Hedge Funds Prefer Bloomberg and BNY ConvergEx OMS

Technology remains a priority for hedge funds, according to an IT study conducted by Eze Castle Integration.

http://www.advancedtrading.com/articles/229402147

 

Eze Castle Integration, the provider of IT services and consulting to hedge funds, released its 2011 Hedge Fund Operations & Technology Benchmark Study of more than 220 hedge funds and alternative investment firms.

The combination of preparing for regulations and the demand for greater investor transparency is resulting in a strong focus on deploying and optimizing technology to manage, protect and more effectively use data, from the front to back office.

Here are some findings:

Market Data: The vast majority of firms use Bloomberg for their market data, however Thomson Reuters continues to be a significant player in the market.

 

Market Analytics: Forty-three percent of firms use multiple vendors for market analytics. The most popular combinations were Bloomberg with Capital IQ and Bloomberg with Thomson Reuters.

 

OMS/EMS: BNY ConvergEx's Eze OMS was the most widely used system among respondents.

 

Middle and back office operations are being more closely scrutinized as investors expect sound operational practices that minimize investment and headline risks.

 

Additionally, the Dodd-Frank Act is contributing to back office technology adoption of email and instant message archiving.

 

Additional findings include:

 

Portfolio Accounting: Advent is the most popular vendor among survey respondents, however it is a diverse market with multiple other vendors cited.

 

Risk Management: Respondents use a broad spectrum of vendor solutions while 19 percent cited using either Microsoft Excel or a proprietary in-house system.

 

Mobile Devices: BlackBerry is used by 95 percent of respondents; however, signs point to an increase in iPhones, iPads and other tablets in the future.

 

Instant Messaging: AOL Instant Messenger is used by 76 percent of respondents, however many use it in addition to other IM platforms including Bloomberg Messaging or Yahoo Messenger.

 

Study Demographics Of 223 total firms who responded, 56 percent had assets under management (AUM) less than $250 million. Seventeen percent of respondents had an AUM of between $250-750 million at the time of the survey, and 27 percent had more than $750 million in assets. Other demographic information includes:

 

The majority of firms have one office location, which is in the United States. Only about one fourth of firms have an international office and/or multiple office locations.

 

Thirty-five percent of firms use a multi-strategy approach; of those firms, more than half said they trade Long/Short Equity as part of their strategy set.

 

There was little to no variance between primary and secondary prime brokers, with Goldman Sachs, Morgan Stanley, JP Morgan and Credit Suisse maintaining a stronghold over the majority of firms.