Regs, Investor Scrutiny Drive Hedge Fund Focus On Technology

Apr 20 2011 | 2:24pm ET

With new regulations on the horizon and investors clamoring for increased transparency, alternative investment firms are focusing on technologies that help them manage, protect and more effectively use their data, according to a new study by Eze Castle Integration.

The IT services and consulting firm questioned 223 hedge fund and alternative investment firms about their use of technology in both front and back-office operations.

According to the survey, the “vast majority” of front office employees get their market data from Bloomberg, 43% use multiple vendors for analytics, and the most widely used OMS/EMS was BNY ConvergEx’s Eze (In 2006, BNY ConvergEx Group acquired Eze Castle Software, one of four spinoffs from the Eze Castle “family” of companies, another of which was Eze Castle Integration.)

Investor scrutiny and the Dodd-Frank Act are combining to encourage middle and back office adoption of email and instant messaging archiving.

According to the survey, Advent is the most popular portfolio accounting vendor among middle and back office respondents, although the market is diverse.

Respondents also use a broad range of solutions for risk management, although 19% cited either Microsoft Excel or a proprietary in-house system.

Blackberrys are used by a whopping 95% of respondents, but the survey found signs that iPhones, iPads and other tablets could make inroads in future.

Of the firms surveyed, 56% had AUM under $250 million, 17% had AUM between $250-750 million and 27% had AUM above $750 million. Most have one location; 35% use a multi-strategy approach; and when it comes to primary and secondary prime brokers, Goldman Sachs, Morgan Stanley, JP Morgan and Credit Suisse maintain a stronghold over the majority of firms.


In Depth

Q&A: Neil Azous Talks Global Macro Investing

Nov 24 2014 | 12:41pm ET

Neil Azous is the founder and managing member of Rareview Macro, an advisory firm...

Lifestyle

Griffin Selling Chicago Apartment

Nov 26 2014 | 11:40am ET

Citadel Investment Group’s Kenneth Griffin is making clear to his estranged wife...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.