Diving Deep Into Investment Managers' Operational Tech Concerns
Earlier this summer, a New Zealander named William Trubridge tried to set a new freediving world record of 102 meters (335 feet) by plunging – sans scuba tanks – down into something called Dean's Blue Hole in the Bahamas. Four minutes and 14 seconds later, he emerged victorious – and the nervous onlookers all let out a deep breath, too.
We're about to take the first in a series of our own “deep dives" into the deep blue waters of market structure and operations technology. We'll be talking about the operational “pain points" that asset managers – hedge funds as well as long-only firms – are experiencing daily, and how technology can address those pain points more effectively than ever before.
Here are the top issues customers have asked us to help navigate:
- Trade surveillance and compliance. Investors these days want to be able to come in and assess the infrastructure of a fund, straight through its daily activity and to settlement and reconciliation. If the fund manager doesn't have integrated, robust trade surveillance and compliance software in place, that task becomes more challenging. Managing surveillance with limited staff makes it tougher still.
- Fund strategy diversification. To stay competitive, investment firms need a platform that can handle trade execution across multiple venues and a wide range of asset classes equally well. As funds have diversified, the need to be able to execute equally well across multiple asset classes has intensified.
- Fee management and disclosure. Funds need a system that allows them to manage their costs, from fund fees to research, and disclose them to regulators and clients, down to limited partner level. With regulations such as MiFID II coming into play, the need for more transparency is growing.
- Data management. Managers need to be able to importing, process and export increasingly large amounts data for reporting – all standardized and adaptable for multiple reporting facilities' formats. As any data specialist will tell you, it's much tougher than it looks.
- Simplifying technology. More hedge funds have bought various off-the shelf software packages over the years to do different jobs. These days, those systems need to be able to speak to each other, and that's a tall order. Systems that aren't scalable or integrated can cost funds a lot of time and money to fix.
Struggling to catch your breath yet? We believe you can navigate through the rough waters with integrated software whose various modules not only address these pain points, but also speak easily to each other for a simple reason: they're built by the same people from the same rigorously tested code. The next few posts will together form a quick, cogent, easily digestible series that'll give you a solid grasp of the operational landscape, so we urge you to subscribe. Next stop, trade surveillance and compliance! Don't forget your fins…