Due Diligence Informs Outsourcing Needs

Terry Flanagan

Hedge funds react to regulatory and investor demands.

Increased due diligence and regulation requirements are fueling demand for outsourcing technology in the hedge fund space.

The main driver for outsourcing among fund managers continues to be achieving cost efficiencies in an environment where barriers to entry have dramatically increased over the last few years.

“That’s largely due to increased regulatory requirements and heightened investor scrutiny of the underlying business operations management.

“Particularly in the case of investors, it’s no longer just about the investment strategy,” Michael Madigan, client services director of Chelsea Technologies, told Markets Media.

“Investors are looking under the hood to ensure they are comfortable with how the business is managed, and fund managers must now demonstrate a robust and sophisticated operational infrastructure to support the business,” said Madigan. “That’s certainly raised the benchmark on what types of technologies and IT policies fund managers must adopt in order to receive investor allocations.”

Chelsea Technologies provides IT advisory, design, implementation, hosting and support services to the alternative investment community.

Chelsea Technologies attributes much of its growth in 2011 to increasing regulatory and investor demands on hedge fund managers for greater transparency and accountability.

Some of the fastest growth areas in 2012 are expected to include internal cloud migration assessments, private cloud disaster recovery and data retention delivery, enterprise data center consolidation, and best practice due diligence and security assessments including endpoint, mobility, and perimeter security.

Chelsea Technologies is focused on providing a broad range of technology services for fund managers with a diverse set of technology needs.

“We’re not just a consultancy firm, an IT design firm or a hosting and support firm,” Madigan said. “Because we offer a broad range of services to accommodate a broad range of client needs, we’re able to provide a truly customizable technology service for fund managers, providing an optimal mixture of traditional server on-site technology design and implementation.”

These services are integrated with both internal client and private external cloud offerings.

“Client demand for that type of integrated solution was really what prompted the formation of our hybrid cloud service, which seeks to help clients determine what parts of their business they want to run on an internal cloud and what parts they want to push into an external cloud solution,” said Madigan.  “We’ve seen that many of our clients want to use a mixture of both internal and external cloud technologies to manage their business.”

Related articles

  1. Deutsche Borse-LSE Merger in Focus

    Instinet Fox River Quant Solution will initially be rolled out in the Americas.

  2. Algos, Post-Trade Top FCM Concerns

    Instinet's Anushree Laturkar says investing in research and analysis is key to improving client outcomes.

  3. The new platform launched via a partnership with BestEx Research.

  4. It is the first liquidity-seeking algorithm on Atlas, the equities trading platform introduced in 2019.

  5. Algorithms in Focus

    Strategy Studio allows brokers to create their own execution platforms.