Trevor Chisholm, Director of Alternative Investments at Intralinks has appeared in a new video on Asset TV. The interview discusses how managers can achieve transparency whilst still maintaining control.
This is becoming something of a juggling act for managers as they grapple with the expectations of sharing more details on their portfolios with investors on the one hand, and maintaining sufficient control over how that information is shared on the other. Cybersecurity is a top-line issue for managers on the back of the SEC’s recently issued Initiative Risk Alert highlighting the importance on information and cybersecurity preparedness.
As Chisholm points out, when a hedge fund recently became the focus of a positive story on strong performance, the fact that the information reported could have potentially been inaccurate was a real concern. Managers today cannot allow information to slip through the net, no matter how beneficial it could be.
“There can be a real economic impact to a fund for not taking a proactive position on security and control of their information,” says Chisholm.
This is especially true if people in the public domain are able to discern that a manager is building a large position in a company. If reported on – and let’s face it the Internet means information today is disseminated at lightning speed – this could lead to other managers piling in to the trade, driving up the stock price and eroding the potential upside.
Chisholm notes that the adoption of online repositories for funds to store their information securely is becoming a big trend. This is allowing managers to protect their information, apply passwords and even tools like digital rights management (DRM) to prevent documents from being duplicated. Such measures are helping to tread that fine line between transparency and control.
Chisholm highlights the fact that when managers choose to work with third party vendors for document distribution, they are able to benefit from penetration tests, security audits and certification processes “that most software vendors will have to go through to compete in this space and to offer a solution that will work for the managers. We’re seeing this more and more.”
“We have a dedicated function that is built simply to address those types of questions, share information on our certifications like SOC 2. That’s a best practice for any client that’s looking to a vended solution,” says Chisholm.
To watch the interview in full, please click here