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.
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.
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.
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.
The rewards and pitfalls for hedge fund managers when expanding into unfamiliar territory
5 September, 2017
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