Hedge funds can't do it alone: How a managed service partner can boost your odds of success
Focus has never been a more important commodity for hedge fund managers, writes Aani Nerlekar, Senior Director, Solutions Management & Solutions Consulting, SS&C Advent…
After a challenging 2022 – the industry witnessed a slowdown in fundraising and investor allocations – managers must prove their worth to remain competitive and profitable in 2023. In the quest to attract and retain investors, true differentiation will come down to investment performance and client service. Getting there will require focus.
Whether portfolio managers and traders directing trading decisions or programmers and investment strategists designing algorithms, investment firms must focus on where they can add the greatest value. As a result, more managers outsource non-core operations and technology management functions to a fund administrator or managed service provider better equipped to deliver the expert support hedge funds require.
Managing technology and operational expectations
A marquee technology infrastructure has become critical to attracting allocations and strengthening managers' success potential. Asset owners want automated efficiency, reliability, and risk control. Better investment decision-making and client reporting hinge on the ability to extract data from the platform quickly and easily. True multi-asset and multicurrency capabilities allow managers to pursue alpha-generating opportunities wherever and whenever they arise and satisfy investor demand for diversification.
Opting for a cloud-delivered, hosted technology environment gives hedge funds on-demand access to the advanced system's functionality they need without continuously investing in in-house IT. Firms can reduce operating costs since they no longer have to deploy and train dedicated technology teams. Incorporating 24/7 systems monitoring and comprehensive backup and disaster recovery protocols provides optimal system availability and performance. Product maintenance and upgrades are proactive and seamless. On-tap platform scalability ensures firms can grow cost-effectively.
Outsourcing low-value and repetitive operational workflows to a managed services provider or fund administration team gives firms access to experts with knowledge of best practices gleaned from multiple, diverse engagements over many years. This is an invaluable resource for managers seeking to broaden their asset mix, expand their distribution footprints, and satisfy client and regulatory expectations. When backed by automated processing capabilities, operations specialists can alleviate hedge funds' back-office burdens, reduce operational risks, optimize productivity and increase scalability.
Avoid relationship complications
With SS&C Advent Geneva®, our portfolio and investor accounting platform, and SS&C GlobeOp, our leading fund administration offering, we can draw on extensive technology, outsourcing infrastructure, and know-how spanning the financial services spectrum. Our systems are our own, with in-house experts delivering the infrastructure, administration and technical support. The teams providing our menu of managed operations likewise have deep domain knowledge and experience, ensuring smooth and efficient downstream processes.
As we manage the infrastructure, software and operations, our services and support teams across all areas are a phone call away. Any questions or issues reach SS&C product experts—the same people who built the systems—for rapid diagnosis and resolution.
Investment firms of all types and sizes have long recognized the benefits of concentrating on those core business strengths where they can deliver the most value. A dedicated pursuit of excellence has become even more critical in today's volatile market environment.
Aani Nerlekar, Senior Director, Solutions Management & Solutions Consulting, SS&C Advent – Aani Nerlekar joined SS&C Advent in 2011 and is based in San Francisco. He brings a wealth of hands-on experience to the team, working closely with prospects and clients in understanding their business needs, as well as functional and technical requirements around the front, middle, and back office. Aani is responsible for solutions management and strategy for the alternatives market and works with product management to define product strategy and roadmap.