Every hedge fund faces the challenges of competition, regulation and reporting. Increasingly, hedge funds are adopting the latest innovations of the digital age to meet these challenges.
Although some firms choose an in-house approach, many more make the decision to outsource because information technology is always evolving. As a result, keeping pace with digital developments requires a substantial investment, not only in hardware, but also qualified personnel. These are costs which hedge funds seek to mitigate. More to the point, information technology (IT) is not a hedge fund’s core business.
These facts, in concert with rising threats posed by hackers, terrorists and hostile foreign government entities, have driven many in the hedge fund industry to the external information technology firms which specialize in the technology infrastructure services hedge funds and other alternative investment firms require in day-to-day business operations.
Learning About Hedge Fund Technology Solutions
In this competitive environment, no hedge fund can fail to address the concerns and the expectations of investors, as they pursue answers to questions that are key to achieving their due diligence goals. To that end, Hedge Fund Marketing Association has partnered with Eze Castle Integration to bring you a series of training sessions, the first of which explores the considerable benefits technology brings to hedge funds interested in providing its investors with world-class service.
What Investors Are Asking About Technology
The first session focuses on investor concerns in the context of their due diligence obligations. The discussion centers on the drivers behind increased investor demands: the evolution of the due diligence process, from the investor’s perspective as well as the viewpoint of the hedge fund; the aspects of the business and its operations that receive the greatest focus and how hedge funds can meet these increasing demands while preserving its assets.
It is clear that increasingly sophisticated technology is a key driver for the outsourcing we have seen in the hedge fund industry.
As a result of this outsourcing, investors realize that they must have better insights into regarding third party relationships hedge funds have entered into. In turn, these relationships give rise to additional cyber security concerns and disaster recovery concerns. Add to these issues the increased concerns investors have with respect to regulatory compliance and one’s understanding of the investor’s paradigm begins to crystallize.
Getting the Edge
Given the increased scrutiny many hedge funds face, few can afford to dismiss the importance of investor concerns. It is vital that investors have the utmost confidence in the operational aspects of the firm, particularly in regard to information technology concerns.
Investors understand that fund managers can do little to control markets, but they do recognize their ability to vet the operational and regulatory integrity of a prospective fund. It is incumbent on the hedge fund to make the vetting process transparent and painless. That is a competitive edge over rival investment vehicles that hedge funds can ill afford to forego.
To learn about changing investor demand and available IT solutions, watch the first training session on Hedge Fund Technology Due Diligence.