Tuesday, 21 October 2014
Last updated 28 min ago
Jan 18 2007 | 10:20am ET
Rising fees notwithstanding, many smaller hedge funds rely on an old standard for their risk management systems, Microsoft Excel, according to a new study from buy side research firm Carbon360.
“Funds under $4 billion rely on Excel or prime broker-delivered risk solutions,” said Brian Shapiro, president of New York-based research and consulting firm Carbon360. “The larger risk systems, which can cost up to $4 million to buy and install are completely unaffordable for the smaller funds.”
Instead, they’ve turned to the ubiquitous, more affordable spreadsheet (retail price: $229). According to the new study, fully 29% of hedge fund risk management is still based in Excel leaving a lot of room for growth in sales of risk systems.
“A majority of interviewed firms advised that their primary risk systems have all been built in-house,” Shapiro said. “This leaves open the opportunity for many of the vendors mentioned in this report to see strong sales in the years ahead.”
Carbon360 expects spending on risk and portfolio management systems will rise 17.36% this year to $5.25 billion and to $9.68 billion by 2011, driven by demand from alternative firm clients.
“We do see a trend in the uptick in demand for risk systems driven by institutional investors seeking greater transparency and risk controls,” Shapiro said.
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Sep 30 2014 | 9:29am ET
The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…
Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...