Cogency sits in that place where Accounting meets Operations. Our goal is to have everyone in the organization, from the fund accountant and the portfolio manager to the client relations managing director, working off of a single version of the truth – each with their own ‘filter’. However, there are situations when the detailed accounting requirements conflict with the operational needs of the business, resulting in a proliferation of versions of the truth. Cogency's expertise and strengths is in resolving such conflicts.

Tracking lot-level liquidity on the portfolio and investor capital is one manifestation of this problem.

Portfolio liquidity – In the case where a fund uses average cost basis as their portfolio lot relief method, the classic accounting solution relieves a pro-rata portion of each lot upon redemption, leaving lots around forever. This really torments the portfolio manager who is tracking lot-specific liquidity.

Investor liquidity – In the case where accounting calculates investor's incentive fees as an aggregate of all lots, they traditionally keep an accurate investor-level balance but cannot provide lot level balances. While this works for accounting, it does not provide accurate values available for redemption at a given time if different lots have different liquidity terms.

Over the past 18 months, Cogency’s product managers have worked with clients, accountants, and advisors to solve this problem with custom lot relief and fee calculation methodologies that satisfy the formal and distinct needs of both the accountants and the portfolio and investor relations managers. These solutions allow our clients to maintain a single version of the truth that addresses the requirements of all stakeholders..