Despite the boom in third party service provision, hedge funds’ ops infrastructure remains a mix of outsourced, cloud- and in-house processes, as COOs are keen to maintain oversight over key business functions.  The expansion in the range and quality of outsourced business functions and third-party service providers has shaken up the way the hedge fund industry assembles its operational infrastructure. The lockdowns and remote working models brought about by the Covid-19 pandemic accelerated the already-gathering momentum of outsourcing, underpinned by a growing ‘digital-first’ approach built around looser constellations of trading and operations networks with technology and automation at their core.   

Amid sustained economic upheaval and investment volatility, operations specialists discuss the major trends and themes that are reshaping hedge funds’ business infrastructure.  The unprecedented turmoil brought about by the coronavirus pandemic over the past two years heralded far-reaching changes to hedge funds’ infrastructure and business models, with cyber risk, network security and virtual due diligence emerging as a front-and-centre challenge as firms pivoted to remote working. Now, against a backdrop of ongoing regulatory change and sustained market dislocation, managers of all sizes and strategies remain alert to new, emerging and future operational risks, with many acknowledging the key role played

Against a constantly evolving backdrop of advancing technology, heightened regulatory barriers, and increasingly complex business operations, the nature and profile of the hedge fund chief operational officer has transformed over the past decade.   The scope of the hedge fund COO’s remit is expanding, and their day-to-day duties are increasing, which in turn is changing how the role slots into the broader hedge fund business today. Traditionally a predominantly operations-focused individual familiar with the back- and middle-office and handling trades, industry participants say COOs at cutting-edge hedge fund firms are now becoming critical figures within the overall model.   This

As hedge funds’ business functions grow in complexity, more managers are turning to technology in order to execute a growing number of tasks.  New research conducted for this report highlights the extent of automation across hedge funds’ back- and middle-office business operations, with hedge funds across strategy sizes increasingly tapping into technology to handle the core components of a trade, predominantly at the allocation, risk, and reconciliation stages.    Leading the way are those firms managing assets of $1 billion or more, who are adopting automation more extensively than those with AuMs of under $1 billion, Hedgeweek data shows (see