A new category of software vendor is moving into the alternative investments space, addressing various aspects of the trade lifecycle of both established and growing hedge funds, according to a research report released by Gravitas Technology, a technology service provider to the alternative investment management industry.
As hedge funds move toward multi-strategy trading and globalization, they are facing the need for more intraday front and middle-office functionality around P&L, positions, cash, pre-trade analytics, compliance, risk and reporting. The trading style at many funds has become similar to that of a global asset manager. As such, these sell-side software vendors are rising to meet the needs currently unmet by traditional hedge fund technology, which in many cases, is equity-focused in a now multi-asset class environment. Firms that lack the capability to handle derivatives, commodities and other products in a straight-through-processing manner are finding themselves exposed to operational risks resulting from inadequate automation and controls. "Sell-side systems present a compelling option for hedge funds that are dealing more and more with instruments that are not addressed fully by their existing systems," said Jayesh Punater, CEO of Gravitas Technology, in the release. "We are now starting to see these traditional sell-side platforms offer solutions that work synergistically with a hedge fund's current infrastructure," he noted.