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Then and Now: State of the Hedge Fund Industry

By Kaleigh Alessandro,
Thursday, February 16th, 2017

They say the more things change, the more they stay the same. Turns out it’s a pretty accurate assessment of the hedge fund industry then and now.

You see, back in 2011 we hosted a “State of the Hedge Fund Industry” event that yielded some interesting trends and perspectives, and we thought it might be fun to not only look back at those trends, but compare them to what we’re seeing in today’s industry – more than five years later.

Like I said: the more things change, the more they stay the same.

Hedge Fund Market Trends & Challenges

THEN (2011): It’s been an interesting year thus far for hedge funds and other alternative investment firms, as inflows have been high but performance low. In addition to performance challenges, hedge funds continue to deal with increased competition for investments, and thus asset-raising remains a hurdle for many funds – regardless of their size or strategy.

Categorized under: Trends We're Seeing  Launching A Hedge Fund  Cloud Computing  Security  Disaster Recovery  Hedge Fund Due Diligence  Hedge Fund Regulation  Business Continuity Planning 



10 Questions to Ask Your Cloud Services Provider

By Kaleigh Alessandro,
Thursday, February 9th, 2017

When evaluating a cloud services provider there are a lot of factors to take into consideration: features & functionalities, security protections, provider experience, and industry certifications just to name a few. We've identified some of the most important questions today's investment management firms should be asking cloud services providers during the selection process.

Five or seven years ago, these questions would probably be fairly basic in nature. Does the infrastructure isolate individual client environments? (Yes). Can the cloud environment scale to meet a firm's growing resource needs? (Yes). In 2017, we can safely assume you understand the basics of the cloud, so the questions we've identified move beyond the basic and focus on critical infrastructure, security and support questions your cloud provider should be able to address.

Top Ten Questions to Consider:

  1. I'm most concerned about the security of my data. What types of security layers do you employ across the cloud platform and your broader organization to guarantee the safety of my firm's information?

  2. Does your cloud leverage proactive security technologies such as intrusion detection and prevention, next-generation firewalls and regular vulnerability assessments and/or penetration tests?

Categorized under: Cloud Computing  Trends We're Seeing 



Is “Smart” Technology Invading Your Privacy?

By Lauren Zdanis,
Tuesday, February 7th, 2017

We educate our clients all the time about how to keep their organizations secure and mitigate against insider and outsider threats. But one area of security often overlooked is that of the home office – and the home itself on a larger scale. With new technologies constantly being released – and many of today’s devices linked via the Internet of Things (IoT) – the likelihood of being hacked or having private information stolen also increases.

Emerging ‘smart’ technologies such as Amazon’s Echo and Google Home are making their way into many homes, making it simple to find for users to stay up-to-date on the latest news, ask for directions, or hear tomorrow’s weather forecast. The Echo’s voice assistant, Alexa, for example, can complete advanced tasks such as turning on lights and changing the temperature of your home.

But what if these technologies are jeopardizing the inherent privacy of your own home? Let’s take a look into the future.

Categorized under: Security  Cloud Computing  Communications  Trends We're Seeing 



How to Create a Human Firewall: Proactive Cyber Advice

By Mary Beth Hamilton,
Thursday, February 2nd, 2017

How much security protection is enough? That’s a tough question to answer and the catalyst behind our recently published whitepaper on selecting the right cybersecurity tier based on individual risk profiles (download it HERE). The paper outlines three common tiers including Tier 0 (the ‘must-have’ list) to Tier 2 (the ‘advanced’ list), however it only touches briefly on the human element of security.

The reality is that in today’s sophisticated cyber environment firms must go beyond physical or virtual firewalls firms and establish a ‘Human Firewall,’ because sometimes technology alone won’t stop some of the most damaging attacks. In many instances, employees are “holding the door open” to criminals or inadvertently “leaving the keys out.” At other times, disgruntled employees act with more malicious intent.

Building a ‘human firewall’ comes down to establishing a security-conscious workplace and culture where employees understand the risk landscape and know how to respond. So what goes into their ‘human firewall’? It has varying parts including policies, training, awareness and of course people(!).

Practical, User-Friendly Policies

Many firms create a 20+ page written information security plan that formalizes the definitions and policies that govern the creation, access, and deletion of confidential information and computing services. That can be everything from a definition of personally identifiable information (PII), a description of user access privileges and roles, or policies regarding data handling. What matters is that you’ve explicitly and unambiguously documented all aspects of your company’s at-risk assets and services.

While the plan should be comprehensive, firms should also avoid getting bogged down in “tech speak.” Employees need user-friendly policies that are straightforward to follow. For example, they want to know the implications of their actions (“If I read this on a mobile phone, am I creating a security vulnerability?” “What happens if I lose my mobile device?”).

Categorized under: Security  Launching A Hedge Fund  Private Equity  Hedge Fund Due Diligence  Hedge Fund Operations  Hedge Fund Regulation  Trends We're Seeing 



Beware of Security Risks Lurking Behind Public Wi-Fi

By Katelyn Orrok,
Tuesday, January 31st, 2017

Public Wi-Fi networks are incredibly convenient and can be a great resource for airport layovers, coffee shop meetings or lengthy train commutes, but alongside convenience are a host of unnecessary risks. On open, unsecure networks, information is generally unencrypted, meaning with the use of a wireless network analyzer, it’s fairly easy to see what others are up to. What attackers try to do is intercept the communication between your computer and the computer you are sending information to so that they can gather useful information. A hacker, for instance, can see what webpages you’ve visited and what credentials you’ve entered into forms.

Common attacks that occur on public Wi-Fi include:

Man-in-the-middle attacks (MITM)

Attackers will set up their own network between your computer and the computer you are connecting to so that all the information you enter is first routed through their device.

Categorized under: Security  Communications  Trends We're Seeing 



Private Equity Firms Shore Up Security After Experiencing Cyber Issues, Breaches

By Kaleigh Alessandro,
Thursday, January 26th, 2017

In 2016, 70 percent of private equity firms experienced no less than three cybersecurity issues. Not one or two. But three (or more). It’s one of the most jarring findings of our Private Equity CTO Survey, and it signifies just how imperative it is for financial services firms to implement sound and robust security measures to protect business assets, operations and reputations.

In the past 12 months, private equity firms indicated that they’ve experienced a wide range of cybersecurity issues, most notably malware, worms and viruses (1 in 3 firms), unauthorized access to corporate data (nearly 1 in 3 firms) and hijacking of social media accounts (nearly 1 in 3 firms). While the latter, in particular, may not seem like a concerning issue, it’s important to recognize that social media accounts are promising gateways for social engineering hackers. Information within these personal accounts can serve as the keys into corporate information systems – particularly if users are not diligent about maintaining unique passwords for various systems.

That nearly a third of firms have experienced unauthorized access to corporate data highlights a lack of control over an organization’s data and who has access to it. Without a detailed access control policy and ongoing monitoring in place, too often employees receive excessive data access privileges that introduce security risks.

In light of these experiences, our survey indicates firms will make significant changes to their IT budgets this year. When asked what percentage of their overall IT budget would be dedicated to cybersecurity in the next 12 months, respondents indicated a significant increase, as seen by the chart below. Only 7 percent of private equity firms will have cybersecurity budgets of less than 5 percent, down from 24 percent currently. Increases are also expected in the budget range of 10 to 25 percent.

Categorized under: Security  Private Equity  Trends We're Seeing 



The Private Equity CTO: Business Strategist, Cyber Czar

By Kaleigh Alessandro,
Tuesday, January 24th, 2017

Technology innovation and evolution has had a profound effect on many jobs, perhaps most notably for a firm’s Chief Technology Officer. Once tasked with desktop support and server maintenance, these IT executives have seen their job descriptions change dramatically over the years. But that change doesn’t necessarily signal something negative.

Our Private Equity CTO Survey asked these technology experts directly how they spend their time and what they view as the new and evolving role of the private equity CTO. Their answers highlight a transformative shift from technology troubleshooter to strategic thinker.

With the advent of outsourcing and the cloud, many feared or expected the CTO role to diminish. So perhaps the most notable finding of our survey is that 93 percent of respondents believe their firm’s CTO or top IT executive is becoming more important to their business. The vast majority of private equity IT execs are becoming more focused on managing relationships with contractors, cloud and other IT service providers. This increased focus is in alignment with the trend of today’s progressive CTOs drawing on cloud technology to create agile firms that can quickly deliver the applications users require – and working hand-in-hand with outsourced providers to support the organization’s technology and operations objectives.

Most firms (85 percent) also see the CTO becoming more involved in driving the firm to meet regulatory and compliance demands. This is especially true as regulators outline data protection and cybersecurity expectations that can only be fully addressed through the use of technology. Additionally, regulators’ expectations around third-party due diligence has increased, placing more responsibility on CTOs to execute thorough risk assessments on the contractors, cloud, software and IT service providers used by the firm.

Categorized under: Private Equity  Cloud Computing  Security  Outsourcing  Trends We're Seeing 



Private Equity Outsourcing Trends and Cloud Preferences

By Kaleigh Alessandro,
Thursday, January 19th, 2017

It’s time to take another close look at the results of our 2016 Private Equity CTO Survey, this time with a careful eye on how private equity firms are leveraging outsourcing and cloud services.

Private equity outsourcing is growing in popularity – and we discussed many of the reasons why at length in a September webinar which you can listen to here. Our survey findings tell us that the average private equity firm is outsourcing about 30 percent of IT, with of course, some firms outsourcing less frequently and some outsourcing more.  

On the whole, most firms are leveraging outsourced third party providers for between 20 and 40 percent of their IT functions. Firms managing less than $100M in assets are the most likely to outsource greater portions of their IT services, likely given their lack of internal staff and resources.

Overall, firms’ propensity to manage technology via in-house resources, outsourced providers or contract work is expected to stay consistent in 2017, as evidenced by the graph below. 


Private Equity Outsourcing Trends

Categorized under: Private Equity  Cloud Computing  Security  Disaster Recovery  Outsourcing  Trends We're Seeing 



Cybersecurity, Cloud Top List of Private Equity Investment Areas for 2017

By Kaleigh Alessandro,
Tuesday, January 17th, 2017

As you probably recall, our 2016 Private Equity CTO Survey – which we released at the end of November – highlights key IT priorities and investment areas driving private equity firms in 2017. And while we shared some high-level findings at the outset, we’d like to take the opportunity to dig a little deeper into some of the survey results over the next two weeks. Since the survey itself covered four primary areas, our next four Hedge IT articles will examine each of these areas independently and highlight some of the most interesting and thought-provoking findings.

To kick us off, let’s start by taking a look at some critical business priorities for private equity firms in 2017.

Drivers for Private Equity IT Investments

We all know and appreciate how technology can impact our day-to-day operations. For private equity firms, advances in technology have enabled their businesses to become more efficient and drive growth across the entire organization.

When asked to identify the top drivers impacting IT spend in the next 12 months, survey respondents highlighted the need for increased protection against growing cybersecurity threats, a desire to improve the investor/client experience, and the goal of improving efficiencies by refreshing outdated or legacy technology.

Categorized under: Private Equity  Cloud Computing  Security  Disaster Recovery  Outsourcing  Infrastructure  Trends We're Seeing 



Three IT Security Must Dos to Mitigate Risk in 2017

By Lauren Zdanis,
Thursday, January 12th, 2017

As we predicted in our recent article on 2017 technology trends for financial firms, cybersecurity and protection of personal information remain key priorities in the new year. Ensuring that information is secured is becoming infinitely harder as hackers find more ways to access, expose and compromise data. Up-and-coming security scams such as “popcorn time” and “typosquatting” are just some examples of new ways hackers are exposing data. With this in mind, we’ve identified three IT security must dos you should employ in 2017 to protect yourself and your organization.

Categorized under: Trends We're Seeing  Security 



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