With a new year comes new regulations for hedge funds and investment firms. Earlier this week, Eze Castle Integration hosted a webinar during which Ricardo Davidovich, partner at Haynes & Boone LLP shared his insight into the Securities and Exchange Commission’s (SEC) new examination priorities as well as reoccurring themes firms should expect to see play out through the year.
What’s New in 2015
One priority for examinations this year is the focus on retail investors. Davidovich says that “hedge funds, which in [the SEC’s] mind have historically been an exclusive and private club, are being sold to the retail and consumer client base.” Meaning they will be taking a closer look at the types of fees being sold, the sales practices and the suitability analysis. Firms should focus on making sure no information released is misleading and that there are provisions against fraud. There should be a real emphasis on policies to create guidelines that can be shown and proven to the SEC.
If you’re one of the seemingly few firms who has yet to make the move to the cloud, it could be for a variety of reasons. Perhaps you want to maintain total control of your IT environment. Or maybe you’re waiting for a tech refresh to motivate you. Alternatively, it could be that you just haven’t made the proper case to management for switching to the cloud – and many times the one who really needs convincing is the Chief Financial Officer (CFO).
If you’re the Chief Technology Officer (CTO) or IT Manager, your responsibility is determining the infrastructure choices that are going to best suit operations at your firm. But those priorities may not line up exactly with those of the firm’s CFO. IT doesn’t always have insight into the financial ramifications of an operations decision of this magnitude. Instead they are typically focused on the other benefits including personnel reallocation, workflow efficiencies, etc.
The CFO, on the other hand, is ultimately tasked with ensuring the company’s financial decisions are appropriate, and therefore, it’s often advantageous to at least attempt to speak his/her language when pushing for an IT change.
Today we released a new whitepaper that looks at a growing trend we are seeing -- billion dollar hedge funds and investment firms moving to the cloud. Here is a sneak peak at the paper's content as well as a video interview with Bob Guilbert on why firms should read, Why the Billion Dollar Club is Headed to the Cloud.
It’s More Than Managing Money
There’s more competition in financial services than ever before. Every week, new and agile boutique firms sprout up, armed with proprietary models and the right technology foundation to compete – intensely – with the major players for billions of investment dollars. Firms of every size are competing to deliver broader ranges of increasingly exotic instruments, specialized funds, and high-performance investments that deliver competitive returns to investors whose demands and expectations continue to climb.
But when it comes to performance and success in financial services, there’s more to evaluate than just the hard numbers. Returns alone aren’t enough. Today, savvy firms know they need to deliver more. In a post-Madoff, post-2008 world, the SEC and FINRA – and investors as well – are scrutinizing all corners of the operation. There’s an increased focus on how operational risk is managed and how firms respond to greater demands for transparency. That means it’s more important than ever for firms to deploy and maintain robust, scalable, and secure technology infrastructures.
They say a picture is worth a thousand words so here is an infographic of our 2013 Global Hedge Fund Technology Benchmark Study that explores the most common front, middle and back office applications and technology used at today's hedge funds.
This week Opalesque Radio featured an interview with Bob Guilbert, managing director here at Eze Castle Integration, on addressing operational challenges facing hedge funds with cloud solutions.
The 9:30-minute podcast covers a range of topics. You can listen to the full podcast HERE, just jump to the sub-features that interest you most below.
Like David bravely dueling with the larger Goliath, small and mid-sized investment firms are often faced with insurmountable odds when competing against larger (and better endowed) funds. With more experience and more assets, larger firms have the advantage when it comes to soliciting investor allocations. But do these inherent shortcomings equal certain failure? If David can emerge victorious, can’t smaller hedge funds?
Earlier this week, we gathered a panel of experts in San Francisco to discuss this topic at length. Following is a brief synopsis of the topics they covered.
Today, we're excited be hosting the 2013 London Hedge Fund Cloud Summit at the Prince Philip House in London. The event features a variety of industry experts participating in thought-provoking panel disccussions focused on the cloud adoption trends shaping the investment industry. Conversations will touch on everything from the differences between public and private clouds to cloud security and application hosting.
In honor of this event and to provide a visual to help encapsulate the many benefits that come from leveraging a private cloud, we have published a new infographic entitled “You Might be a Private Cloud User If…” Check it out to see the top 10 signs that you are likely a private cloud user. For more information and details on the 2013 London Hedge Fund Cloud Summit please visit the event page. Also, be sure to look out for a recap of the event here on the Hedge IT blog next week!
Yesterday our VP of client technology, Steve Schoener, presented on a California Hedge Fund Association webinar about building an institutional infrastructure at today’s hedge funds. A lofty topic (so consider this a basic primer), Steve focused on four key discussion areas, which we’ll recap here. They were:
Investor Expectations of IT
On-premise & Cloud solutions: Which is right?
Security Risks & Best Practices
Disaster Recovery How-Tos
You can watch the 30-minute webinar now or keep reading below.
Here on the Hedge IT blog, we love to talk about the cloud. However, most of our discussions focus on the technology and operational considerations for investment firms. This week, we’re taking a different approach and looking at the cloud from a business perspective. On Tuesday we explored the business case for moving to the cloud. Today, we’re taking the CFO’s point of view.
You’re a hedge fund CFO. Your CTO has proposed moving the organization’s IT infrastructure to the cloud using a third party service provider. What questions should you ask to gain a better understanding of the impact this change could have on your team and the firm at large?
While the technology benefits of moving to the cloud are well known, the business case for moving to the cloud is just as important. The hedge fund industry is increasingly moving towards cloud computing not only for the vast technology benefits, but also for the enhanced efficiencies, high quality technology environment, and numerous cost savings. Read on to learn the business case for adopting cloud computing technology at your firm.
Transferring from CapEx to OpEx
Today, many hedge funds are grappling with ways to achieve efficient operations while remaining as competitive as possible. Companies are examining the costs associated with their IT departments in order to determine the best way to make their technology more cost effective. For many firms, this means moving to the cloud. One of the major benefits of adopting cloud computing technology is the resulting movement from CapEx to OpEx.
This shift allows a decrease in capital expenditures (CapEx) and an increase in operational expenses (OpEx), providing potential tax benefits. The tax benefit is the result of OpEx allowing for the deduction of expenses in the current year and the cutting of tax liability applied to net income. Furthermore, there are few upfront capital expenditures associated with adopting a cloud model as there with building out in-house comm rooms and data centers. This is because cloud providers deploy a “pay-as-you-go” service model.