A hedge fund manager doesn’t have the luxury of assuming that his or her IT issues are just like those of any other business. With all of the challenges associated with regulatory compliance, risk management, database usage, scalability, and sheer performance, a hedge fund manager needs IT experts with the specific knowledge required to optimize IT systems for these requirements.
Here are some of the top issues to consider:
Hardware That Can Run Advanced Algorithms
Modern hedge fund managers rely more and more on advanced algorithms to assist their decision making as they evaluate investment options. To accomplish this at the pace required in today’s trading environment, leading-edge computing capability is typically needed. Hedge fund professionals can’t afford to use default computers and servers in their office. You need a specialist in high-performance computing to make the most of the latest investment analysis approaches.
For example, “machine learning” is one of the most advanced strategies for trading algorithms. With this approach, the software evolves as it identifies new patterns that humans might miss, while seeing what works and what doesn’t. This is a very computing-intensive approach, so advanced computing hardware is needed. This requires a real expert, not just the average IT resource out there.
Given the scrutiny on investments and stock trading these days, it is absolutely critical for a hedge fund manager to understand all of the regulatory requirements. This is often handled with a regulatory compliance “dashboard” that tracks all of the critical issues. These include reporting in the appropriate SEC format, record retention, portfolio monitoring, and communication archiving. Good systems will provide compliance certifications and automated reminders in a calendar format to make sure that a hedge fund business stays compliant. These features can tremendously reduce the burden of tracking the required information manually. For example, verifying that there are no conflicts in any trading is very time intensive, so a tool that does that automatically is extremely valuable. Any features that reduce manual labor can be a great investment and reduce the risk of a very expensive non-compliance issue.
Security is always at or near the top of the list of requirements for an IT system, whether it is in-house or in the cloud. This is especially true for hedge fund managers with large trading volumes and values involved; too much is at risk to take system security lightly. An expert IT consultant will know how to tailor the security features of an IT system to match the needs of a hedge fund manager.
Finally, a potential challenge on the IT front for hedge fund managers is scalability. The volume of trading is growing significantly over time, and with the proliferation of advanced trading systems, there is no reason to think that this trend will change. A hedge fund manager needs a system that can scale seamlessly as the business grows. Again, it is critical to let IT experts identify and evaluate the best options.
Race Computer Services is the trusted choice when it comes to staying ahead of the latest information technology tips, tricks, and news for hedge fund managers or any other business with complicated IT issues. Contact us at (973) 343 or send us an email at -5479[email protected] for more information.