Data management is a critical component of any hedge fund operations. After all, datasets – from client investors, from the financial market, or from the global economy in general – form the basis of any investment or policy decision for hedge funds.
More specifically, fund managers use data to determine market trends, and predict the potential returns that will come with each particular investment move. They use data to evaluate the investment-worthiness of companies, or the costs that the client investors’ assets can carry. They also use data to conduct risk modelling analyses.
Fortunately, we live in a time when most hedge fund executives already have a deep appreciation of the importance of proper data management. Moreover, so many tools are now available for efficient and cost-effective execution of this function.
Cloud-based platforms, for one, may be a taken-for-granted development, but it adopting this kind of solution represents a huge step for any hedge fund management firm. Through a Cloud-enabled technology, real-time collaboration is now possible online – an affordable, fast, and convenient way to perform data management tasks. Client investors, the fund managers, partners, and other stakeholders can now easily make complex calculations, communicate, and upload, access, and edit files – from wherever they are on the globe.
The best breed of these platforms offer access configurations that promote security and privacy of information, can accommodate the use of multiple languages and currencies, accommodate different report types, are capable of different kinds of data visualization, and allow for easy retrieval of information.
Adopting the latest solutions can admittedly be cost-prohibitive for hedge fund management firms. But today, an option that many managers are adopting is tapping the assistance of asset servicing firms.
The top third party service providers help hedge funds access first-rate technology for data management sans the usual costs involved. Instead, this access becomes part of a bigger package of many functions that they can take on as they perform asset servicing tasks, which include such middle and back office functions as risk management, compliance management, accounting, shareholder reporting, fund payments, and tax reporting.
In addition, these asset servicing firms free their client hedge fund managers from the hassles of choosing the best out of what may be a hundred solutions for their business type, as well as the costs involved in recruiting and training people how to take advantage of these technologies. With their help, the task of data management becomes much more manageable.
