This article first appeared in HFMWeek's Special Report: How to Start a Hedge Fund in the EU 2015.
HFMWeek catches up with Eze Castle Integration’s executive director, Dean Hill, to discuss the importance of selecting the right business service providers and the key technology factors new funds must consider when starting out in the EU.
HFMWeek (HFM): Are you seeing a healthy market for new hedge fund launches in the EU?
Dean Hill (DH): Yes. I think going into 2016 we will see an increase in terms of the amount of new hedge fund launches across the UK and European markets. Not only are these launches coming more frequently, but their size, structure and launch AuM is greater than anything we have seen in the last two-to-three years. It is certainly on the uptake.
As cloud services continue to become increasingly popular among hedge funds and investment firms, there still seems to be an area of confusion that surrounds this technology. We've talked through Why Cloud Computing is Right for your Hedge Fund and Understanding Public, Private, and Hybrid Clouds. Now, let's look at three key elements to consider within the cloud: Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS).
In a SaaS model, firms are offered a complete range of applications via the Internet, all of which are managed by the hedge fund cloud provider. This means firms can forego upfront investments in servers and software licenses and pay a predictable per-user, per-month fee.
PaaS is the delivery of a computing platform over the Internet. The PaaS model enables hedge funds to create Web applications quickly without incurring the cost and complexity of buying and managing the underlying software and hardware. Firms have control over the deployed applications and environment-related settings. PaaS is great for firms creating or managing their own applications or looking for testing and development environments.
Among the many technology decisions your firm will face during the launch phase is selecting the appropriate telecommunications needs to power daily operations. High-speed Internet and voice connectivity are necessary to access market data feeds, communicate with investors and facilitate trade orders and other investment decisions. To help you make an informed decision about your voice and Internet needs, we’ve provided a few suggestions below.
The Internet, of course, is an essential vehicle for collecting and distributing market data, as well as communicating with your clients, investors and partners via email. You’ll likely find four Internet access choices, depending on availability in your area. There are benefits and drawbacks to each, as described below.
Following is an excerpt from our 21-page Guide to Hedge Fund Technology Outsourcing. Skip ahead and download the full paper HERE.
As technology continues to grow as an important competitive differentiator for hedge funds and investment firms, funds are continuing to leverage technology outsourcing as part of their operational strategies.
A variety of circumstances in the industry have driven this move to outsourcing including:
The changing economic environment as a result of the financial crisis;
Increased investor focus on transparency and operational risk; and
Rising overheard costs relative to owning, maintaining and monitoring one’s own technology infrastructure.
Hedge funds and investment firms can leverage outsourcing in a variety of ways – everything from help desks to document management, virtual Chief Technology Officers and other staff to disaster recovery plans, FIX connectivity and more. But regardless of the specific elements being outsourced, funds should look for a few baseline requirements as part of an outsourcing solution:
A secure physical infrastructure;
Efficient and reliable communications;
Data protection; and
Vendor strength and stability.
The following article originally appeared on HFMTechnology.
Although we are faced with change on a daily basis, especially in the hedge fund technology industry, keeping pace with ongoing tech metamorphoses does not come easy for everyone. Fear, the biggest contributor of hesitancy toward change, masks the opportunities innovation presents. Fear is what leads to IT limbo, and in an ever-evolving technology landscape, this effect can be crippling. However, with the support of expert IT service providers, the pains and fears of migrations and upgrades are alleviated.
In this article, we’ll examine the recent end-of-life (EOL), of operating system (OS) Windows Server 2003, its resultant challenges and how to overcome them.
Doing Nothing and Risking Everything
Windows Server 2003 extended support ended on July 14, 2015; however, not all users have made the transition to Windows Server 2012 R2. Why are firm’s remaining on an out-of-support OS?
The primary influencers are fear and a lack of sense of urgency to replace a still functioning OS. In the case of users still utilizing the legacy application, the risks they face largely outweigh the benefits. By doing absolutely nothing, firms are risking everything. As patches and bug fixes are no longer being provided, hackers have an unguarded entrance to access a firm’s sensitive information, passwords and banking accounts. This not only increases the firm’s odds of being hacked, but also raises the gravity of ensuing damages should an incident occur.
Additionally, if a firm’s network does crash that’s still deployed on Windows Sever 2003, the odds of finding expert support become increasingly limited with each passing year. This is predominantly due to the industry’s forward marching nature. An outdated system will only continue to fall behind in the race of technology, trouble shooting will take longer, future applications will fail to run, or crash the server altogether, and the cost to migrate increases concurrently as the pool of experts shrinks.
The bottom line is change is inevitable, and eventually 2003 will reach a point where the surrounding ecosystem won’t work with 2003 servers. Ultimately, MS will make it so the OS becomes inoperative as the company continues to evolve. So what can we do?
We take great pride in helping solve our clients' IT needs and highlighting recent success stories. Our client Wexford Capital LP is one such example who selected the Eze Private Cloud platform for its fully managed, enterprise-grade environment. Wexford Capital gravitated away from its on-premise IT infrastructure and towards the Eze Private Cloud for its multifaceted suite of services and measurable benefits, such as, cost optimization and increased business agility.
Dante Domenichelli, Chief Operating Officer at Wexford Capital, said, “Eze Castle Integration delivers the comprehensive services and expert, reliable support we had been searching for in an IT provider. Transitioning to the Eze Private Cloud has enabled seamless business expansion and improved our operational efficiencies while providing assurances of performance and security.
In Part 1 of the SEC's recent cybersecurity guidance update, the regulatory body highlighted the need for cyber risk assessments across multiple areas of a registered firm's organization. Continuing to address how firms should prepare for security incidents before they occur, Part 2 of the SEC's guidance update focuses on how hedge funds and registered investment advisers should prevent, detect and respond to security incidents.
Take a look at the latest installment of our video series or scroll down to read a brief recap.
Categorized under: Security Launching A Hedge Fund Cloud Computing Disaster Recovery Hedge Fund Due Diligence Hedge Fund Operations Hedge Fund Regulation Infrastructure Communications Outsourcing Business Continuity Planning Trends We're Seeing Videos And Infographics
If you missed our 'Starting a Hedge Fund' webinar last week, you missed a lot. Luckily, our webinar replay is available here, and we're now onto Part Two of our recap. If you missed Part One - which focused on the structural and formation basics of starting a new hedge fund - click here. In Part Two, we're recapping what our very own Managing Director Vinod Paul covered, specifically around IT infrastructure decision-making, cybersecurity protections and common technology mistakes.
2015 Technology Priorities
Before looking at the specific technology infrastructure components emerging managers should consider before and during the launch phase, let's first cover some large-scale IT priorities for startups in 2015. We've identified three major priorities:
Selecting the right service providers. Whether it's outsourcing IT, administration or another critical function, it's imperative for startups (and successful hedge funds in general) to conduct proper due diligence and forge partnerships with providers that offer flexibility and accountability.
Understanding your firm's vulnerabilities and exposures. Security, security, security. It's the most critical area of focus for hedge funds in 2015. Firms should understand what risks could affect their businesses and the safeguards in place to mitigate those risks.
Employing an infrastructure your firm can grow with. You're a startup, yes. But you can't afford to act like a startup, at least when it comes to your technology. Selecting an infrastructure platform and provider that can grow with your firm and support you 2, 5, 10 years down the road is critical to your success, and will save you money and headaches in the long run.
Categorized under: Launching A Hedge Fund Cloud Computing Disaster Recovery Security Hedge Fund Due Diligence Hedge Fund Operations Hedge Fund Regulation Infrastructure Communications Outsourcing Business Continuity Planning Trends We're Seeing Videos And Infographics
Yesterday, we hosted a hedge fund launch webinar called “A Checklist for Starting a Hedge Fund in 2015,” which focused on structure and strategy considerations for hedge fund startups as well as focus areas for your technology infrastructure and cybersecurity systems. Marni Pankin, partner at Marcum LLP, and Vinod Paul, managing director at Eze Castle Integration, shared their expert knowledge on what they consider to be the top priorities for hedge fund startups in 2015.
Pankin started with a checklist of her own, including what an emerging manager should look for when launching a new hedge fund. Below is a brief summary of her checklist and be sure to read our second article, "Starting a Hedge Fund: Your IT and Cybersecurity Checklist" here.
Categorized under: Launching A Hedge Fund Cloud Computing Disaster Recovery Security Hedge Fund Due Diligence Hedge Fund Operations Hedge Fund Regulation Infrastructure Communications Outsourcing Business Continuity Planning Trends We're Seeing
We were honored to be invited to participate in an exciting event in Boston recently hosted by KPMG. The event, Hedge Fund Symposium 2015, featured a lively panel on cybersecurity to kick off the afternoon. Featuring speakers from Eze Castle Integration, Morgan Lewis and The Baupost Group, the panel discussed the changing cybersecurity landscape for hedge funds and alternative investment firms and shared best practices on how to mitigate risk in this evolving climate. Following are some of our favorite highlights from the event.
Malware is seemingly the most common threat to financial firms and can infect a firm’s network as a result of improper use of removable storage media (USB devices), opening of suspicious hyperlinks and attachments or more advanced ransomware technology (think Cryptolocker virus).
Spear-phishing and social engineering campaigns are also extremely prevalent and can cripple even the most technology-savvy firm. Ultimately, these campaigns are best prevented through proper user training and awareness around information security.