Emerging Hedge Funds Get Test-Drive Facility

Terry Flanagan

Liquid Holdings Group, a cloud-based technology and managed services provider to hedge funds, has launched a “simulator” program that allows emerging hedge fund managers to beta test their fund strategies.

Liquid’s new corporate headquarters in midtown Manhattan hosts a Client Service Center that provides emerging funds with an opportunity to test drive their investment strategies on the Liquid platform. The program was initiated to help fund managers who are registering or launching to simulate portfolio management tasks on Liquid’s institutional-quality order, execution and risk management platform.

“We provide mission-critical software and technology, while also providing back-office functionality to enable emerging hedge funds to attract allocators and investors,” said Robert O’Boyle, executive vice president of sales and solutions management at Liquid Holdings. “Now that we’ve moved into our new office space, we’ve allocated space and hardware to enable us to quickly onboard hedge fund information –positions, transactions, etc.—to enable them to perform hypothetical trades, conduct performance and risk reporting, and determine the levels of investor reporting we want to offer. It’s intended to give them an opportunity to think about how they can leverage technology to demonstrate control and the tools they need to attract investors.”

The three most important decisions a new hedge fund manager needs to make are selecting a prime broker, a fund administrator, and the technology infrastructure and controls to support their fund strategy, which is where Liquid comes into the equation.

“We are offering imagers the ability to upload their portfolios and test the power of the Liquid platform,” said Liquid CEO Brian Storms. “Our solutions specialists can walk them through best practices across trading and risk management, while simulating how their strategy would have performed in a live trading environment as well as over the last six months.”

Managers can test the full power of the Liquid platform including ‘what-if’ position modifications to study the real-time impact trades have on performance, P&L and risk for entire portfolios as well as single instruments. Upon completion of the simulation, managers leave with a two-month trial account available on a tablet or desktop.

Emerging fund managers “already know how to manage a fund, and how to make investment and trading decisions,” O’Boyle said. “What they don’t always know about is how to manage a back office and how to manage the IT. We enable emerging hedge funds to recognize the tool sets which exist in the market today. I don’t know anybody who provides this type of set up, or has configured their organization to support the hedge fund in this way. We will actually run production environments for these emerging managers. We will partner with them to give them the best chance for success.”

Liquid’s technology is delivered through the cloud in a Software-as-a-Service (SaaS) model. The platform was built to manage the entire trade lifecycle by integrating multicurrency, multiasset trade order management and execution with real-time risk, portfolio management, and shadow accounting reporting.

The platform is offered on a subscription basis to hedge fund managers, asset managers, family offices, and financial institutions.

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