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Why Billion Dollar Hedge Funds Are Going Cloud

By Mary Beth Hamilton | Thursday, June 19th, 2014

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

Billion Dollar Club Goes CloudThere’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.

The Business Case for The Cloud: Why Established Firms Are Making The Move

Hedge Funds and CloudTraditionally, investment firms have allocated significant capital budgets – millions of dollars – to build out their own sophisticated Communication (Comm.) Rooms, which can take months to provision and bring online. There are servers to buy and install, software to license and configure, and voice/networks to deploy. And these infrastructures also require firms to recruit and hire expensive IT talent to manage and operate.

Increasingly, however, that model no longer makes good business sense for some firms. Today, cloud architectures are emerging as the dominant choice for computing infrastructures at investment firms of all sizes. With cloud computing, firms procure from a third party a scalable supply of computing, storage, and networking resources on a near-immediate basis without the upfront capital investments, delays, staffing requirements, or maintenance headaches. Funds can provision new servers in a few hours, scale up to meet short-term needs, and scale down when needs dictate. Best of all, that infrastructure is managed and protected 24x7 by dedicated professionals who focus solely on operating these services on a firm’s behalf.

Not surprisingly, many firms – including those with well-established in-house infrastructures – are making the move to the cloud for a variety of compelling reasons:

  • Predictable and Favorable Economics

  • Investor Transparency

  • World-Class Capabilities

Download the full whitepaper, Why the Billion Dollar Club is Going to the Cloud, HERE.

Need more convincing? Watch our video.

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