This special report, featuring winners from the Hedgeweek European Awards 2020, outlines the shift in hedge fund managers’ understanding of technology, a growing appetite for regulated structures and an increase in due diligence assessments.
The 'European Service Provider Insights 2020' special report comprises 10 separate articles listed below, these can be read individually or as a sequence.
By A Paris – Last year was challenging for hedge fund managers. Although the market registered a dimension of recovery, regulation and fee pressure continued to ramp up while performance did not always to live up to expectations. However, hedge fund managers are resilient and are being pushed to innovate, finding ways to rise above these difficulties. This flexibility is bound to prove vital in the year ahead as the industry braces itself for the expected turbulence.
SS&C Advent: Best Managed Accounts Software Provider – As investment in alternative assets continues to rise, asset managers’ needs for technology, hosting and services are also increasing. The alternative investment arena requires specialist skills, and as the regulatory pressure for transparency and accountability intensifies, asset managers are driven to evidence their value-add while also keeping a lid on cost.
RFA: Best Cyber-Security Service Provider – With the emergence of public cloud services from vendors like AWS and Azure, fund managers may be tempted to take a do-it-yourself approach to technology and cybersecurity systems. However, service providers warn against this tactic as managers may find themselves exposed to risk they would have neither intended nor foreseen.
Eversheds Sutherland: Best Law Firm – The persistent low rate environment has been pushing hedge fund managers to explore more creative options when looking to launch new funds. Increasing regulatory scrutiny is prompting greater urgency on the ESG front, while cyber-security threats, Brexit and other global events continue to influence the hedge fund industry.
Tradeweb: Best Execution Platform – During periods of high volatility or market stress, it’s vital that hedge fund managers continue to benefit from robust access to liquidity through efficient electronic markets. Electronic trading plays a significant role in promoting stability in financial markets, and multi-asset execution venues like Tradeweb, also help to keep them connected.
AlternativeSoft Analytical Investment Solutions: Best Risk Management Software – As the industry witnesses fading differentiations between long-only, private equity and hedge funds, investors are starting to purchase software and databases which combine all these investment types – long only, private equity and hedge funds. In this environment, the combination of quality client service, free training and customisable fact sheets coupled with ease of use and an attractive interface has seen AlternativeSoft go from strength to strength. The quantitative analytics software firm has seen its revenues increase organically by more than 30 per cent in last 2 years and has opened a New York office as testament to its growing success.
Crestbridge: Best Regulatory Advisory & Compliance Firm – The advent of the Alternative Investment Fund Managers Directive (AIFMD) changed the landscape of the financial industry dramatically, ushering in a stronger focus on regulatory compliance and increased governance requirements. In light of these developments, service providers have witnessed a shift from unregulated structures to funds, generally managed by an AIFM to gain access to the European passport. Daniela Klasén-Martin, managing director, Crestbridge, shares her views: “We anticipate that the regulatory trend will continue and that with increased scrutiny from regulators, managers will have to invest in additional resources covering for independent control functions.
Cowen Outsourced Trading: Best Outsourced Trading Solution – As hedge fund managers continue to focus on reducing cost and fostering a greater emphasis on their core competency, the industry is seeing a move as existing funds explore outsourced solutions to either supplement their internal trading operations or at times completely replace them.
Constellation Advisers: Best Outsourced Accounting Firm – The increase in transparency demands within the investment industry has led to an upshot in business for firms offering due diligence assessments. Carrying out this work allows these due diligence practitioners to be at the forefront of evolving industry best practice.
Align: Best Outsourced IT Provider – Technology is playing a key role in the delivery of compliance within the world of hedge funds and managers are becoming more pro-active in understanding how technology can help them meet these challenges.