Citi Prime Finance’s 2011 IT Trends & Benchmarks Survey
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Infrastructure providers are leveraging new delivery models and cloud technology to offer emerging managers
off-premises hosting abilities, allowing these funds to more quickly implement capabilities with less capital
outlay; this marks a completely new model for the hedge fund industry, which we’ve dubbed “Hedge Fund 3.0.”
• As has been the case for several years, hedge funds of all
sizes will continue to leverage off-premises data centers to
host their disaster recovery environments and suit their
continuity of business needs.
• What has changed in recent years, however, is the
emergence of a new breed of managed service providers
focusing almost exclusively on the hedge fund space that
are looking to leverage cloud computing technologies in
order to offer “infrastructure-as-a-service.”
• By utilizing these offerings, new funds looking to launch
can speed their time to market while minimizing their
capital expenditure. Having this option available also gives
established hedge funds new opportunities to rethink their
approach as certain trigger events occur.
• Growing funds will increasingly look to the “software-as-
a-service” model for installing new applications, choosing
whether to access these systems via the vendor’s own
hosted data center or via the infrastructure the manager
itself rents from a managed service provider.
• Other funds will consider transferring pieces of their
infrastructure to data centers as on-site hardware becomes
obsolete and needs to be replaced.
• The largest funds, however, having an entrenched on-site
data center model, are unlikely to adopt these technologies
as cost savings are unlikely to balance the lost opportunities
and disruptive potential that a massive migration project
would entail.