Today’s emerging managers face a number of challenges: fierce competition and demanding investor expectations tops among them. With operational due diligence processes evolving rapidly, how can emerging managers differentiate themselves and make an impression on suspecting investors?
During a recent webinar, speakers from Eze Castle Integration and EisnerAmper discussed the current environment for emerging managers and examined the following topics:
Key Qualities Investors Look For
Red Flags for Emerging Manager Investors
Investors IT Expectations
Why Firms Look to Outsource
Post-launch, many hedge funds and investment firms struggle to gain ground and attract the institutional capital needed to succeed in today’s competitive market. As firms grow – and bandwidth and budget are less likely to be roadblocks – it can be a challenge to reinvent the wheel and position your firm to capture institutional dollars.
During a recent webinar, speakers from EisnerAmper and Eze Castle Integration explored trends in hedge fund operational due diligence and technology operations and offered advice for asset managers looking to grow out of their startup boots and achieve an institutional grade operation. Some areas they explored during the 40-minute webinar include:
How institutional investor expectations have changed for firms at the pre-launch and post-launch phases;
The importance of (and detriment to not) passing an operational due diligence examination;
How cyber security expectations are evolving to increase standards across both technology infrastructure and policy planning;
If the public cloud is suitable for investment management firms looking to solidify institutional investments; and
Top mistakes emerging managers make that prevent successful ODD exams and institutional evolution.
Scroll down or click here to watch the replay.
To quote our latest Tech Tips video, "when things are good, they’re good. But when things turn bad, it could be downright scary," so here is our latest video that covers four signs you may be outgrowing your IT service provider.
The following article originally appeared on HFMTechnology.
Although we are faced with change on a daily basis, especially in the hedge fund technology industry, keeping pace with ongoing tech metamorphoses does not come easy for everyone. Fear, the biggest contributor of hesitancy toward change, masks the opportunities innovation presents. Fear is what leads to IT limbo, and in an ever-evolving technology landscape, this effect can be crippling. However, with the support of expert IT service providers, the pains and fears of migrations and upgrades are alleviated.
In this article, we’ll examine the recent end-of-life (EOL), of operating system (OS) Windows Server 2003, its resultant challenges and how to overcome them.
Doing Nothing and Risking Everything
Windows Server 2003 extended support ended on July 14, 2015; however, not all users have made the transition to Windows Server 2012 R2. Why are firm’s remaining on an out-of-support OS?
The primary influencers are fear and a lack of sense of urgency to replace a still functioning OS. In the case of users still utilizing the legacy application, the risks they face largely outweigh the benefits. By doing absolutely nothing, firms are risking everything. As patches and bug fixes are no longer being provided, hackers have an unguarded entrance to access a firm’s sensitive information, passwords and banking accounts. This not only increases the firm’s odds of being hacked, but also raises the gravity of ensuing damages should an incident occur.
Additionally, if a firm’s network does crash that’s still deployed on Windows Sever 2003, the odds of finding expert support become increasingly limited with each passing year. This is predominantly due to the industry’s forward marching nature. An outdated system will only continue to fall behind in the race of technology, trouble shooting will take longer, future applications will fail to run, or crash the server altogether, and the cost to migrate increases concurrently as the pool of experts shrinks.
The bottom line is change is inevitable, and eventually 2003 will reach a point where the surrounding ecosystem won’t work with 2003 servers. Ultimately, MS will make it so the OS becomes inoperative as the company continues to evolve. So what can we do?
The following article is part of our Hedge Fund Insiders Article Series and was contributed by CBRE Group, Inc. Read more articles from the Series HERE.
As a team focused exclusively on advising hedge funds on their strategic real estate planning, we have observed several trends continuing to proliferate in the market. Below are three real estate-related issues relevant to all hedge funds.
Increasing Construction Costs
Construction costs for office interiors throughout New York City are rapidly increasing and firms that built space 5–10 years ago will find that overall expenditures for the same quality installation have increased 30–40% based on benchmark construction cost data across NYC. Although benchmarking numbers are not available specifically for hedge fund construction, high-end design details like custom millwork and architectural metal and glass are often a significant part of the design and are seeing the most rapid appreciation in cost, driving even more significant increases specific to hedge funds. Additionally, these premium and other critical trades such as HVAC and electrical are in high demand and can cause scheduling delays, pushing associated costs higher than ever.
It is crucial for hedge funds to have an owner’s rep / project manager advisor involved to ensure projects are appropriately budgeted from the initial due diligence phase, assessed on a project-by-project basis throughout the site selection process, and effectively implemented during the design and construction of the selected space.
Happy New Year, all!
As we embark on the New Year, there is no better time to reflect on 2014 and set new goals for the future, both personal and professional. We’ve asked a few of our employees at Eze Castle Integration what their aspirations are for 2015. Check out what some of their responses were below.
"Eat out less and cook at home more often." - Jim Bove, Systems Engineer
"To learn more about technology. You can never learn enough!" - Tim Macdonald, Product Manager
"To travel more." - Elizabeth Martin, Resource Coordinator
The following article is part of our Emerging Managers Insight Article Series and was contributed by CFS Group. Read more articles from the Series HERE.
There are many layers to creating a successful launch of a hedge fund, and often one that is overlooked is implementing the right furniture, while keeping in mind budget, timeline and dimensional restraints for your new office space. For someone starting a fund, and relying on your own capital, creating an office space within a budget is essential. In order to do so, you must partner with a furniture dealership that understands the marketplace and has the creativity to provide a solution that is light on the wallet but has the feel of stability and success.
As you would expect, just like many other businesses, the commercial furniture industry is a very competitive, relationship-driven sale, and unfortunately the client is usually on the raw end of the stick. Let’s give an example:
Hedge fund A has six traders, and in their mind “we need a trading desk.” But the fund's users only have one PC and two monitors each, which equates to a minimal technology requirement. The fact is that a full-blown trading desk can range from $2,000 to $5,000 (for height adjustable product) per user.
Here is what the fund manager needs to know. There are other options that will adequately handle your technology, save you up to 60-70% and give you the look and feel of a trading desk solution - savings of $10,000 just by having the proper relationship and information.
What comes to mind when you think of Miami, Florida?
Beaches and sun, exciting nightlife, a popular Will Smith song. These are typical associations with Miami. How about finance? This might not be the first thought that comes to mind, but the city of Miami is hoping that will change. Miami is a major financial hub and growing, and according to the president of the Miami Finance Forum, it’s the second most concentrated financial hub behind New York City.
Currently home to over 60 international banks and 100 alternative investment companies, Miami and its busy Brickell Avenue has emerged as “Wall Street South,” and according to Forbes is luring many financial firms away from more traditional hubs such as New York and Greenwich, CT.
Just like a car, a hedge fund’s network needs some tender loving care (i.e. maintenance) to keep it operating like a well-oiled machine. So, here is our healthy, happy network maintenance guide that our network experts use:
Step 1: Give those network devices some support
This includes TACACS configuration monitoring to ensure only authorized personnel have access to your network devices as well as staying on top of changes and incident resolution needs related to support for network devices including switches, routers, firewalls, WAN accelerators, VPN concentrators, and Wireless Access Points.
And don’t forgot to include some proactive network maintenance in addition to incident troubleshooting and configuration changes for all your network devices.
We were recently asked by a COOConnect member about the best sources for information about the strengths/weaknesses of the various hedge fund applications including front, middle and back office. Since we know many folks have this same question, today we are going to expand on the answer given by our expert, Mark Coriaty.
Now the way a hedge fund uses an application will vary based on its investment strategy, and therefore the perceived strengths and weaknesses may vary as well. However, there are multiple ways to establish a baseline of strengths and weaknesses.
Service Provider Reports: Balancing Bias with Value
First up are free reports from hedge fund service providers such as Eze Castle Integration. Each year we publish a benchmark study that outlines top applications used in select front, middle and back office categories by hedge funds. This report will provide a baseline of the top three application vendors used in each category, but doesn’t dive into specific feature sets. The report can be downloaded HERE.
Vendor reports can be helpful in getting an initial understanding of the most frequently used applications and top features used by firms. You should always consider the source, as some vendor reports or whitepapers will be biased.