BDO’s Asset management team provides the full range of audit and assurance, as well as other expert services on a range of complex issues. The asset management industry is rapidly changing and increasing in complexity due to global financial reform, complex regulations, advancements in fintech and market pressures for transparency.

A combination of talent and resources gives BDO’s advisers the ability to anticipate and adapt to the rapid and accelerating changes of today’s global economy and to advise our clients around mitigating risk and responding to regulatory changes accordingly. Our specialist teams bring business advantage to our clients with a range of experience across the asset management industry, which includes detailed knowledge of processes, operations, regulatory and internal controls.

In a constantly changing macro and regulatory environment, the ability of asset managers to respond rapidly to the information needs of stakeholders is becoming increasingly important. To stay ahead of the pack, investment in new and emerging cloud and machine augmented technology can pave the way to improve downward pressure on margins and differentiate from competitors. At BDO financial services we are investing in technology to ensure we can fully support and advise our clients in this age of digital transformation.

A number of our asset management clients are telling us that that some companies are looking at alternatives to raise capital, for example through debt and / or equity in the private capital market. This results in their not having to face the challenging environment and exposure that a listing brings to management – but this in turn potentially causes complexity when these investments are to be valued. BDO’s advisers believe that a combination of our Corporate Finance expertise and our 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 a deep understanding of the regulations governing the industry, as well the guidelines and standards under which collective investment schemes (CIS) are managed and operate. As a result of our understanding of how the industry operates and years of experience in this sector, 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. Our audit approach is further supported by an experienced and highly skilled valuations team.

Our services include:

• 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 CIS Control Act
• Assessment for compliance with Regulation 28 of the Pension Funds Act, for CISes which are marketed as such.

Hedge funds

BDO’s financial services team has the relevant experience to guide our clients through a complex industry environment comprising both the regulated and unregulated hedge fund sectors. An in-depth understanding of the various fund structures, investment models, fee arrangements and performance fee nuances lead to a focused and tailored audit approach which, is supported by our specialist valuations group. Being at the forefront of industry developments means 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.

Private Equity

BDO in South Africa has the knowledge and expertise in both local and global private equity industries, financial reporting frameworks and the country-specific regulatory and economic issues that 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.

Global investment performance standards (GIPS)®

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.

Stockbrokers

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). We 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 partners’ 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.

Investment administrators

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.

ISAE 3402

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, this includes early warning of issues identified, accompanied by open and clear communication throughout the duration of the engagement.

There are two types of ISAE 3402 reports and our versatile audit methodology focuses on both types:

• 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
• Our clients’ external auditors can place reliance on the controls if operating effectively over a specified period, thereby reducing disruption at the respective clients’ organisations.