As we look forward to 2014, we can expect that the hedge fund and investment management industry will continue to evolve and experience change as in years past. As more and more new funds launch, the competition for investors will increase and firms will be hard-pressed to live up to the successes of the top performing funds in the industry.
Earlier this week, we gathered several panels of experts in Boston to share their insights into the hedge fund landscape for startups in 2014 and the tips and advice for firms looking to compete in the changing marketplace. Following is a brief recap of the event.
Building a Hedge Fund is Like Building Any Successful Business
When starting a new firm, it’s critical to think about all aspects or forming a new business. Yes, your investment strategy is important, but if the foundation of your business is not critically thought out, it will wreak havoc for your firm. Following are a few areas you shouldn’t overlook as you go through the launch process.
Categorized under: Business Continuity Planning Cloud Computing Hedge Fund Due Diligence Hedge Fund Marketing Hedge Fund Operations Hedge Fund Regulation Infrastructure Launching A Hedge Fund Outsourcing Privacy Compliance Security Trends We're Seeing
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.
Like David bravely dueling with the larger Goliath, small and mid-sized investment firms are often faced with insurmountable odds when competing against larger (and better endowed) funds. With more experience and more assets, larger firms have the advantage when it comes to soliciting investor allocations. But do these inherent shortcomings equal certain failure? If David can emerge victorious, can’t smaller hedge funds?
Earlier this week, we gathered a panel of experts in San Francisco to discuss this topic at length. Following is a brief synopsis of the topics they covered.
Every once and a while we like to deviate from our business technology and operations articles to look at a new technology that has applicability to consumers as well as businesses. Today we look at the newly released MixBit, which in all honesty, is more applicable to consumers at this point.
MixBit was created by the founders of YouTube and just released today for iOS. MixBit fills the void (if you can call it that) between Vine and Instagram Video. With Vine videos can only be 6-seconds and with Instagram they can be 15-seconds.
MixBit not only takes the bold step of increasing the size to 16-seconds but also makes blending multiple clips together easy.
Aside from the 1 second advantage, MixBit is unique in its ability to let users remix video clips with others they find on the site.
To see what MixBit can do, I created this 16 second “tour” of our Boston office. Nothing fancy, but certainly user-friendly.
In a move likely to redefine the financial industry, the SEC voted this week to rescind an 80-year-old ruling prohibiting hedge funds from public advertising. The ruling comes as the result of the Jumpstart Our Business Startups Act (JOBS Act), which is intended to make it easier for small businesses to raise capital.
The Securities Act of 1933 was originally implemented following the stock market crash in 1929 as a means to regulate and control securities sold, requiring that funds register with the SEC unless they met an exemption.
Under the new rule, hedge funds, private equity funds and other investment firms will have the opportunity to publicly solicit capital via a variety of commercial advertising outlets, including websites, print ads, and social media. Hedge funds have historically been quiet on such mediums, largely due to fear of noncompliance with regulations.
We were recently asked by a COOConnect member about the best sources for information about the strengths/weaknesses of the various hedge fund applications including front, middle and back office. Since we know many folks have this same question, today we are going to expand on the answer given by our expert, Mark Coriaty.
Now the way a hedge fund uses an application will vary based on its investment strategy, and therefore the perceived strengths and weaknesses may vary as well. However, there are multiple ways to establish a baseline of strengths and weaknesses.
Service Provider Reports: Balancing Bias with Value
First up are free reports from hedge fund service providers such as Eze Castle Integration. Each year we publish a benchmark study that outlines top applications used in select front, middle and back office categories by hedge funds. This report will provide a baseline of the top three application vendors used in each category, but doesn’t dive into specific feature sets. The report can be downloaded HERE.
Vendor reports can be helpful in getting an initial understanding of the most frequently used applications and top features used by firms. You should always consider the source, as some vendor reports or whitepapers will be biased.
It is becoming cliché to say, but the investor due diligence process has truly evolved from a ‘check the box’ activity to a detailed and analytical process. Today, hedge fund investors want to see a tested investment strategy coupled with institutional-grade business processes.
Here at Eze Castle Integration, each year we help more and more hedge fund clients complete the Technology portion of investor due diligence questionnaires (DDQ). So we thought it would be helpful to share some of the more common technology related questions we are seeing. Not surprisingly you’ll see security and disaster recovery questions on the list.
As you consider your responses to these questions, keep in mind that in some cases investors are more concerned with your decision process as opposed to seeing the “right” answer. The reality is that often the “right” answer varies from firm to firm and depends on a number of factors, including investment strategy.
Last week, we hosted a webinar covering AIFMD’s impact on US based hedge funds. The event featured Bill Prew, Founder of INDOS Financial Limited, and provided a high level overview of the changes that AIFMD will potentially bring to the alternative investment industry. Prew specifically focused on how US based managers will be impacted by this legislation. Read on for a summary of the main topics covered during the event, including an overview of AIFMD and the considerations and upcoming changes for US managers.
About the Expert
Bill Prew is the founder of INDOS Financial Limited. Before founding INDOS, he was the chief operating officer at James Caird Asset Management, a hedge fund with offices in London and New York. He has also served in various senior roles at Barclays Global Investors and PricewaterhouseCoopers. Following a summary of the information presented by Mr. Prew during our recent webinar.
Brand Equity. It sounds important. It sounds like you should have it. But what exactly is it? And why does it matter?
We recently conducted an internal training to talk about just that, and we thought we’d share some of our insights and tips with our Hedge IT audience!
Brand equity is commonly defined as a set of assets linked to a brand’s name and symbol that adds to the value provided by a product or service to a firm and/or its customers. Traditionally, branding elements include a company’s name, logo, images and perceptions.
For example, Eze Castle’s brand can be seen throughout our corporate website (pictured here) in the logo, colors and fonts we use.
Last week, I held an internal training session to educate my fellow Eze Castle employees on how to leverage the social networking tool LinkedIn. I think the information is valuable for anyone, however, so I’ve decided to share it with you, too!
With over 135 million members, LinkedIn has grown exponentially since its inception in 2003 and is the most respected “professional” social networking site in the industry. And regardless of what your reason is for using LinkedIn (recruiting, prospecting, job searching, etc.), it is essential that you put your best foot forward through your personal profile and activity.
The presentation below outlines a few tips to help you get the most out of LinkedIn, including:
- Building Your Personal Profile
- Customizing & Organizing Your Profile
- Making & Soliciting Recommendations
- Adding Applications
- Joining & Participating in Groups
- Expert Tips for Launching a Hedge Fund in a New Environment
- Answering the FCA's Dear CEO Letter on Outsourcing with Some Practical Steps
- Reflecting on What We're Thankful For This Thanksgiving
- Finding Your One-Stop Shop: The Benefits of Choosing an All-Inclusive IT Provider
- Three Ways Your Cloud Provider Can De-Stress Your Life
- business continuity planning
- cloud computing
- data loss prevention
- disaster recovery
- eze castle milestones
- hedge fund due diligence
- hedge fund marketing
- hedge fund operations
- hedge fund regulation
- help desk
- high frequency trading
- launching a hedge fund
- privacy compliance
- project management
- real estate
- startup & relocation
- trends we're seeing
- videos and infographics