HFMWeek Catches Up with Eze Castle Integration’s Managing Director, Vinod Paul, To Discuss How Technology Can Help Tackle the Challenges Facing Start-up Firms.
HFMWeek (HFM): Are you seeing a healthy market for new hedge fund launches in the US?
Vinod Paul (VP): 2013 and 2014 were very strong years for start-ups in the US. Our US pipeline is also quite healthy for 2015 in terms of start-ups, which is a little different to Europe, where there aren’t as many launches. In terms of overall US business, 50% of the clients we brought on in 2014 were start-ups; this is up from 40% in 2013. There are several factors that have contributed to this, some that we cannot control, such as how the wider market performs. Institutional money coming back into the market is causing some of the start-up activity. Many of the start-ups we have been able to bring on were funded by larger institutions. HFM: How are today’s start-up funds different than those from five years ago?
Trying to avoid social media is increasingly futile, even for hedge funds. We live in a ‘sharing’ culture, so it’s time to embrace it and control (or at least contribute to) your online profile.
In its 2015 predictions article, third-party marketing firm Agecroft Partners listed increased social media usage by hedge fund managers and investors as a key trend, and here’s why:
“…Social media is being used for research, to build stronger relationships and help promote a firms’ brands in the market place. Some managers are also using it to promote their investment ideas in order to create a catalyst for a security. The most commonly used social media is LinkedIn, which is broadly used throughout the industry. In 2014, Twitter was used by many people in the industry for the first time and this is expected to increase in 2015. Finally, we are beginning to see some use in YouTube where organizations are creating videos that can be posted on websites, distributed through social media or emailed to a distribution group…”(Source: Top Hedge Fund Industry Trends for 2015 by Don Steinbrugge)
Getting the Basics Right: LinkedIn
If a hedge fund manager has time for only one social media outlet, LinkedIn is the one. Over 332 million people use LinkedIn, and new members join at a rate of 2 per second. Additionally, 40% of users check LinkedIn daily (source: Digital Marketing Ramblings).
And from a search perspective, your LinkedIn profile is almost guaranteed to come up on the first page of results for a Google search of your name. So let’s look at how hedge fund managers can enhance their LinkedIn profiles.
LinkedIn Profile Basics
You need a picture. People won’t take you seriously or want to connect with you if they can’t see what you look like. Plus, your profile is 11 times more likely to be viewed if you have a picture.
Write a summary. This is an open space that allows you to hone in on the key qualities, attributes and skills you want to highlight.
Include all (relevant) job experience. When you add your company, be sure it is linking to the firm’s LinkedIn page as this is an easy way to direct your connections back to your firm’s page after viewing your profile.
Add skills. From a personal brand perspective, adding skills is an easy way for people to find you.
It’s been quite a year, and as always, it’s hard to believe it’s over. In 2014, Hedge IT continued to thrive in its goal to provide advice and insight into hedge fund technology and operations. The financial services industry is evolving at a rapid pace, and we’re evolving our topics and conversations to keep up. Across 100 blog posts this year (not including this one), almost half of them – 49 to be exact – addressed the topic of security, which is undoubtedly one of the single most important focus areas for hedge funds and investment firms today. In addition to security, we covered everything from tips for starting a hedge fund to avoiding cloud mistakes to hiring for IT roles.
Looking ahead to 2015, we plan to keep the conversations tuned in to what really matters to hedge funds when it comes to technology, and we’ll share as much content as we can in as many formats as we can. But before we get too ahead of ourselves – it’s not quite 2015 yet – let’s take a look back at 10 of our most popular blog posts from 2014.
Less than ten short years ago, Eze Castle Integration saw a shift in the market and gap in the cloud space. Firms had to hire multiple third-party vendors to fully outsource their IT needs, public cloud environments fell short of hedge fund security demands and service level contracts varied drastically. Fast-forward to today, and that very same spark of ideation has progressed to completely revolutionize hedge fund IT. In the spirit of Throwback Thursday, today we're reflecting on the journey and growth of our very own Eze Private Cloud.
In 2005, Eze Castle built and deployed the first hosted cloud platform for a large hedge fund based in New York City. By 2007, 18 funds spun out from the initial firm, each selecting Eze Castle as their trusted cloud platform provider. The following year, the company began building the foundation for the Eze Private Cloud. The same year marked the opening of Eze Castle’s hedge fund hotel in New York City. The environment, which supported more than 200 users, united the company’s cloud computing platform and fully managed office suites for startup funds.
As technology changes, it can become overwhelming to keep up with. That’s why we’ve decided to take a step back in today’s blog article to go over some of the basic vocabulary involved in cloud computing. Here are 10 terms to get you started:
Services or applications that are hosted in a web-based repository known as the “cloud”; the service is often hosted by a third-party provider who then provides access to that service to users on an on-demand basis via a network connection. This alleviates that firm from having to purchase and maintain costly infrastructure in-house.
A facility used to house computer systems and associated components, such as telecommunications and storage systems; typically includes redundant or backup power supplies, redundant communications connections, environmental controls and security features. The Update Institute classifies data centers into four tiers based on the percentage of availability and uptime.
The results from our Global Hedge Fund Technology and Operations Benchmark Study are in and here is a snapshot of the 2014 findings. You can find the complete report here. We surveyed 279 buy-side firms across the United States, United Kingdom and Asia in order to discover their front, middle, and back office technology and application preferences.
Respondent Profile[Hedge Funds by Type]All survey respondents fell into the following categories within the financial industry: hedge fund (58%), asset/investment manager (13%), private equity firm (3%), fund of fund (3%), and family office (3%). Additionally, 13 percent fell into an ‘other’ category, which included financial firm types such as venture capital, advisory, fund management, quant and wealth management.
Firms surveyed fell into three asset groups: thirty-three percent (33%) reported their assets under management (AUM) as less than $100 million; twenty-eight percent (28%) fell between $101 and $500 million; and the majority (39%) reported over $500 million AUM.
In regards to investment strategy, long/short equity continues to dominate as the most favorable with 50 percent (50%) of respondents reporting this to be their primary investment strategy. Additional preferred strategies include credit (8%), fixed income (6%), emerging markets (5%), event driven (4%), and distressed debt (3%). Twenty-four percent (24%) of firms fell into an “Other” category that included a wide variety of investment strategies such as commodities, derivatives, merger arbitrage, relative value, securities, global macro, and long only. In 2014, the top primes employed by firms are Goldman Sachs, Morgan Stanley, JP Morgan, Credit Suisse and UBS (same as 2013 results).
In it's fourth year running, our Global Hedge Fund Technology Benchmark Study reveals the top technology systems and applications used by investment management firms around the world. And while we aren't due to officially release the results until tomorrow - register for our webinar to hear them live - we thought we'd share a little sneak peek in the form of an infographic.
Take a look below and discover how your hedge fund and investment management firm peers are using technology to power their firm operations.
Categorized under: Hedge Fund Due Diligence Launching A Hedge Fund Cloud Computing Security Hedge Fund Operations Hedge Fund Regulation Infrastructure Communications Outsourcing Software Trends We're Seeing Videos And Infographics
Last week, we co-hosted another exciting Hedge Fund Startup event with KPMG in New York and had a great turnout of fund managers looking to learn more about everything from legal and tax implications to technology must-haves and capital raising strategies.
Since technology is clearly our forte, we wanted to share some of the key takeaways from our “Achieving Institutional-Grade IT” panel, featuring speakers from Evercore Partners, Bank of America Merrill Lynch and, of course, Eze Castle Integration. Here are the highlights:
State of Emerging Manager Market
The hedge fund startup market is healthy, and investors’ appetite for emerging managers is strong
Investors are attracted to nimbler, hungrier nature of emerging managers.
Key Priorities for Startups in 2014/2015
Select the right service providers to support your business.
Understand your firm’s vulnerabilities and exposures.
The operational due diligence process is changing, therefore firms need to understand the protections they have in place to secure investor assets.
The following article is from guest contributor Raj Bakhru, CFA, Chief Executive Officer at Aponix Financial Technologists.
At Aponix Financial Technologists, we often find ourselves speaking to our clients about the risks around USB storage device access of external drives or USB keys. While convenient file transfer tools, they can also be quite dangerous to a firm's operations. Our arugment for blocking access historically has been two-fold:
Intellectual Property (IP) concerns: It's obviously very easy for confidential or proprietary data to leave the firm via USB keys.
Malware concerns: It's easy for infected malware to enter the firm via files existing on a USB key brought from home or other unmanaged or unprotected systems.
Earlier this month, though, the "BadUSB" exploit was released to the public. A few months ago, white hat (ethical) hackers demonstrated that USB key firmware could be overwritten and effectively sabotaged to allow the USB key to perform some very malicious actions, e.g. taking control of the computer's mouse and keyboard, among other things. USB keys affected by this exploit become weapons of destruction and data breaches, and, as the hackers demonstrated, the malicious code can be extremely well-hidden on the USB key. In fact, given the exploit resides on the USB key's firmware, deleting all the contents of the USB key has no impact on removing the malicious code. It is currently unknown how many USB devices suffer from this vulnerability, but the expectation is that it will be years before device manufacturers correct devices and the existing vulnerable devices are no longer in use.
Categorized under: Launching A Hedge Fund
We are excited to be sponsoring the 2014 EzeSoft Client Conference later this week in Boston. For those of you who aren’t familiar, Eze Software Group is the owner of the order management system, Eze OMS, which is frequently used by hedge funds and asset managers across the globe.
As a preview to this week’s conference, we thought we’d dial it back to basics a little and explain exactly what an order management system is and why it’s a critical piece of software for many investment management firms today.