A volatile economic environment, increased investor scrutiny and changing regulations have put the spotlight on organizational transparency and operational risk at investment firms. These factors, combined with the rising overhead costs inherent in owning, managing and monitoring a technology infrastructure and related services, have caused technology to take on a greater importance in recent years. It’s become a competitive differentiator and – with the explosive growth of cloud computing –a game-changer for funds’ operational strategies.
One major change we’re seeing within the industry is a trend toward outsourcing. In the past, we’ve discussed a number of outsourcing options, such as cloud computing, colocation, FIX connectivity and staffing. Today, let’s take a deeper dive into one aspect of outsourced staffing: leveraging a third-party help desk for day-to-day technology questions, systems management and troubleshooting.
Moving to a new office securely, effectively and without complications takes a lot of planning and strategy. So we caught up with our Eze Project Management Team to get the lowdown on the top 10 areas firms should consider before, during and after a move. Checkout our 'technology move checklist.'
Conduct a Technology Infrastructure Audit: It is important that your firm takes the time to account for all the technology and data in its current office space. It is important to know how much equipment you are bringing to the new space so you can have enough space and power.
Check Building Suitability & Timing: Evaluate office space based on the requirements you have for telecom, hardware, servers, workstations etc. Also, consider timing. It is important that all circuits are ordered before the move as lead times vary. Also verify lifecycle support and service agreements.
Evaluate Your Existing Infrastructure: If your infrastructure is ageing or is no longer suitable for your needs now is the time to considering updating your environment or making a move to the cloud. Relocating outdated equipment is often a waste of valuable resources.
Sometimes our biggest fears don't stem from the rise of the undead, especially when you're responsible for your company's network security. There are plenty of real 'ghosts' that seemingly live in the ether of your IT environment. We're recpping 2017's scariest IT moments, and providing a few tips so these don't happen to you. Now is the time to start stockpiling your arsenal, not after you've been breached.
KRACK Wi-Fi Vulnerability
We recently covered the KRACK Wi-Fi Vulnerability that made headlines earlier this month as its identification meant that virtually any Wi-Fi enabled device could be made vulnerable to exploit. This latest exploit also reinforces the importance of being prepared to execute both reactive and proactive patch management measures. When it comes to patch management, most firms do not have the internal resources necessary to effectively monitor, test, and roll-out patches. Companies – such as Eze Castle Integration! – can provide fully managed patch services to ensure software and firmware remain up-to-date and are proactively monitored to prevent security bugs and malicious exploits, reducing overall firm risk.
Our two-part feature covers the legal and IT considerations for launching a private equity firm. In Part 1 we talked legal considerations for launching a private equity firm. Now on to Part 2 where we will talk IT considerations. Be sure to watch the full webinar replay for deeper guidance from our expert Tim Kennedy, SVP of Eze Castle Integration.
On the technology side, there’s a lot to consider. Whether you’re spinning out of a successful fund or beginning your own venture from scratch, it’s imperative to have enterprise-grade IT when you’re managing and growing a portfolio of companies.
When selecting your IT provider, you want to consider these:
Company background and financials
Service team and org chart
Breadth of services
Information security policies & practices
Disaster recovery and business resilience
Do they have an extensive partner network? Can they leverage industry-leading vendor relationships for infrastructure, software, etc.?
Do they have a global presence? If your firm expands across the US or internationally, can they support additional offices?
Private equity firms are enjoying record buyout values in 2017, so it’s no surprise there’s growing interest in joining the industry. But successfully starting a private equity firm is not without its challenges.
During a recent webinar, we covered legal and IT considerations for launching a private equity firm with Monica Arora, Partner, Proskauer Rose LLP, and Tim Kennedy, SVP, Eze Castle Integration. Today, we are going to briefly review the legal considerations to help you navigate the competitive landscape for new private equity firms. Be sure to watch the full webinar replay for deeper guidance from our expert Monica Arora.
Key Points about Vehicles:
Fund Vehicle Limited Partnership, for U.S based funds, typically uses Delaware or Cayman Islands jurisdiction for a limited partnership
Limited Partners are your 3rd party investors
General Partners are your private equity firms
Fund Manager is a different entity, which is a special purpose vehicle that is typically created for each fund, is the bricks and mortor
Teams across our company are hard at work testing, validating and implementing the many new patches being released from vendors, including Cisco and Microsoft, as a result of the KRACK (‘Key Reinstallation Attacks’) vulnerability.
Warnings around the new vulnerability, KRACK, made headlines earlier this week as its identification meant that virtually any Wi-Fi enabled device could be made vulnerable to exploit. This latest exploit also reinforces the importance of being prepared to execute both reactive and proactive patch management measures.
Yet when it comes to patch management, most firms do not have the internal resources necessary to effectively monitor, test and roll-out patches in a timely fashion. Remember the Equifax breach? It is widely reported the Equifax breach occurred because the company missed a patch to address an application vulnerability, which the criminals later exploited.
You Need a Patch Management Service
Outdated systems are dangerous yet all systems can become dangerous if left unpatched. That’s why we recommend looking at a patch management service. Companies – such as Eze Castle Integration! – can provide fully managed patch services to ensure software and firmware remain up-to-date and are proactively monitored to prevent security bugs and malicious exploits, reducing overall firm risk.
On our recent Emerging Manager Trends in Operational Due Diligence webinar, we looked at how today’s emerging managers face a number of challenges from fierce competition to the rapidly evolving investor IT due diligence process, especially in terms of scrutiny on technology processes and security safeguards.
The reality is that investors have a greater understanding of technology, are asking more probing due diligence questions and care about the responses they receive. In recent years the depth of DDQ questions around information technology and security has expanded as investors become increasingly savvy about IT and headlines around IT risks have grown.
Here at Eze Castle Integration we regularly assist our clients in completing the IT portions of investor due diligence questionnaires. The wording of questions varies but here is a handy list of 51 common IT due diligence questions we see.
- Provide an organization chart for the Company, its affiliates and key personnel.
- Provide the physical address and general contact information for each of the Company’s office locations.
- Provide the name and contact information of the Company employee(s) assigned to the client’s account(s).
- Provide a list of compliance personnel, their roles and qualifications, the date of his/her appointment and position within the Company’s organizational structure.
From time to time, we like to introduce new voices to our blog and pick their brains about technology trends and industry observations. Most recently, I sat down with Eze Castle’s Director of Technical Architecture, Bob Shaw, to discuss cybersecurity and how clients are responding to increasing threats.
1. Earlier this year, the WannaCry outbreak made a lot of waves and forced firms to reevaluate their protections against ransomware. What would you say is the biggest takeaway from the WannaCry incident?
BS: The first thing I would say to firms – and it sounds simple but it’s not always a given – is don’t pay the ransom! You’ll never get your files back. That’s where the second part comes in, and that’s always have backups. Backups are the only fool-proof method for recovering your data, and it’s critical that firms use robust and secure backup and recovery tools to safely store their files and protect them against these types of incidents.
2. What’s the technology you’re most excited about right now that’s helping firms guard against cyber threats?
BS: Next-generation firewalls are really interesting and effective. We work with Palo Alto to deliver these to our clients, and when we lay out the facts, it becomes pretty evident how beneficial they are. Older, port-based firewalls can’t necessarily detect that traffic is doing, but next-gen firewalls have the ability to analyze unknown traffic and simultaneously develop protections to safeguards networks. Firms also have greater visibility and control in managing applications and content to uniquely implement security protections for their infrastructure.
There has been discussion for years about whether public or private cloud platforms were more suitable to financial and investment management firms. And that debate continues, but with the addition of a new player – the hybrid cloud.
While the public cloud receives praise for its flexibility and potential cost savings and the private cloud for its robust security and reliable performance, the hybrid iteration essentially marries these features to create a compelling package for firms who don’t fit naturally into the previous two categories.
As its applicability continues to surge, it is worth understanding the concepts and benefits behind the hybrid cloud. Let’s take a look at what makes hybrid environments appealing to some organizations:
Agility & Flexibility: A hybrid cloud model allows a company to combine public cloud assets with those in a private cloud to increase agility and availability. For example, combine Microsoft Exchange and file services via the public cloud with robust security layers and 24x7x365 managed support via the private cloud, and suddenly you’re benefiting from the best of both worlds (hint: we’re talking about the Eze Hybrid Cloud).
During a recent webinar on operational due diligence, we explored the changing ODD environment for emerging managers, and our guest speaker, Frank Napolitani of EisnerAmper, helped shed light on some critical missteps that could cause ODD teams to veto an investment.
>> Click here to listen to our full conversation with Frank and hear more about operational due diligence trends
At the highest level, investor due diligence experts see the following as the most egregious red flags:
Dishonesty: Demonstrated in the form of failing to disclose or withholding information. This shows a lack of integrity.
Belligerence: When managers exhibit an ‘I’m never wrong’ attitude and are unwilling to listen to objective advice.
Incompetence: When a firm or manager’s skillset doesn’t align with the expertise required for a particular function.
More specifically, there are a number of red flags that can give investors pause and lead to either increased due diligence or an outright rejection. From a recent Deutsche Bank survey, keep reading for a few reasons:
Categorized under: Operational Due Diligence Cloud Computing Security Outsourcing Launching A Hedge Fund Private Equity Disaster Recovery Hedge Fund Operations Infrastructure Business Continuity Planning Trends We're Seeing