A decade ago, there was nothing wrong with having eight or 10 vendors in place to run a hedge fund operation. But times have changed, as has technology. So much so, that established managers are increasingly looking to reduce overhead costs and complexity by consolidating the number of their critical systems into single or integrated solutions, often delivered on a hosted basis.
One of the key benefits to this is the ability to bring data from all those disparate systems together into a consolidated place where that information is actionable.
"Whether it's reference data, transaction data, portfolio information, compliance data, risk or performance data, in the past managers were storing all of that information and generating reports with that data from multiple places," comments Bennett Egeth, President of Broadridge Investment Management Solutions.
The nirvana, says Egeth, is an accurate, consolidated data accessible both programmatically and directly to users through easy to use tools. "Because the data is much more accessible, it gives fund managers the ability to report and visualise information from a broader set of data that they previously could draw upon, with tools that can provide a level of self service without heavy reliance on development."
Integrating multiple systems can be a daunting undertaking, but achieving much of the benefits can be recognised earlier in a project by starting with a data warehouse. By collecting data from different vendors and systems, the data warehouse becomes the aggregation point within an enterprise, so that managers can then start to consolidate the data for reporting and visualisation.
"A standalone set of data reporting and visualisation tools gives them a way to start to get some of those benefits in advance of changing their entire infrastructure, choosing one that is part of a broader integrated ecosystem ensures longer term benefits." says Egeth. "We have always delivered a data warehouse as part of our emerging manager platform. If you are catching a firm at the point of their launch, before they put in place IT infrastructure that can bring a lot of benefits. Smaller and emerging managers have often tended to have access to higher levels of integration than larger fund managers with more established technologies."
Larger funds realise that the decisions they made 10 years ago are not necessarily choices that they would making today. More complete options exist, hosted solutions are more accepted, and the total cost of ownership can be drastically reduced.
"By having a centralised system it allows you to enrich the data, storing performance and attribution information in the same place, risk information in the same place, your administrator's version of IBOR alongside your version of IBOR. This allows you to produce risk-weighted performance reports, analytics on trading costs, etc," comments Egeth. "While it is sometimes difficult to anticipate all the regulatory changes, the ability to have the data accessible, with history, providence and governance are all foundational to responding and meeting regulatory requirements."
"In terms of the benefits of visualisation, you have the ability to create individual dashboards which can combine information previously stored on myriad different systems to create an individual user experience. If I want to see a performance graph or a commission summary, I can do so easily using a single dashboard," concludes Egeth.
On winning this year's award, Egeth adds: "Better data facilitates better decisions; sometimes it just takes a little help to visualise the data.