With so much change happening in the funds industry, it is imperative that technologists keep pace to help hedge funds optimise operations. In that regard, Eze Software has been busy developing new functionality across the Eze Investment Suite, with MiFID II as a big focus.
In Q1, Eze Software partnered with OTAS Analytics to integrate advanced market analytics capabilities into its execution management system (EMS) blotter to support MiFID firms seeking to meet best execution requirements under MiFID II. It also increased access to liquidity sources from the EMS and added BIDS and POSIT crossing networks to its suite of routing destinations. Multiple MiFID-focused upgrades to enable transaction and trade reporting are happening across the suite, including order management and portfolio accounting applications.
David Quinlan (pictured), Executive Managing Director, EMEA, notes: “After gathering assets, the next biggest concern for most managers is how to best deploy technology and systems to optimise their operational alpha and build scalable businesses. Some of those tasks they are looking to automate reside in the investment decision-making process. Some are using AI-based technology to access new sources of public information and filter it to build new insights.”
Ultimately, says Quinlan, the aim is to integrate those systems with tools such as Eze EMS and Eze OMS: “Once the portfolio manager makes a decision on what to buy or sell, we take it from there. We can take that investment idea, run it through our Eze Compliance engine to automate all the pre-trade compliance, manage the trade order to provide the portfolio manager with real-time P&L on the portfolio, before ultimately using that data to do the investor-level accounting tasks,” explains Quinlan.
The idea, he says, is that clients want to make it as much of a “closed loop process” as possible: all the way from initial idea generation to trade execution, accounting and reporting.
One of the more recent examples of strategic partnerships has been with PortfolioScience, whose RiskAPI solution is a leading real-time risk solution. The Eze Compliance engine interacts dynamically with RiskAPI and checks quantitative measures–in this case, risk measures–to ensure risk parameters are considered at the pre-trade compliance stage.
“We have to have the right API tools to communicate dynamically with these different engines and make sure they work properly. We are pushing to make things as seamless as possible, to make it less people-intensive and cost-intensive for the manager; that’s the ultimate goal,” asserts Quinlan.
Quinlan says that the more Eze Software applications clients use, the better able they are to standardise data in terms of how they view it and use it, but concedes that this remains a huge challenge for large asset managers, who tend to use multiple data warehouses.
“When you talk about data management with these entities, it is a challenge because they might have multiple databases using different data formats. That said, I think the concept of a single, giant data warehouse concept is something they will try and stick with. I think they will try to eventually pull all of their multiple systems into one data hub.”
If so, the investment process will likely become more dexterous, allowing firms to optimise their decision-making across strategies, geographies and asset classes.
