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
Starting a hedge fund is an intensive task and there are many aspects of the business that a portfolio manager must consider. Expectations are higher than ever, and investors want to see that new hedge fund startups are taking the right precautions and steps to ensure that both the investment strategy and business operations are sound.
There are a wealth of considerations to review before starting a new hedge fund, and truth be told, most of these points are just as important to keep in mind if you are an established fund. Take a look and you’ll notice these best practices apply to more than just new launches.
Last month, former Secretary of Homeland Security Michael Chertoff said the most significant threat we face as a nation is cybersecurity. That’s a pretty jarring statement given the threats our country faces in terms of terrorism and war, for instance. But the reality is, cyber networks have become the gateway for risks both on the global terrorism front as well as within our internal circles at our places of business.
With watchful eyes geared towards security threats, interest in cybersecurity insurance continues to rise. The Department of Homeland Security and the Department of Commerce have identified cybersecurity insurance as a viable opportunity to thwart the effects of security breaches and attacks by:
- Promoting widespread adoption of preventative measures;
- Encouraging the implementation of best practices by basing premiums on an insured’s level of self-protection; and
- Limiting the losses that companies face following a cyber-attack.
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.
This week Opalesque Radio featured an interview with Bob Guilbert, managing director here at Eze Castle Integration, on addressing operational challenges facing hedge funds with cloud solutions.
The 9:30-minute podcast covers a range of topics. You can listen to the full podcast HERE, just jump to the sub-features that interest you most below.
There has been a lot of discussion about, “best practices” lately when it comes to business continuity and disaster recovery planning, especially as we approach the first anniversary of Hurricane Sandy. In fact, I had to pleasure of speaking about some specific DR and BCP best practices earlier this week during a webinar, 10 Signs It’s Time to Rethink Your Approach to DR/BCP. You can listen to the replay here.
If you do a Google search for “business continuity and disaster recovery best practices,” you’ll get several options to choose from. However, if you are in working in the financial industry, the first resource you should consider taking a look at is the best practices guide published by the SEC, FINRA and CFTC in August 2013.
Sandy was a remarkable storm that affected many businesses along the East Coast, including hedge funds and investment firms based in the tri-state area. Post-Sandy, regulatory bodies including the SEC, FINRA and CFTC met with several registered advisors to ensure they were prepared for future disasters. Based on the findings, these organizations developed a four-page best practice guide for investment firms.
Welcome back to Hedge IT! Now that you’ve read Part I of our Cloud Survey Findings recap, let’s take a look at some of the other results we found.
One of the most interesting findings our 2013 survey revealed was the level of satisfaction investment firms have with their current cloud deployments. Over 90 percent of respondents indicated their clouds (whether public, private or hybrid) were meeting or exceeding expectations in each of the following areas:
- Reducing IT costs
- Improving users’ IT experience
- Simplifying management of IT
- Allowing firms to reallocate resources to more valuable activities
- IT performance, scalability and resiliency
- Providing a high return on investment
Earlier this week, we announced the findings of our 2013 market survey: Examining Cloud Usage within the Investment Management Industry. If you haven’t already, check out our infographic here.
If you’re not up for reading the full report yet, here’s Part I of our Cloud Survey Recap. Be sure to come back next Tuesday for Part II!
As a follow up to our 2012 Cloud Adoption Trends Survey, we wanted to take a closer look at how and why hedge funds and investment firms are leveraging cloud services in today’s marketplace. Working again with IDG Research, we surveyed 101 investment firms across the U.S. about their current and planned cloud usage.
Firms covered a wide range of asset bases: 38 percent reported less than $100M; 20 percent fell between $100 and $499.99M; 19 percent between $500M and $999.99M; and 20 percent said they had more than $1B.
Do you want the inside scoop on how and why your investment firm peers are using the cloud? We're in the know.
Check out our infographic for a sneak peek at the results of our 2013 survey: Examining Cloud Usage within the Investment Management Industry. Next week, we'll share a more detailed recap of the findings. If, of course, you can't bear to wait until next week, you can download our full survey report here.
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.
- 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