Eze Castle Integration Releases 2012 Hedge Fund Technology Benchmark Study
Survey of 320 firms reveals continued influence of regulations and investor transparency demands on technology adoption
BOSTON, October 25, 2012 – Eze Castle Integration, Inc., a leading provider of strategic IT solutions and private cloud services to hedge funds, today released its 2012 Hedge Fund Operations & Technology Benchmark Study, which surveyed 320 hedge funds and alternative investment firms about operational and technology decisions. The study found that Dodd-Frank regulations and other demands for transparency play a crucial role in which technology systems firms decide to adopt.
This year’s study, which included 100 more survey participants than last year, revealed that firms continue to adopt technology as a means for meeting regulatory demands. Respondents also reported that their organizations are investing in new solutions and optimizing existing ones that help them access data more easily and securely.
Eze Castle Integration asked survey participants to detail their use of front, middle and back office technologies. Key data points include:
- Market data: Bloomberg is the clear favorite, with 90 percent of firms reporting it as their preference. The next closest choice is Thomson Reuters at 20 percent. (Multiple responses were allowed.)
- Market analytics: One-third of respondents are using multiple tools for analytics. Bloomberg led the pack in this category with 73 percent of responses. Other responses included Capital IQ, Thomson Reuters and Factset.
- Order management system: ConvergEx’s Eze OMS and Bloomberg OMS are the most widely used systems among respondents.
- Research management system: The majority of respondents are not using RMS, but adoption is increasing due to data proliferation, regulations and investor due diligence. Top responses are proprietary/in-house systems, Advent Tamale and Code Red.
- Portfolio accounting: Thirty-two percent of respondents are using an Advent system for portfolio accounting.
- Message archiving: Half of the participating firms use Global Relay for email, instant messaging and social media archiving.
- Mobile devices: As predicted in last year’s findings, BlackBerry remains the top choice, but it is losing ground to Apple/iPhone adoption. Approximately 30 percent of firms now use Apple products, up from 10 percent in 2011.
Additional areas covered in the benchmark study include outsourced administration, risk management and customer relationship management technologies.
“Hedge funds and investment firms trust Eze Castle to lead them through the dynamic technology landscape to identify the solutions that support operational excellence,” said Bob Guilbert, managing director at Eze Castle Integration. “Our annual benchmark report is one of the many tools we use to educate our partners and clients about the trends and technology that will affect their buying decisions and the overall health of their organizations.”
Of the 320 firms that responded, 30 percent have assets under management (AUM) less than $100 million. Thirty-two percent of respondents have AUM between $101 million and $500 million, and 38 percent have more than $500 million in assets. Other demographic information includes:
- Seventy-six percent of firms have single office locations in the U.S. Twenty-four percent reported both U.S. and international offices.
- The most popular single investment strategy was equity (long/short) at 37 percent, with 23 percent of firms reporting multi-strategy approaches.
- The top five prime brokers reported were Goldman Sachs, Morgan Stanley, JP Morgan, Credit Suisse and UBS.
About Eze Castle Integration
Eze Castle Integration is the leading provider of IT solutions and private cloud services to more than 600 alternative investment firms worldwide, including more than 80 firms with $1 billion or more in assets under management. The company’s products and services include Private Cloud Services, Technology Consulting, Outsourced IT Support, Project & Technology Management, Professional Services, Telecommunications, Business Continuity Planning and Disaster Recovery, Archiving, Storage, Colocation and Internet Service. Eze Castle Integration is headquartered in Boston and has offices in Chicago, Dallas, Geneva, Hong Kong, London, Los Angeles, Minneapolis, New York, San Francisco, Singapore and Stamford.