Hedge Fund Street

VanthedgePoint offers new solution for Small Hedge funds

The Hedge Fund market is dominated by big players. The smaller funds always find themselves neglected, but not any more. VanthedgePoint Group has developed a new middleware technology that can help smaller funds in their operations.

The technology which is yet to receive a patent, provides services that can help small funds achieve better manager productivity, reduce costs and increase its marketability. With better economies of scale the smaller funds should be able to attract more investors. They will also get the attention of prime brokers and administrators, who otherwise are more focused on the bigger leaders.

This will establish a better level playing field between the large hedge funds and the small hedge funds. The solution will be launched in the second quarter of 2006. Yahoo Finance reports:

VanthedgePoint's unique technology delivers an integrated services platform that improves manager productivity, reduces operating costs and increases marketability to investors. The result is a hedge fund that has lower operational risk and a reduced cost structure, which makes it more attractive to potential investors.

Hedge funds: Third Party Vs Own technology platform

The Hedge Fund industry has grown by leaps and bounds. Operational and administrative processes have been set up for better running of the funds. However what is missing right now is the proficiency to take care of the technology associated with the processes. Till now hedge fund mangers have been relying heavily on third party technology infrastructure to carry on their activities.

Their prime focus is on asset management and they leave no stone unturned in order to get the best investment talent in the industry. But the technology that they use is generally an extension of the one offered by Prime Brokers. Prime Brokers are business units of major investment banks. They source transaction flow through these units. Despite the mammoth size if the industry, the reliance of hedge funds on outsourced technology is surprising.

While most of the hedge funds are small to mid level and cannot afford maintaining an in-house technology, some hedge funds are reaching the scale of growth and complexity where they perhaps would consider recruiting their own CTO. More so because of the inability of Prime Brokers to offer such diversity. For Prime Brokers hedge funds are a big chunk of their business, something they just cannot ignore. For example, Hedge Funds are estimated to be providing an average of 35% of daily transactions volumes through the major exchanges in Europe.

No surprise then to see these brokers bending backwards to provide what ever the hedge funds demand. They have been known to provided a variety of services in the securities transaction services including research, secured lending, trade execution, risk management, transaction processing, clearing, settlement and custody services to its ‘prime clients’. For this they charge an individually structured and agreed fee.

But the question still remains, should the hedge funds invest on their own technology setup. The question becomes more relevant for those fund managers who manager several funds at one time. For them the additional responsibility of making the third party technology work seamlessly is an additional burden.

For Prime Brokers, this is good business. Not only are the volumes large, hedge funds come with minimal financial regulations. Hence the ‘soft commissions’ are definitely permitted. Also to be noted is the fact that the disclosure of commercial, reciprocal arrangements with the Prime Brokerage Units are at the complete discretion of the Hedge Fund manager. What it means is that if the fund does not want to disclose their dealings with the Prime Broker to their investors, they are free to do so. I T Director reports:

“New financial products are the lifeblood and success ingredients for some funds. Technology is required to ensure that fund managers can deliver them efficiently and at the necessary scale for commercial success.”

Netage Solutions Appoints Mark Bimonte as Regional Manager for East Coast operations

With the hedge fund industry growing at a phenomenal pace, the need to manage investor money more effectively is the need of the hour. Investors are demanding more professionalism from their hedge funds. The software industry catering specifically to alternate asset industry also seems to be growing. They help the investment managers from varied fields like hedge funds, private equity, venture capital and funds of funds to manage investor’s money well. Apart from this they are able to improve investor relations and address compliance requirements through these software.

Netage solutions is one such vendor that is focused on providing complete software solution to demanding alternative asset industry including hedge funds. In order to cater to the growing demand for comprehensive software for the hedge funds industry world wide, they have opened offices in several key cities such as Boston, San Francisco, London, Sofia and New York. Even the team is undergoing expansion. They have recently appointed Mark Bimonte as Regional Manager for East Coast operations and head of Netage’s New York office. He will look after the regions need for Netage’s suite of hedge fund software products, InvestorDynamo™.

Mr Bimonte has about six years of experience in selling software for alternative assets. He will be responsible for directing his sales team in promoting flagship enterprise applications, sales coaching, and territory management. The appointment was made public by Stuart Sheppard, VP of Sales for Netage Solutions. Mr Sheppard described Bimonte as a ‘seasoned sales professional’ who has a sound background of selling alternative assets software. It may be noted that Netage Solutions provide global front-office software for the alternative assets industry. Bobsguide.com reports:

“Mark Bimonte brings to Netage six years of sales experience in the alternative assets software industry. Before joining Netage, Mark held several sales management positions at an investment information data provider and leading hedge fund software vendors.”

Read More: Hedge Fund CRM and Compliance Vendor Netage Solutions Appoints East Coast Sales Manager

Accenture to provide data management services to Citadel Investment Group

Citadel Investment group has retained the services of Accenture to take care of its data management needs. Citadel manages assets of over $12 billion along with its affiliates. Accenture’s services have been retained for a period of 10 years. In the course of this 10 year period Accenture will be responsible for range of standardization, infrastructure and support services for reference date. Reference data is a category that includes codes, identifiers and other information pertaining to stocks, bonds and other financial instruments.

A holistic approach will be employed wherein the software services company will be in charge of both incoming as well as outgoing data. This will ensure that all the information pertaining to the client are accurate and well sorted so that easy retrieval of information is possible at any step. The deal also includes providing grid based infrastructure apart from complete data and information technology administration. Chronline.com reports:

“The deal covers a range of standardization, infrastructure and support services for "reference date," a category that includes the codes, identifiers and other information pertaining to stocks, bonds and other financial instruments.”

Read More: Accenture bags 10-year deal with large hedge fund

Unique Data Warehousing solution for Hedge Funds unveiled by Bank of New York

With the world of hedge funds becoming bigger by the second and its complexities increasing, the need for a strong data warehousing software has never been greater. In response to this demand, Bank of New York has developed data warehouse exclusively for hedge funds. The software is housed within the Bank's technology platform for hedge funds known as Praeeo. It is claimed to be an automated and secure solution for meeting the real-time information needs of hedge fund managers. The data warehouse provides the fund managers of funds of hedge funds with the much needed complete range of reporting and transactions.

The system is now capable of providing services such as consolidated reporting and distribution, transparent trade work flow management and the works. The new enhanced system can now also act as a state-of-the-art storage resource for business records that can enable a client to store data about its fund structures, financial statements and dealing forms. The executive vice president at The Bank of New York, Brian Ruane mentioned that data warehouse is a proof of their strategic focus on providing innovative, end-to-end technology solutions to their hedge fund clients. Fineextra.com reports:

“The Bank of New York, a global leader in securities servicing, has created a unique data warehouse for funds of hedge funds that provides an automated and secure solution for meeting the real-time information needs of hedge fund managers.”

Read More: Bank of New York develops data warehouse for hedge funds