The role of technology and digital transformation in fund success

Mark Coriarty, Sentieo

By Mark Coriarty (pictured), Chief Revenue Officer, Sentieo – Sentieo works with hundreds of hedge funds, mutual funds, private equity firms, and Fortune 500 Corporations. Each and every one of these organisations has felt the impact of the global pandemic. They also have something else in common: an accelerated focus on technology.

We've seen a major trend play out in the last year. Organisations that were already set up to enable their teams to work remotely didn't skip a beat at the outset of the stay at home orders last spring. Efficiency and output of the research process are the lifeblood of every fund – large or small – and those with robust technology stacks enabled their high performing, socially distant teams to continue to collaborate effectively.

But what does a robust tech stack look like – surely most funds are leveraging technology for research and communication? The simple answer is that while most have begun the digital transformation, many are still left back in the 90s using static terminals for research, shared drives to store documents, Teams/Slack/Symphony for informal communication and email for formal file transport and notes. The ultimate outcome of the research process is a successful investment decision, but this requires more than siloed research and notes shared over email or worse, saved in personal drives that are often lost when an analyst moves on. Next-generation technology providers must support the complex workflows of hedge funds and provide the auditabilty necessary for compliance. A unified research management platform can help accomplish all of this. 

Analysts are able to build a better thesis by having all the core components (inputs, data, etc) of the research management process in one centralised place with the ability to share and collaborate ideas in real time. Integrated analytics and model building tools can surface new investment opportunities, and seamless sharing of information with colleagues – no matter where they are located – facilitates collaboration to produce stronger ideas and recommendations. A strong research management platform supports this.

For portfolio managers, a unified platform facilitates standardisation of the research process, for example the structure and requirements for a thesis, and visibility into research activities and outputs for continual improvement of analyst workflows and results. Fund leadership gains greater confidence in investment decisions and the protection of intellectual property with a centralised and standardised research process and platform for content management.

While it could be argued that digital transformation had been underway for some time, this global pandemic was a catalyst for change. Having the world shift to fully remote work overnight expedited what was for some a slow process. There is little doubt, however, that those with unified systems that facilitate collaboration have come out on top. By supporting the entire workflow these funds have consistently delivered better outcomes across the board – for analysts, portfolio managers, and fund leadership. It's been a strange and difficult year; however it has also accelerated digital transformation and created lasting changes which have and will continue to improve the way we work for years to come.

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