Selecting a Hedge Fund MSP: Key Considerations

By Eze Castle Integration | Tuesday, January 7th, 2020

When evaluating a hedge fund MSP, there are many important factors to consider. Among the most critical of these considerations is the extent and quality of experience the MSP and its team members possess. While small IT providers may present seemingly comparable solutions, it is crucial for hedge funds to consider the trade-offs associated with trusting your firm’s IT infrastructure to a mom and pop shop.

Working An Experienced Hedge Fund MSP Has Advantages

Well-established hedge fund MSPs typically bring a more seasoned and reputable management team than young, inexperienced companies. These individuals are more familiar with the nuances of hedge fund industry and ideally positioned to understand your firm’s unique business needs. Equally as important, having an experienced team typically helps a hedge fund MSP attract, develop and retain the best and brightest technical staff, including highly skilled engineers and analysts.

In addition to having a top quality team, established MSPs are much more likely to have a greater depth of staff available to service their hedge fund clients. We recommend selecting an MSP that can provide a dedicated project manager and an accompanying project management team that is responsible for ensuring that your hedge fund's projects and initiatives are designed, managed and implemented to meet your exact technology requirements.

Another advantage of working with an established hedge fund MSP is that they have extensive client and partner networks that broadens their expertise and resources. This means that your hedge fund will have the opportunity to speak with peer organizations that are working with the MSP to understand their experiences and the benefits of using that provider’s solutions and services. Additionally, with vast partner networks in place, established IT organizations are able to leverage best-of-breed technologies from leading vendors to benefit their clientele.

Disadvantages of Working with Inexperienced MSPs

At small, start-up MSPs, it is common for management to adopt overly aggressive pricing strategies to undercutting competitive offerings. Low pricing is definitely appealing, but understand there are likely some significant trade-offs involved. By offering very prices on solutions and services, young MSPs or mom and pop shops are forced to sacrifice resources and investments (i.e. R&D, training, certifications) in order to maintain margins. If not, they will be unable to operate profitably, which leads to financial instability and extreme risk for clients.

Another area that may seem like an advantage but in reality is a risk is round start-up IT firms agreeing to contract terms that a more established firm would not accept. With much less to lose, these small, new companies are willing to take much greater risks in order to win new business. Larger, more established organizations do not need to win every contract in order to survive as a business, thereby putting them in a better position to thoroughly review all client deals for the benefit of both parties before reaching a mutually beneficial agreement.