New York-based Liquid Holdings is fast becoming a tour de force in the hedge fund industry. Born in the cloud, the firm offers hedge fund managers (typically USD1bn or less in AuM) a multi-tenant “true cloud” solution. Using cutting edge technology Liquid’s platform brings together low latency OERMS – order, execution and risk – capabilities backed by managed services, giving managers a scalable, cost-effective cloud environment in which to run their operations.
But this concept of “true cloud” does not apply wholesale. Previously, organisations outsourced their IT activity to application service providers (ASPs).
“As an ASP you would have to provide disaster recovery and so on. At the same time, organisations were still responsible for doing their own operational activity. That was hard and expensive to do and never took off in the same way that the ‘cloud’ has today.
“The industry then moved on from ASP to something called ‘hosted services’ –essentially an advanced ASP. Vendors host the IP for clients in a single environment but it still relies upon the manager’s server, back-up server, disaster recovery server, etc. If the vendor has 10 clients then it means they have 10 servers, 10 back-up servers and so on. That’s an expensive model to manage and maintain,” explains Robert O’Boyle (pictured), Liquid’s Executive Vice President and Director of Sales & Marketing.
Although a lot of vendors today market cloud solutions, with the opportunity to offer shared services, the fact is everything runs off individual databases, unlike Liquid Holdings, whose entire architecture was conceived in the cloud. That means each upgrade is applied once across “X” number of clients, similar to your iPhone or iPad.
“A multi-tenant cloud platform, like ours, meets the classic definition of Software-as-a-Service. We have multiple organisations and multiple data structures running on a single monolithic database.
“The market is cognisant of the fact that there’s a tremendous difference between the way in which you develop, service, support and upgrade a single tenant environment versus a multi-tenant environment,” says O’Boyle.
As new products and product enhancements are developed by Liquid Holdings in the true cloud, clients avoid the inevitable software upgrades that come from using single tenant cloud architectures. Whilst perfectly effective, single tenant ‘impostors’ are less flexible, less secure depending on their hosting facility, more costly, and slower at bringing solutions to fruition.
“The single tenant, multi-database solution is fine – it’s been done that way for years. However, given the technology that exists in the marketplace today, it is possible for managers to do this in a faster, better, cheaper, and more secure way. We can do this in a multi-tenant, single database cloud environment. It allows us to provide a highly scalable and robust solution. So if you could get something better, faster, cheaper, why wouldn’t you? If it’s not born in the cloud then clients are only getting some of the benefits but not all of them,” says O’Boyle.
The quantum leap in hedge fund technology espoused by Liquid Holdings, using the true cloud, is making it possible for managers to optimise the way they run their business. With mobile technology developments continuing apace, Liquid Holdings’ clients have the capacity to run their fund(s) anytime, anywhere.
“We’re helping them to manage investments in the most optimal environment and make them, operationally speaking, more credible to end investors as compared to their peers,” concludes O’Boyle.
