Services & Solutions for Hedge Funds

Our professional team of consultants and software engineers has, collectively, multiple dozens of years of experience working in the hedge fund and alternative investment industries. Our staff is prepared to advise managers on both applying and leveraging technology to achieve outstanding business results. Our work spans both advisory roles as well as the actual implementation of solutions.

Specifically, some of the services we offer include:

bullet Documentation Preparation

Prospective fund investors, as part of their due diligence, will evaluate a firm's technology infrastructure. Certainly, part of the evaluation will include hardware and software systems documentation. Even the most well-meaning IT staff intends to prepare thorough documentation, yet, this often does not happen.

Our consultants are ready to take up this task. We'll interview your staff, review prior documentation and monitor existing processes. We'll use the information gained to update and document processes, custom programming code, data flows, counter party resources (data files, reports and web sites) and their contacts.

As an added benefit, we will optionally make the documentation available on your private intranet. This means that the documentation is centrally located, easier to maintain and even more importantly, easier to use. What good is documentation if it is shoved in some drawer...and the drawer is locked...and the owner of the drawer is on vacation?

bullet Design & Implement End-to-End Processing

Hedge funds typically have many discreet software systems. The firm's data needs to be current in all systems and consistently maintained. Rather than have users manually move data between systems (or worse yet, edit data in several places) we can often automate processes that updates one system with data from another system. Do you have an accounting application that needs to capture trades from an OMS? Our experienced software developers will design and code a process to do just that. In fact, we can design and implement, in phases, a solution for creating comprehensive end-to-end processing.

Having end-to-end processes saves time, reduces staff training and increases accuracy. The result is your managers will get more timely reports and costs will be reduced. This is what we mean when we save we "leverage your technology investment".

These are a few examples of discreet tasks that can generally be easily automated while pursuing a goal of end-to-end automation:

  • Prepare and send end-of-day trading files to the prime brokers
  • Prepare start-of-day position files for the OMS
  • Prepare and load trades into an accounting application from the OMS
  • Enrich your firm's data with market data from data venders such as Bloomberg L.P., Thomson Reuters, Intex Solutions, Inc., or FactSet Research Systems Inc., to name a few. Prepare requests for data based on your firm's current positions and prospective investments (utilizing a "watch list").
  • Prepare performance and balance data and load same into a database for your firm's investor relations website.
  • Prepare consistently formatted data files for or from your analyst's spreadsheets.

bullet Enterprise Relational Database (ERD) Solutions

The move by hedge funds to utilizing enterprise wide databases has been primarily driven by four developments:

  • The move to establish relationships with multiple prime brokers
  • The expansion in the number of assets classes in which a hedge fund invests.
  • The need to automate expanded reporting, particularly in the realms of risk and compliance reporting.
  • The need to store enriched data

In the past, generally speaking, it was only the larger hedge funds that had relationships with multiple prime brokers. Since 2008, this has changed. In order to spread risk, mid-size hedge funds and even smaller funds are establishing relationships with multiple prime brokers.

Utilizing the services of more than one prime broker means that hedge funds can no longer depend on their prime broker for reporting services if they want to view consolidate reports. If you custodial a position in GOOG at both MSCO and GSCO, then neither broker's reports (or data files) will give you a complete picture.

An enterprise database that captures trades from all brokers is able to be a data repository that enables consolidated reporting.

In some cases, accounting applications commonly used by hedge funds may not be able to capture trading details for all asset classes in which a fund trades. Positions in these asset classes may be entered into the accounting system via journal entries. If this is the case, then trading details are lost.

An enterprise database can capture trades for asset classes not directly supported by your accounting system.

Even if your firm still maintains one prime broker relationship and does not trade in securities not supported by your accounting application, there are other reasons to maintain an enterprise database.

When data is not centralized resources are wasted maintaining multiple data sources. Errors can multiply. Data gets corrected in one place, but not others. This leads to conflicting reports. More time is wasted attempting to determine what data is correct and then correcting the erroneous data.

An ERD can substantially reduce the problems associated with multiple data sources and data corruption. A well designed ERD becomes the central repository for the firm's data that drives reports which can not typically be produced by current commercial systems. Compliance and risk reporting are typical examples of such reports. Normally neither the OMS or accounting systems are capable of creating either type of reports.

bullet Staffing

Larger investment firms may, at times, prefer to manage and build their own solutions. When projects are in the development phase, however, they can frequently benefit from more staffing resources than the firm is able to allocate to them. We are often able to provide developers who work for a limited duration, under your firm's direction.

Additionally, our staff can offer staff mentoring and project review services. Mid-size hedge funds will frequently employ only one programmer or at most a small team of developers. In such cases the programming staff can often benefit from peer review of their designs and programming code. And on occasion they may even face challenges that they are not able to overcome in a timely manner. Our consultants will assist your team on a short term basis. We'll review designs and code and then make suggestions for improvements. We can also take on the short term challenge of implementing a particularly difficult feature. Think of this as our coaching service.

bullet Website Development

Websites can be used to communicate with investors as well as prospective investors. Typically, a hedge fund's website will make current and historical performance numbers available along with individual investor's account balances. Additionally, fund managers usually publish news articles that have appeared in the press on their site along with staff bios and contact information.

For larger funds, a website can offer even more. For example, a secure area can be set up that employees can log into for instructions during an emergency. Or the site can provide procedural documentation and further contact information which can be used during off hours.

We are prepared to provide all design and programming services needed to create a website that meets your needs.

bullet Custom Software Applications & Reports

Every hedge fund seems to have at least a few internal processes or reports that are unique. Often unique reports were first created for one or two individuals. Then others see them and want to use them too. In fact, often they want to use them, but "just one change" would make a report "so much more useful". This is fine, but the problem comes when it starts to take a lot of time to produce a particular set of reports. Or when only one person knows how to create them and the one person is not available to update them when they need to be updated.

These problems can be resolved through automation. When you automate reports that have a lot of manual steps, you make it so the reports can be run more frequently. They can be run by less skilled staff, and you reduce business risk by reducing the dependency on one or two staff members.

bullet Excel Automation & Redesign

Probably no hedge fund today could survive without Microsoft Excel. A lot of analyst's data resides in spreadsheets that become so large, one may wonder if they will every load. If this is the case, you'll eventually have to consider creating multiple spreadsheets from the one large spreadsheet or moving the data into a database.

You may also have the opposite issue. Your firm's data may be located in dozens or even hundreds of different spreadsheets maintained by many analysts and their assistants. The problem of course is, how do you summarize this data? That's the challenge. It's a challenge that we have met. We designed a process (a quite simple one actually) for one client that allowed them to tabulate data located in nearly 400 Excel workbooks and make the summary data available in Microsoft SharePoint. We were able to do this without requiring any changes to the way the analysts or their models worked.