Since enterprise computing gained traction in the 90s, hedge fund managers have been looking to find a way to increase efficiency and mobility. Many financial services firms found those things in the cloud, but hedge funds shied away from the technology because of concerns for security and data ownership. However, increasing regulatory pressure and a resurgence of structured products driving demand for computer power mixed with static IT budgets, many firms are beginning to consider the cloud the best option. Cloud solutions offer the means to access in-demand computing power while still being easy on the bottom line.
"Given the potential savings, the contraction of Wall St. budgets and a market that requires more complex calculations to be completed in ever-shortening time frames with ever-greater accuracy, …the financial services industry needs to embrace cloud technology on a much expanded scale," said Kevin McPartland, head of research for Greenwich Associates' market structure and technology practice.
According to research by Greenwich and Associates, adopting an enterprise cloud solution could help hedge funds reduce computing costs related to portfolio analysis by 50 percent. Managers seem to be taking notice of the savings, too. In a survey cited by HedgeWeek, 87 percent of hedge fund managers were utilizing the cloud in some fashion.
Cloud offers more choices
Not only does the cloud offer dramatic reductions in costs, it also allows increased mobility and flexibility. Hedge fund managers work in a fast paced environment and utilize a wide variety of tools to help them analyze markets, execute orders and perform other functions. The ability to connect all of those tools in one platform boosts efficiency and improves business processes. Hosting analytic tools in a dedicated enterprise cloud offers direct market access and the ability to track risk limits in real-time. Cloud-computing allows managers to use what they want when they need it, making them more engaged and productive.
"It's not only software that a manager can access from anywhere, it's also their work files, their data, their emails," said HedgeGuard founder Imad Warde. "When a manager connects to the cloud to access their portfolio management system they want to see the whole picture. That means, using a laptop, no matter where they are they can access all the fund's data and intelligence. This will allow the office to be truly mobile."
Works faster with the cloud
Another benefit of the cloud is the increased speed of action if offers, making real-time analysis and reaction possible. A manager connected to their firm's cloud platform can access analytic tools, risk management intelligence, client information and any other material needed to respond to market changes in an actionable way.
"Managers require not only better technology, they need it to be connected to reduce manual tasks," said industry expert Alok Misra. "Our role over the next couple of years will be to do things that funds can do today, such as find the right investors and market their funds."