Hedge Fund Question of the Week – Summer Edition – No. 3


Answer:  IBOR that can also produce ABOR.

A firm ought to know in real time what its portfolio(s) look like, including current positions and available cash.  This information is critical for a number of functions, including investment decisions, operational risks and compliance.  Tracking this information is particularly critical for firms with multiple managers, portfolios, offices and complex products.  Generally speaking, a firm’s real-time portfolio(s) composition is referred to as its Investment Book of Record or “IBOR”.  Various proprietary and third-party systems have been created to collect and display IBOR.

However, the information collected to form a firm’s IBOR isn’t necessarily the same as the portfolio information that forms a fund’s official accounting records.  That information is referred to the Accounting Book of Record or “ABOR”.  It’s typically the case that IBOR and ABOR do not reconcile perfectly.  So firms thinking about a new system or updating an existing system should understand the differences and whether an IBOR system is also capable of producing ABOR.