Advent Software Hires Hedge-Fund Software Pro

Advent Software has appointed Thomas Kerns director of Axys Partner, a hedge-fund accounting product which Advent acquired in December 1996 when it bought Bold Software for 35,000 shares of Advent common stock (IMT, December 6, 1996).

Bold's founder, Charles Record, is working from Advent's headquarters focusing on the technical aspects of enhancing Axys Partner, Advent officials say.

Kerns previously was a vice president at Donaldson Lufkin & Jenrette responsible for managing DLJ's software services for prime brokerage hedge fund clients, developing interfaces to them and redistributing Bold's product under a bulk license agreement Bold had with DLJ, which Advent is currently honoring.

The San Francisco-based supplier of investment management software hopes that with the addition of Kerns, 38, Advent can garner significant share of the expanding market for so-called "layering accounting" software, which, done manually, is a tedious process of accounting for hedge fund cash flows and tax liabilities. It may even help Advent sell some of its other products to hedge funds too.

Hiring Kerns was clearly the next logical step in Advent's strategy to position itself for a run at the two leading hedge-fund accounting system vendors: Hedgeware of Mt. Kisco, NY and by Shepro Braun Systems of Chicago.

The acquisition the Bold, Record and Kerns comes at a time when the number of hedge funds is increasing.

New funds are being launched by former brokers and analysts who are attracted to potential returns of 20 per cent a year, Kerns says. New off-shore funds are proliferating to satisfy investors interests in avoiding US taxes. And growth of limited partnerships is being further fueled by Federal legislation enacted last year--the National Securities Markets Improvement Act of 1996--which relaxed regulation of hedge funds, allowing more limited partners to invest without filing disclosure statements with the Securities and Exchange Commission.

A certified public accountant and former chief financial officer, Kerns jumped to the software side, joining Hedgeware, where he served a year and a half as director of client support.

"At Hedgeware it was all technical in nature dealing with the development of the product," he says, but running his own consultancy and working for DLJ helped him hone his managerial skills.

"That's where I gained the experience of how to run a division, conduct myself in a more managerial and marketing and sales role," he says. Among his consulting clients was the DLJ unit he ultimately joined: the investment management support group of DLJ's prime brokerage unit.

Based out of the Advent's New York City office and reporting to Michael Morini, vice president of sales, Kerns is responsible for the business management for Axys Partner, which includes product services, implementation and support. He says Advent plans to strengthen Axys Partner's tax reporting functionality and interface to Axys--Advent's portfolio management, accounting and reporting system.

Tentatively scheduled for a mid-year release, the new version will offer processing, performance and multi-currency enhancements. Tax reporting improvements will include fully automated IRS schedule K-1 filings required for limited partnerships.