A Cottage Industry Goes Mainstream: Hedge Fund Technology in the Spotlight

April 21, 2004

Abstract

Boston, MA, USA April 21, 2004

 

The market forces affecting the hedge fund industry are too powerful to ignore. New regulatory requirements and the entrance of large traditional asset management firms are changing the landscape of the hedge fund industry.

In a new report, " ," Celent provides an overview of the various technology applications available to hedge fund firms and outsourcing services with fund administrators or prime brokers. The report also features current and anticipated trends in the marketplace.

Prime brokers, fund administrators and technology providers are converging on hedge fund managers. These three groups are eagerly adding supplementary services or launching new or enhanced solutions especially for the hedge fund community. "With so many providers clamoring to serve this market, everyone may wish they were a hedge fund manager," says

Denise Valentine, Celent analyst and author of the report.

As the hedge fund market heats up, hedge funds are looking to technology to maintain their competitive edge. Celent expects hedge funds will by and large avoid building these solutions in-house, however. Most solutions built in-house simply do not offer the competitive advantages of those built by professional technology vendors.

Hedge funds want technology vendors to help them improve their infrastructure and provide their constituents with access to enhanced support. Implementation of technology solutions that include formal business processes immediately provides a baseline for setting internal controls, enhancing the firm痴 credibility with prospects and clients.

It is only a matter of time before the SEC requires registration by hedge funds. Building the internal controls and preparing for a future with an increasing number of competitors is a progressive stance for the coming new era.

A

Table of contents is available online.

of Celent Communications' Retail Securities & Investments and Institutional Securities & Investments research services can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.

        

Send mail to info@celent.com with questions or comments about this Web site.

 

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

 

Boston, MA, USA April 21, 2004

Hedge Fund Technology

Return to report Abstract

 

EXECUTIVE SUMMARY 3
INTRODUCTION 4
KEY TRENDS 5
TECHNOLOGY & SERVICE STRUCTURE 7
HEDGE FUND TECHNOLOGY 8
  Trade Order Management 8
  Trade Execution 8
  Program Trading 10
  Portfolio Analytics 10
  Portfolio Accounting and Management 11
  Partnership Accounting 12
SERVICE PROVIDERS 13
  Prime Brokers 14
  Fund Administrators 15
  Benchmark Providers 16
FUTURE TRENDS 20
OBJECTIVITY & METHODOLOGY 22

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