2012 Hedge Fund Operations & Technology Benchmark Study

Hedge Fund Operations & TechnologyBenchmark Study 2012

AgendaSurvey Methodology

Respondent Profile– Assets Under Management– Investment Strategy– Offices/Employees– Prime Brokers

Findings– Front Office – Middle & Back Office

Looking Forward

Survey Methodology320 Total Respondents

Financial Services Firms

Survey completed in 1st half of 2012

Respondent Profile

Respondent Profile

Respondent Profile

• Top single strategy = Long/Short Equity

• Of multi-strategy firms, two-thirds trade Long/Short Equity as one of their investment strategies.

Secondary Prime Brokers mirrored those in the Primary category. Top 4:• Morgan Stanley• Goldman Sachs• JP Morgan• Credit Suisse

Data Findings

Front Office

Order Management System

Market Data Vendors

Market Analytics

Research & Document Management

Order Management SystemConvergEx’s Eze OMS, Bloomberg’s AIM and Advent’s Moxy most commonly used

Others• Calypso• Fiserv • ITG OMS• Misys• Neovest• Paladyne• RealTick

32% 23%

Note: Some respondents provided multiple answers.

Market Data Vendors90% of respondents using Bloomberg– Thomson Reuters most popular second/alternative– 80% of Thomson Reuters users also have Bloomberg

Others• Capital IQ• Dow Jones• Markit• Morningstar• Zephyr

90%

20%

Note: Some respondents provided multiple answers.

Market AnalyticsOne-third of respondents using multiple tools

73% of respondents using Bloomberg– Of those, 1 in 4 using Bloomberg + another tool

Others• Barra One• Edgar Online• MatLab• Morningstar• TheStreet.com73%

16% 14% 13%

Note: Some respondents provided multiple answers.

Research & Doc ManagementMajority of respondents not using RMS; however adoption is increasing

Top 3: Proprietary, Advent Tamale & Code Red

Others• Autonomy• Factiva• Matlab • Oracle• Preqin• Risk Matrix• Sophis• Thinkfolio

56%

Note: Some respondents provided multiple answers.

Middle & Back Office

Portfolio Accounting

Risk Management

Outsourced Administration

Customer Relationship Management

Message Archiving

Mobile Devices

Portfolio AccountingAdvent Systems hold 37% of market

“None” respondents likely relying on outsourced administration

Others• Everest • Indata• Peachtree• FixQ• SunGard’s

Investran• Tradar

37%

33%

Note: Some respondents provided multiple answers.

Risk ManagementMajority of firms are NOT using a risk management system

Many likely outsourcing risk capabilities to an administrator

Note: Some respondents provided multiple answers.

Others• Barra One• Goldman Sachs• ReThinkIt• Factset• Novus• Trueview• Investor Analytics• Indus Valley• Amoeba

Outsourced AdministrationOne-third of firms using one of Top 4 administrators

Larger firms more likely to use multiple administrators

Others• AIS Fund Admin• Gravity Financial• Northern Trust• BNY Mellon•

Conifer/JonesTrading

• Kaufman Rossin• Fortis• BONY• CACEIS•

In-house/proprietary

• Deutsche Bank • HSBC

Customer Relationship ManagementPerTrac and Salesforce the most commonly used systems

Wide variety in “Other” category

Others• Goldmine• Oracle’s Siebel• Navigator• Sage SalesLogix• Fundrunner• Imagineer• Maximizer• The Next Round

(TNR)• Qube

40%

Mobile Technology SolutionsMajority of firms still rely on BlackBerry

35% of firms using both BlackBerries and iPhones– In 2011 study, only 10% of firms using iPhones

95%

Note: Some respondents provided multiple answers.

95%

Message ArchivingGlobal Relay dominates with 50% of responses

Social media message archiving gaining importance

Cloud AdoptionBased on June 2012 Cloud Adoption Trends Survey

Half of firms are using the cloud for application hosting

Survey: Cloud Adoption Trends Within the Investment Management IndustryPresented by Eze Castle Integration & IDG Research Services, June 2012

Looking Forward

Continued cloud adoption for infrastructure and application hosting

Regulations will play an important role (e.g. Dodd-Frank)

Investors will become even savvier on the technology front– Due diligence process will be critical for firms

seeking allocations

Eze Castle Integration Overview

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Awards Received

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