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Conclusion

Hedge fund managers have gone to great lengths to build automated operational infrastructure in the past decade. But unlike most... Read More



Barriers and drawbacks

One of the biggest challenges for any COO is securing funding for new projects. Most CEOs and directors, especially at smaller hedge fund managers, are likely to prioritise short-term obstacles over speculative issues. Redirecting resources to technology upscaling is not an easy sell, but it is by no means the only barrier to automation. In this third section, we look at the issues preventing uptake and the drawbacks giving COOs – and CEOs – pause for thought.



The means of automation

From building systems and creating algorithms in-house, to outsourcing processes to specialist vendors, hedge fund managers large and small are pursuing a variety of strategies in their efforts to automate. In section two, we provide a benchmark for firms contemplating how best to build up their own automated operational infrastructure, examine automation’s effect upon hiring, and forecast where managers will go next in their quest to automate.



Why and what?

With the rapid pace of technological development and the increasing cost of running a hedge fund business, automation is becoming ever more widespread. But which types of manager are driving this trend? The first section of this report establishes the extent to which managers are automating their operations, the processes they are focusing on, and why they are doing so.



Introduction

Executive Summary From dwindling resources to human error, automation can help solve many of the operational problems hedge fund managers... Read More



Automating Operations

How, what and why hedge fund managers are automating and the barriers they must surmount in doing so



Automation in hindsight

Hindsight is a glorious thing. We would all make decisions differently given the chance. Our final section looks back at the challenges firms faced at different stages in their lifecycle. For internal solutions, we identify the biggest challenges and where they were most prevalent. For outsourced solutions, we discuss the most common and useful ways to source, monitor and review providers of automated solutions. The objective – an opportunity to look back, as a means to move forward.



Cost Management

Profit margin trends and cost saving techniques in hedge fund management



Prime Broker Pressures

Identifying and alleviating the tensions in the manager-prime relationship



Business Diversification

The rewards and pitfalls for hedge fund managers when expanding into unfamiliar territory