First and foremost, Happy New Year everyone!
2014 has officially begun, and as with every New Year, it is important to reflect on the previous year and set goals for the future. Many of the resolutions that we made last year are still prevalent this year because they are foundational for a hedge fund’s success. This year we are offering a few more critical recommendations to ensure that your company and IT operations run efficiently and effectively.
The results from our Global Hedge Fund Technology and Operations Benchmark Study are in and here is a snapshot of the 2013 findings. You can find the complete report here. We surveyed 538 buy-side firms across the United States, UK and Asia in order to discover their front, middle, and back office technology and application preferences.
All survey respondents fell into the following categories within the financial industry: hedge fund (60%), asset/investment manager (13%), private equity firm (8%), fund of hedge fund (5%), non-financial firm (5%), advisory firm (1%), broker dealer (1%), venture capital firm (1%), quant fund (1%), or ‘other’ (3%).
The firms resided in three different asset classes: 30 percent reported their AUM as $100 million and under; 32 percent fell between $101 and $500 million; and 38 percent reported over $500 million in assets under management.
In regards to investment strategy, long/short equity continues to dominate as the most favorable with 45 percent of respondents reporting this to be their primary investment strategy. Other preferred strategies include fixed income (8%), credit (7%), global macro (6%), emerging markets (6%), distressed debt (5%), and event driven (4%). The top prime brokers employed by firms in 2013 are Goldman Sachs, Morgan Stanley, Credit Suisse, JP Morgan and UBS (same as last year).
Now let's look at front, middle and back office applications most commonly used at hedge funds.
They say a picture is worth a thousand words so here is an infographic of our 2013 Global Hedge Fund Technology Benchmark Study that explores the most common front, middle and back office applications and technology used at today's hedge funds.
First and foremost, Happy Halloween!
In honor of Halloween, I’m going to share a trick and a treat about the world of social media and investment firms.
First the trick.
Did you hear the story about how shares of bankrupt Tweeter soared when Twitter announced its IPO? If not, here goes. According to WallStreetInsanity, on October 4, 2013, “shares in bankrupt TWTR Inc. (OTC: TWTRQ) were up over 1500 percent as the company’s stock soared from $0.0 to $0.15 on extremely heavy volume. Seems some people thought the consumer electronics retailer was Twitter.”
This story demonstrates that traders are monitoring social media outlets for investment ideas even if they are not personally participating. It also shows that many of those folks buying TWTRQ didn’t quite understand how an IPO works or what Twitter will be valued at (certainly not pennies), but we’ll ignore that fact for the sake of this article.
In traditional fashion, Apple conducted their latest smartphone release event today at their headquarters in California. This year’s hot topics were the company’s two new product models: iPhone 5C and iPhone 5S, as well as the new iOs7 software update. If you missed the announcement, here’s a quick recap:
iOs7 will be officially released on September 18. The new software has a beautiful, feature-rich design. One of the key feature changes is the restructuring of the camera roll. iOS7 now groups all of your photos into different moments (legible thumbnails), based on time period, similar to iPhoto. There are also additional photo effects that can be applied during or after shooting.
Would you be ready if there were an emergency today? Would your employees know what to do? September is National Preparedness Month (NPM) which is sponsored by the Department of Homeland Security and FEMA’s The Ready Campaign in an effort to increase awareness for individuals, businesses, families and communities. NPM aims to encourage the public to make preparedness a part of their daily lives and stresses the importance of being ready for the unknown.
Why should you focus on being prepared?
By teaching your employees why to prepare, your firm will not only demonstrate its importance, but employees will also maintain this knowledge and expertise that will help keep the business operational. Preparation can mean the difference between a successful and failed recovery, both personally and professionally. Educating your employees on what they’ll need at home, where to go, who to contact, etc. will equip them with the right information they’ll require at the time of an incident. With the proper information readily available, employees can focus on helping resume business operations more quickly.
In contrast to frequent news articles declaring that the end is near for the PC market, a new study by IDC reports that consumers still rely on PCs most of the time.
The Intel-sponsored InfoBrief surveyed nearly 4,000 U.S. adults about their computing trends and purchases and found that 97 percent of them use a PC as their primary computing device. Yet conflicting reports show that PC sales are declining at rapid rates, and tablets, in particular, are eating up the market share. Lenovo reported this week that their tablet and smartphone sales outnumbered PC sales in the first fiscal quarter – a quarter in which all of the top five PC vendors saw a decline in shipments.
Mirror, mirror on the wall. Ok Glass, who is the fairest of them all?
This is how I envision the modern day queen in Snow White receiving her daily validation. Why? Because Google’s Glass, a wearable smartphone, has the potential to shift how we function and put us all on the path to talking to ourselves on a daily basis.
Google Glass is one example of how smartphone technology is ditching the confines of phones and moving into new form factors including glasses and watches.
Currently, about 8,000 “Explorers” are testing Glass and experiencing how beginning a sentence with “Ok Glass” can dramatically change how you receive information. Earlier this month, Google provided more details on Glass and promised wider availability in 2014. They also took steps towards squashing privacy concerns.
The Glass screen, when activated, looks “a lot like a 25 inch color TV floating about 8 feet in front of you” and weighs about as much as a pair of sunglasses.
This week, Research in Motion officially became known as BlackBerry Ltd. But will the name change really change anything for this struggling company? It’s hard to say.
BlackBerry’s woes have multiplied of late, with personnel changes, price cuts and stakeholder dissatisfaction making headlines. Just this month, two long-time board members announced they will be stepping down, while CEO Thorsten Heins continues to ask shareholders for patience as the company tries to reinvent itself and compete with its successful rivals.
On the smartphone market front, BlackBerry’s struggles continue. According to Gartner, market share has dwindled from over 50 percent in 2009 to less than 3 percent. BlackBerry’s newest device, the Z10, has already lost its luster. US smartphone carriers including AT&T and Verizon have slashed prices from $199 to just $99, less than four months after the phone’s initial release. Retailers like Amazon and Best Buy are doing one better, and selling the phones for as low as $49 under contract.
The Bring Your Own Device (BYOD) trend is certainly nothing new (we’ve been talking about it here on Hedge IT for months). So, now that this movement has hit the financial services sector, and is clearly here to stay, the next critical step is to develop a thorough BYOD policy to help manage this transition at your firm.
Some items to keep in mind when developing your firm’s policy include:
Company-owned mobile devices should be issued to – and personal devices approved for – only those employees who require immediate and frequent contact with co-workers, clients or partners regardless of whether they are physically located at their desks.
Devices should only be approved in situations where the productivity gains outweigh the costs incurred by the organization to support and manage the device.
As you set out to establish your firm’s BYOD and mobile device management strategies, be sure to consider each of the following areas in order to ensure your policies are comprehensive and the firm is protected from potential security incidents.