marketed as such.
The BDO Financial Services team has the relevant experience and expertise in both the growing regulated and unregulated Hedge Fund sectors to guide our clients through this complex industry environment. An in depth understanding of the various fund structures, investment models, fee arrangements and performance fee nuances lead to a focussed and tailored audit approach which is supported by our BDO Specialist Valuations Group. By being at the forefront of industry developments we can help our clients anticipate and comply with changing accounting, tax, and regulatory pronouncements as well as ensure that their operations and infrastructure are able to meet challenges and take advantage of opportunities.
We have the knowledge and expertise in both the local and global Private Equity industries, financial reporting frameworks and country-specific regulatory and economic issues private equity businesses are facing. From start-up funds to large financial entities, we understand the complexities and nuances of the private equity market including fund structures and their overarching business implications.
Our services include statutory financial statement audits, accounting for complex equity structures, accounting for business combinations, accounting for complex debt arrangements, identification of internal control issues, independent valuations, financial reporting, tax structuring and regulatory compliance.
Our team has global experience in verifying compliance with Global Investment Performance Standards® in line with the Investment Performance Council (IPC) guidance. Compliance with GIPS® has become a key differentiator in the industry, providing a consistent approach to investment managers in communicating their performance to clients. We aim to give managers, investors and regulators the confidence that risks and returns are managed, measured and reported effectively and transparently.
The Financial Services team understands the unique and complex issues our clients face in this shifting regulatory environment which is governed by the JSE Ltd (“JSE”). and thereby acknowledge that stockbrokers must constantly adjust operations and infrastructure in order to meet the demands of these new requirements. Our dedicated professionals possess the skill set to meet the unique economic, compliance and accounting challenges stockbrokers face while managing and handling money and customer assets.
Through our audit team and JSE accredited partner’s extensive experience, we offer detailed knowledge of processes, governance, internal controls and technical accounting. Our teams are experienced in carrying out assurance related work, including regulatory reporting as required by the JSE.
The investment administration industry is constantly evolving and changing due to local and global regulations around anti-money laundering, privacy and reporting. With the experience of our team, we will look to anticipate the impact of industry trends on our client’s business. Our engagement and project delivery is tailored to reflect the impact on our client’s business, driven by detailed knowledge of processes, governance and internal controls. We will focus on delivering quality audits and other related advisory services.
We will ensure our engagement delivery is tailored to meet our client’s particular needs within an overall framework. Designed to provide an efficient strategy focused on each control objective, early warning of issues identified, accompanied with open and clear communication throughout the duration of the engagement.
There are two types of ISAE 3402 reports. Our versatile audit methodology focuses on both types of reports. For the Type 1 report, we provide reasonable assurance on the service organisation's description of controls at a specific point in time, considered a “readiness” report. For the Type 2 report, we provide reasonable assurance on the fairness of the presentation of the description and on the suitability of the design and implementation as well as the operating effectiveness of the controls over a specified period.
ISAE 3402 engagements provide the following benefits:
- Identification of opportunities for improvement in the control environment
- Potential new clients are given external confirmation about our client’s control environment and the assurance that the controls are regularly evaluated
- Your client’s external auditors can place reliance on the controls if operating effectively over a specified period, thereby reducing disruption at our client’s organisations.
BDO Specialised Valuations Group
The BDO Specialised Valuations Group (“SVG”) are a team of professionals who have expertise in the valuation of financial instruments including the related credit risk exposure. Our valuations are primarily focused around unlisted debt and derivative instruments. This team operates within BDO’s Financial Services business unit in order to provide specialist skills, advice and audit support. Furthermore, BDO SVG provides advisory services to clients in line with our area of expertise and experience.
The capabilities of the team include valuation, accounting, auditing, and the review of operational, credit and market risks of the environments in which our clients operate and trade. BDO SVG is unique in that it combines the numerical and financial modelling skillset together with the knowledge of accounting and experience of auditing financial services clients. Our experience in the local and international financial markets enables us to provide quality support to our audit and advisory clients.
Our services include the following:
- Independent valuations and modelling of financial instruments, including unlisted debt and derivative instruments
- Independent assessment of yield curves and rates applied in valuations
- Independent valuation reports
- Evaluation of credit risk exposure through credit spread benchmarking and analysis
- Provide access to highly skilled resources to assist with hedge accounting and option pricing methodologies
- Improve audit efficiencies related to financial instrument valuations and related accounting
- Evaluation of IFRS 9 classification, implementation and measurement criteria including hedge accounting requirements and expected credit loss models
- Training on financial instrument valuations and IFRS 9 accounting
- Portfolio valuations of collective investments schemes and hedge funds.