18
I
Citi Prime Finance’s 2011 IT Trends & Benchmarks Survey
As shown, rather than a hedge fund manager having to rely on
isolated reports from multiple systems, the model is evolving to
provide consolidated reports from all these different underlying
platforms via one data management solution.
That data management solution is built upon a custom
warehouse specially tuned for the hedge fund industry to
normalize reference and market data that needs to get
distributed among various systems. The data management
solution further provides holistic reporting tools and
dashboards as an integrated part of the offering to enable
powerful portfolio views, mixing position details together with
performance, risk and fnancing information.
The added beneft of thismodel is that the hedge funds deploying
such solutions become less beholden to any one underlying
system. That is, once the data structure has been defned
and integrated into the database, component systems can be
substituted for newer systems, should better options become
available in the market. To the extent that the components
of the infrastructure are integrated via a services-oriented
architecture, the task of substituting applications becomes even
more streamlined.
Market Leaders Leverage Data Solutions
to Create Differentiation
Having all of this data available to generate reports from a
single, normalized source greatly simplifes the task of meeting
the transparency and reporting demands of investors and
regulators. These types of platforms also integrate easily with
other tools created to satisfy these audiences.
Routine investor information can be stored within a basic
vendor Client Relationship Management (CRM) system; drawing
from this source, there are, additionally, a handful of vendors
who have integrated funds’ customer contact information with
investor statements from various administrators. Between
these data sources and the manager’s core data repository,
robust investor reports can be created and distributed.
Once these data elements have been combined, investor liquidity
information can be driven off of this platform and provide
the fund manager insight into upcoming subscriptions and
redemptions. Some of the hedge fund-specifc vendors in this
space include SS&C’s FundRunner, one of the earlier packages
to focus on this segment; Backstop, Digiterre, Imagineer and
Pertrac—which also services the fund of funds community—are
additional suppliers in this category.
Risk
Risk
Portfolio
Management
Financing
Portfolio
Management
Financing
Risk
Portfolio
Management
Financing
DISPARATE REPORTS
Investment
Management
Regulatory
Warehouse Layer
Investor
Transparency
UNIFIED DASHBOARDS
Web Services
OLD
COMPONENT INTEGRATION MODEL
NEW
Chart 11: Advantages of Data Management Solutions
“We report off of a customized, centralized repository, which
takes feeds of clean data from multiple upstream systems.”
– CTO of UK-based Hedge Fund Managing > $5 Billion USD
“ Risk and portfolio management are married now, so if you
don’t have modeling as an extension of your platform,
you’re at a disadvantage.”
– Business Development lead for a
Portfolio Management Provider