march 2016 the definitive guide to hedge...

IN SYMPHONYSymphony CEO David Gurle outlines his ambition

GRATICULE TO END FORTRESS INFRASTRUCTURE ARRANGEMENTMacro firm to spin out of platform in May

COMPANY PROFILE 20

NEWS 06

SEC WARNS OVER CYBER-ATTACK REPORTINGRegulator fires shot at firms during annual conference

AXIOMA TO ACQUIRE CONCEPTONE REPORTING UNITFirm to take on risk and regulatory offering

V IS IT WWW.HFMTECHNOLOGY.COM FOR MORE TECHNOLOGY UPDATES

THE DEF IN IT IVE GUIDE TO HEDGE FUND TECHNOLOGY

ISSUE 27 MARCH 2016

NEWS 08

WHAT CONCENTRATION RISKS DO CTOS FACE, AND HOW SHOULD THEY RESPOND?

NEWS 05

MARCH 2016 hfmtechnology.com 3

CONTENTS

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TOO MUCH CONCENTRATIONAlex Cardno

Concentration risk appears to have taken a back seat to cyber-security in the hedge fund technology priority list but that doesn’t mean it is any less of a threat to fi rms.

Indeed, CTOs who spoke to HFMTechnology this month were all too aware of the risks that exist around too many IT services being placed in the hands of too few service providers.

Regulators on both sides of the pond have had little to say on the issue thus far, with the FCA devoting one line to it in its recent cloud computing consultation. But with full guidance expected from the UK regulator later this year, don’t be surprised to see scrutiny of the issue intensify.

This month, HFMTechnology takes a look at some of the key concentration risks facing CTOs and asks what can be done to mitigate against this (see p10-13).

We also profi le Symphony’s CEO David Gurle to fi nd out more on his plans for creating a secure, instant messaging framework which he hopes will become the standard bearer for communication across fi nancial services within three to fi ve years. (see p20-21).

We encountered a man less concerned with the label of ‘Bloomberg killer’ ascribed to his fi rm since it launched last year, and more concerned with cornering the buy-side having already established a broad stable of sell-side fi rms as both investors in and clients of his fi rm.

Elsewhere, Coller Capital’s head of IT service delivery Ian Flavill gives his take on hybrid IT solutions (see p14) and Mark Ridgway, partner at Allen & Overy, articulates the key points of the forthcoming EU trade secrets directive (p24), something CTOs and COOs will both need to be aware of.

We also feature a winners’ supplement on p16-19 showcasing all of the winners from last month’s HFMTechnology US Awards event in New York City.

Enjoy the issue.

THIS MONTH’S MUST-READS

COMPANY PROFILESymphony sidesteps ‘Bloomberg killer’ label

p20

SECRET CTOAn anonymous CTO discusses

dual data back-ups p15

CONCENTRATION RISKThe risks facing CTOs and how

they should respondp10

4 hfmtechnology.com MARCH 2016

The FCA expects to issue final guidance

for UK-regulated firms on outsourcing

IT to the cloud in either April or May this

year, HFMTechnology has learned.

An FCA spokesperson said the regulator

was still going through responses to its

consultation, which closed on 12 February,

before it releases full guidance later this

year.

While an exact publication date for the

full guidance has not yet been finalised, the

FCA’s spokesperson told HFMTechnology

the regulator expected to release its

conclusions around April/May.

The FCA began its consultation in

November last year on providing guidance

to regulated firms around outsourcing to

the cloud and other third-party IT services.

While many of the proposals in the

consultation were welcomed, hedge fund

trade body Aima responded with a warning

on certain proposals contained in it.

Chief among these was a warning about

the FCA’s proposition that firms should

identify current industry good practice on

risk management, which Aima said could

result in a “chilling effect on the amount

and type of guidance that it is possible

for Aima and other industry bodies to

produce”.

Aima said this could effectively “elevate”

documents, such as its own guide to sound

practices for cyber-security, to obligatory

requirements.

Concerns were also raised about the

practicalities of aspects of the proposed

guidance.

Aima said it agreed with the FCA’s

suggestions on monitoring concentration

risk but said it will be problematic to

implement for large service providers

with many clients, and smaller firms with

confidential client lists (see feature, p10).

Similarly, Aima said verifying suitable

arrangements for dispute resolution were

in place was useful, but negotiating a

contractual clause with a provider was not

realistic.

Requiring physical access to data storage

could also make it difficult for firms to

use public cloud services, thereby making

the FCA’s suggested requirement to ensure

access to business premises problematic.

Aima therefore suggested the FCA

provide clarification that visiting the office

of the cloud service provider would be

sufficient.

Provisions for an “exit plan” suggested by

the FCA were also seen as problematic by

Aima, as it would be “extremely difficult”

to enforce compliance to these obligations

on a service provider.

Hudson Structured Capital Management

(HSCM) has taken on former IT consultant

and ex-UBS IT executive David Jackson as

CTO as its new management team looks to

raise assets for its fi rst fund.

Jackson joined the Connecticut-based

structured credit fi rm in February, nine

months aft er the fi rm was founded by

managing partners Michael Millette and

David Andrews, according to information

obtained by HFMTechnology’s sister title Alt

Credit Intelligence.

Before joining HSCM, Jackson spent eight

years as the owner of Microsoft Gold certifi ed

consultancy Anchor Solutions, following a

seven-year stint as head of IT application

management USA at UBS Investment Bank,

according to his Linkedin profi le.

His hire is one of several key hires made at

HSCM, which will focus on re/insurance and

transportation assets operating a dual-strategy

focused on structured opportunities across the

insurance and reinsurance spectrum as well as

equipment fi nancing across the transportation

sector with a specifi c focus on aviation.

Hudson Structured opened its offi ces in

Stamford, CT in January and fi led an ADV

with the SEC on 29 February.

REGULATION

FCA IT guidance expected this Spring

PEOPLE MOVES

Hudson Structured appoints CTO as it preps first fund

“BUSINESSES DO NOT WANT IT SERVICE PEOPLE BEING

DRACONIAN OR BEING THE ARBITERS OF RESTRICTION”

IAN FLAVILL, HEAD OF IT SERVICE

DELIVERY, COLLER CAPITALSEE P14


The SEC has warned that the hedge funds will

face much tougher enforcement penalties if

they fail to report cyber breaches.

Speaking at the SEC Speaks annual confer-

ence in Washington, deputy director of the SEC

division of enforcement Stephanie Avakian said

the SEC was aware some registered firms were

failing to report cyber breaches. The regulator

produced no data to back this up but said it has

heard anecdotally that companies are reluctant

to report breaches in case they face an investi-

gation over their own systems and controls.

Avakian said registered firms fear they could

be hit with enforcement action as well as being

a victim of a cyber-attack. She moved to quell

fears by insisting the SEC has a high bar for

when it would take enforcement action but

warned firms they will face harsher penalties if

they do not self-report.

“There is a spectrum of cyber attentiveness

and some firms effectively have nothing so it

is something we have to look at,” said Avakian.

“But we are not looking to second guess good

faith decisions. What if we do think an enforce-

ment action is appropriate? As with any case,

we will assess the company’s co-operation with

law enforcement in determining the appropri-

ate outcome. The manner of co-operation has

long been set out.

“Whether a company self-reported to law

enforcement is a significant factor. We will give

credit to companies that self-report. While

companies might be reluctant to report a cyber

incident because of the potential for investiga-

tion, it would be a significant disclosure failure

where no action is taken. We are keenly aware

of challenges companies face on cyber-security

and our approach appreciates these challenges.”

The office of compliance, inspections and

examinations (OCIE) said cyber-security

would be one its key exam focuses for 2016.

In September, the SEC’s latest cyber-security

risk alert outlined six areas of focus ahead

of the regulator’s next set of inspections. The

OCIE guidance, following its initial risk alert

published in April 2014, centres on governance,

training, vendor management, access, data loss

prevention and incident response.

REGULATION

SEC warns over cyber-attack reporting

QFR Capital Management (QFR) has

moved into a hedge fund hotel after assets

tumbled to $103.5m amid a turbulent

period for global macro traders.

New York-based QFR, which managed

around $3.5bn in 2013 according to reports

at the time, now operates from office space

provided by IT firm Eze Castle Integration.

The discretionary macro firm has also

seen several recent staff departures, but a

source close to the situation insisted the

firm is not closing.

Director of technology Glenn Souther

left around the end of January following

QRF’s move from its Bryant Park location

to 529 Fifth Avenue.

Operations associate Sohel Hussain and

portfolio manager Pablo Duran Steinman

also left the firm that month.

Nancy Kelly, the firm’s CCO, departed

last year leaving general counsel David

Lestz to assume her responsibilities from

October, according to the firm’s ADV

filing.

Steinman has since joined Element

Capital Management, his LinkedIn profile

showed.

Hedge fund hotels typically provide

emerging managers with office space

at lower rates, often combined with

technology, infrastructure and operational

support.

QFR would not comment on the

restructuring of its operations or reasons

behind its AuM decline.

The firm’s 13F filings from 2015

revealed it had significant exposure to

Argentina, with the firm taking positions

in companies such as Buenos Aires-based

private bank Grupo Financiero Galicia,

agricultural firm Adecoagro and energy

firm Pampa Energia.

In its ADV brochure, the firm said it

invests in a range of liquid and illiquid

instruments, including sovereign bonds,

credit default swaps, interest rate swaps,

local fixed income instruments, options,

futures, and distressed debt.

INFRASTRUCTURE

QFR moves to hedge fund hotel

PEOPLE MOVES

MayStreet appoints ex-Citadel executive Capital markets technology firm MayStreet

has appointed ex-Citadel sales executive David

Streltsoff as head of business development.

Streltsoff joined the New York-based firm

in January as head of business development

and a member of the management team after

a brief stint at electronic trade consulting

firm VIA Capital Group and nearly three

years in sales for Ken Griffin’s Citadel, a

Chicago-based $25bn AuM hedge fund.

He will be responsible for growing the

firm’s market data, order entry and trade

analytics software at Maystreet, which was

founded in 2012 by Patrick Flannery and

Michael Lehr.

At Citadel, Streltsoff was responsible for

selling and marketing the firm’s agency

algorithmic trading tools, and for growing

the electronic trading unit. Prior to Citadel,

he was a director in Knight Capital’s

KnightDirect unit, part of KCG Holdings in

Jersey City, responsible for firm-wide sales

and marketing of algorithmic trading tools.

His hire comes amid an attempt by the

firm to expand its presence in the asset

management space, particularly targeting

firms such as quants which use algorithms

to trade.

“David is a proven, revenue-growth

engineer and business leader with over 12

years of success driving record-breaking

sales and organizational performance,” said

Flannery.

“For 2016, we’re now actively expanding

the scope of our business with banks, asset

managers and exchanges.”

Maystreet’s product offering includes

research, latency monitoring and compliance

software and market data recording for the

US equity, options and futures markets.


NEWPRODUCTS

Graticule Asset Management Asia (Gama)

will cease using Fortress Investment

Management’s affi liated manager platform,

marking the exit of the platform’s only

current external manager.

Adam Levinson’s $4.5bn fi rm, which

was formerly Fortress’s Asia Marco Funds

Unit before spinning out last year, will

stop using the Fortress platform from

May, according to the $70.5bn New York-

headquartered fi rm’s annual results.

Th e Fortress platform provides

infrastructure services including

technology and back offi ce support.

Gama’s move follows the closure of

Fortress’s global macro division last year,

and the winding down of its externally

invested Partners Funds arm.

Fortress’s affi liated manager platform will

continue providing infrastructure to inter-

nal funds managed by Fortress, including

its Centaurus Global Event fund and the

Fortress Convex Asia funds, but will not be

servicing any external managers.

Th e platform will remain open to the

possibility of adding external managers

but its expansion has become a lower

priority in the wake of its decision to shut

its $2.5bn range of macro funds.

Th e affi liated manager platform was

launched by Fortress in 2014 to allow the

fi rm to take economic interests in start-

up and established funds and provide a

fee-for-services structure off ering external

funds access to technology, infrastructure

and client relationships. However, it has

been slow to attract external managers

looking to outsource such functions.

Fortress will continue to hold a 30%

economic stake in Gama until the end

of 2016, at which time the stake will be

diluted slightly to around 27% from 2017

onwards, according to a source familiar

with the situation.

It is unclear what infrastructure

arrangements Gama – which declined to

comment – has put in place beyond May

this year.

Frost Consulting has launched a soft ware

platform aimed at assisting asset managers

with research budgets in the wake of

transparency proposals laid out in the

forthcoming Mifi d II regulation.

Th e fi rm’s FrostRB platform is intended

to allow asset managers to establish

monetary values for specifi c unpriced

research products, and construct

monetary research budgets that meet

Mifi d II research spending requirements.

It also provides fi rms including hedge

funds with a research valuation, budgeting

and reporting framework that generates

customised, multi-asset class research

budgets at fund level, and directly aligns

research budgets and individual fund

investment processes.

Its launch comes in response to Mifi d

II research spending proposals, which re-

quire signifi cantly increased transparency

from asset managers over how research

budgets are allocated.

Frost Consulting said its product ad-

dressed the issue of “broker vote” systems,

which it said caused research budgets to

be mis-aligned with investment strategies,

resulting in fund cross-subsidisation and

overpayment for research that managers

intend to use.

In response, its solution off ers a com-

plete multi-asset class solution that har-

monises research budgets between equity

and fi xed income portfolios for multi-asset

products, thereby eliminating cross-asset

class research subsidization.

According to research cited by Frost

Consulting, asset managers spend ap-

proximately $20bn a year of client money

in commissions on external research.

INFRASTRUCTURE

Graticule to end Fortress infrastructure arrangement in May

REGULATION

Mifi d II budget platform launched

eSentire www.esentire.com

eSentire, which provides IT threat protec-tion and managed security services, has launched the eSentire DNS Firewall, a cloud-based providing cyber protection for any device on its network. The product is

powered by eSentire’s Active Threat Protection service, while the DNS Firewall leverages data from Cymon, a global open threat intelligence aggregator, to feed its whitelists and blacklists.

Hexis Cyber Solutionswww.hexiscyber.com

Hexis Cyber Solutions has enhanced its HawkEye G integrated detection and automated response capabilities. Its HawkEye G Release 4 offering will include native, network sandboxing

capabilities powered by malware analysis platform Lastline, an integration that will add multi-protocol content extraction and network sandbox malware analysis to the HawkEye G product line without requiring additional appliances.

Digiterrewww.digiterre.com

Digiterre has integrated its Communica Compliance Engine software with Micro-soft Dynamics CRM. The integration will allow fi nancial services organisations using Microsoft Dynamics CRM to keep

a centralised audit trail of all compliance processes as well as supporting documentation linked to the correct client or investor records in the CRM system.

Virtus Partnerswww.virtusllc.com/

Credit-focused administrator Virtus Partners has gone live with Misys FusionBanking Loan IQ as its full-service agency administration and bank port-folio loan administration platform. The

installation was completed in approximately three months and will allow Virtus to expand its agency administration services to include document tracking, compliance moni-toring, loan making, syndication and distribution.


SEC Office of Compliance Inspections and

Examinations (OCIE) director Marc Wyatt

has looked to reassure managers that it is

not a “gotcha” regulator. Speaking at the SEC

Speaks annual conference in Washington last

month, Wyatt said the OCIE is transparent

about its exam priorities and is not looking

to spring surprises.

Wyatt, who become permanent OCIE

director in November 2015, said his division

is not enforcement and is not looking to

take action against firms. “We are not trying

to be a gotcha regulator,” he said. “This is

the third year in a row we have published

our priorities so we have told you what we

are going to be focused on in the coming

years. We also issue countless risk alerts

such as cyber-security.

“We told you what we are going to look at,

we did our examinations then reported what

we saw. Even if you weren’t part of the exams

then you got the data gleaned from them.”

Before Christmas, the OCIE launched a

rapid-fire sweep of high-yield mutual funds

in the wake of Third Avenue Management

closing its fund and suspending

redemptions. Managers reported having to

send information to the SEC within hours

of receiving requests for information.

Last month, the SEC said it would focus

on liquidity controls, cyber-security and

compliance systems and controls in its 2016

exams. In November, the SEC published

a risk alert raising concerns about the

role of outsourced CCOs and the level of

compliance monitoring. The SEC is also

planning to introduce mandatory third-

party compliance reviews for registered

investment advisers in addition to OCIE.

Speaking in Washington, Diane Blizzard,

associate director for Regulatory Policy

and Investment Adviser Regulation in the

Division of Investment Management, laid

out the regulator’s outstanding concerns.

She said they want to ensure the reviews

were not too expensive, conducted to high

standards and without conflicts of interest.

Last year Wyatt told managers he was not

looking to take “CCO scalps” after a number

of enforcement actions against COOs.

REGULATION

OCIE: SEC not a ‘gotcha’ regulator

Portfolio analytics firm Inalytics has signalled

its expansion intent by opening a New York of-

fice and hiring ex-Twin Capital executive Sarah

Colvin to oversee the firm’s US sales effort.

Colvin joined Inalytics in February as

managing director for the Americas, following

a stint at David Simon’s Twin Capital Man-

agement where she spent just over a year as

vice-president. She was previously director of

marketing at KG Funds Management.

Inalytics has also hired Jennifer Youde, a

former managing director at Goldman Sachs

Asset Management, as a strategic consultant to

the research and coding team.

Colvin said: “Inalytics’ service and expertise

have been proven in the UK, European and

Asian markets with the most sophisticated tier

of plan sponsors and asset managers.

“I am excited to be leading the expansion in

the US market where the service will deliver

significant value to asset owners and managers.

Fintech is offering real innovation and choice in

the way data is used to improve decision mak-

ing – Inalytics is at the forefront of this.”

The firm’s software allows asset owners to

analyse the success of individual managers’

investment decisions and verify if a manager

invests in an investor’s preferred style.

Inalytics offers analysis across asset classes,

including equities, fixed income and credit. Its

database analyses more than 100 million invest-

ment decisions on behalf of 45 clients.

BLOCKCHAIN

PwC appoints ex-hedge fund manager to explore blockchainPwC has appointed ex-Copenhagen Capital

founder Patrick Spens to explore the potential

of blockchain, distributed ledger technology

and encryption. Spens will help the firm

consider the future implications and possible

applications for blockchain technology both in

financial services and other industries.

His appointment builds on a renewed focus

on blockchain technology at PwC, which

hired 15 blockchain experts in January in a

bid to grow the firm’s FinTech offering.

It also reflects a growing interest in

blockchain technology among financial

services firms, with experts quoted in recent

analysis but HFMTechnology’s sister title ACI

arguing that blockchain will reduce the time

needed to move capital and improve the

security between investors and counterparties.

Spens joins from UK regulator the FCA,

where he is head of market monitoring and

has overseen the regulator’s market abuse

agenda since 2009. Before joining, he had

a six-year stint as EMEA head of cash and

alternative equity trading at Citi, before

launching Copenhagen Capital in 2005 and

running the firm for four years.

Michael Rendell, PwC’s transformation and

innovation leader, said: “We anticipate growing

demand from right across our client base for

help understanding the implications and po-

tential applications of blockchain, and Patrick is

one of the UK’s leading blockchain experts.

“While still in its infancy, we see the poten-

tial for blockchain to disrupt and revolutionise

the way organisations do things and want

to be at the forefront of understanding the

impact and applying this technology.”

Spens’ credentials for the new role include

membership of the Whitechapel Think Tank

steering group, where he is credited with

playing a role in a cross-industry and public

sector forum convened to understand the

opportunities and challenges presented by

distributed ledger technology, or blockchain.

Blockchain technology consists of ‘blocks’

of data in a digital ledger, and is believed to be

highly resistant to malicious tampering and,

therefore, potentially lend itself to widespread

uses. In efforts to promote greater transpar-

ency, the ledger also creates a single shared

view of the blocks, which every participant in

the network can access simultaneously.

SOFTWARE

Inalytics opens NY office and makes US sales hire


Risk management software firm Axioma

has agreed to buy the regulatory reporting

and risk reporting units of New York-based

investment technology firm ConceptOne.

The deal will see ConceptOne’s regulatory

compliance solutions transferred to

Axioma’s risk offering while ConceptOne’s

Fund Services unit, which provides data

warehousing, is not part of the acquisition

and will continue to operate as an

independent entity.

“This acquisition will enable Axioma

to offer asset managers and hedge funds a

global regulatory compliance solution that is

part of a fully integrated enterprise-wide risk

solution,” said Dr. Sebastian Ceria, Axioma’s

CEO. “The industry wants automated,

sophisticated solutions for managing its

disclosure requirements. At the same time,

regulatory reporting demands are increasing

and becoming more frequent. With Axioma’s

core strengths, we can quickly scale and

fortify ConceptOne’s existing capabilities to

support those regulatory demands.”

Ken Grant, chairman and co-founder of

ConceptOne, will move to Axioma as part of

the move while Anthony Gallo will remain

in post as managing director of ConceptOne

Fund Services.

The two entities are expected to continue

to work closely together following the

acquisition.

The ConceptOne solutions will continue

to be offered under the ConceptOne brand,

in addition to being integrated into Axioma

solutions.

Gallo said, “We look forward to

continuing to work closely with the units

to be acquired by Axioma and are fully

committed to maintaining best-in-class

service levels for our fund service clients.”

Macquarie Capital served as financial

advisor and Royer Cooper Cohen

Braunfeld LLC as legal counsel to

ConceptOne. Bryan Cave LLP served as

legal counsel to Axioma.

New York-based Axioma provides risk

management services to asset managers,

institutional investors and hedge funds

including risk exposure analytics, portfolio

stress-testing tools and pre-trade scenarios.

The firm was founded by CEO Sebastian

Ceria in 1998 and has 12 offices across the

USA, Europe, Asia and Australia.

ConceptOne is part-owned by

shareholders which also have stakes in

Concept Capital, a mini prime broker

acquired by Cowen Group last year.

ACQUISITIONS

Axioma to acquire risk/regulatory reporting unit of ConceptOne

ACA Compliance Group has acquired Decryptex Financial Laboratories. Founded in 2014 by ex-Moore Capital executive Daniel Cashion, New York-based Decryptex uses algorithmic search technology for capital markets trade analysis and surveillance to allow firms to efficiently and proactively identify anomalous trading activity within their organizations. Today, it is used by large investment managers, broker-dealers, and private fund managers to empirically surveil trade and market data for suspicious patterns, insider trading,

rogue trading, manipulation, fairness, and other issues in order to protect their firms from reputational, regulatory, and financial risks.

Administrator Custom House Global Fund Services has appointed JP Morgan private equity and real estate services office lead Sebastien Sacre as managing director of its US headquarters in Chicago.The firm has also recruited JP Morgan Fund Services global product head John Lumley to lead sales for the Americas, based in its New York office.At JPM, Sacre managed fund administration for the private

equity funds of several internal and external clients. Prior to JPM, Lumley was a director of operations with GlobeOp Financial Services from 2002 to 2007 and an executive director with Deutsche Bank between 1999 and 2002.

Capital Support has been presented with the Cyber Essentials Plus certificate, a badge presented to organisations demonstrating a high level of dedication towards maintaining a high standard of cyber-security.

The Cyber Essentials Plus certificate is a government-backed scheme, first brought

in as part of the UK National Cyber-Security Strategy to combat cyber-crime, particularly in the business environment. The overall aim of the scheme is to instill a basic standard organisations can follow to decrease their vulnerability to cyber-crime. The ‘Plus’ variation of the certificate involves a more detailed assessment of the company taking place to ensure that they meet the stricter requirements.

For more information on these news stories go to hfmtechnology.com

NEWS IN BRIEF

Former Opus Fund Services president Ste-

phen Giannone has launched a new hedge

fund administration business with two ex-

Opus colleagues.

Theorem Fund Services opened its Chicago

head office this month alongside additional

offices in Oregon and New York. It is hoping

to hit $1bn in AuA by the year-end on the

back of deals it has already secured with an

undisclosed number of managers.

Giannone co-founded Theorem with former

Opus head of fund accounting Mikhail Da-

vidyan. Ex-Opus senior vice president Melissa

Bockwinkel is also part of the Theorem team.

The firm‘s offering, which targets emerging

managers, covers reporting, investor relations

and anti-money laundering. It also provides

know-your-client (KYC) functions as well as

banking services, company accounting and

fund management tax solutions.

Sister title HFMWeek revealed in November

that Giannone, Davidyan and Bockwinkel had

left Opus when the administrator restruc-

tured its business while a number of senior

staff departed.

“We have taken all the hard-learned lessons

from our past experiences in the fund admin-

istration market and applied them to this new,

multi-service offering,” said Giannone.

PEOPLE MOVES

Ex-Opus president starts new admin


What is the biggest technology challenge facing hedge funds today?Two things: security and the wholesale technological changes that cascade from moving computation to the cloud.

For the former, the volume and sophistication of threats is growing alongside client and regulator expectations of strong defense, detection, and remediation on the part of managers.

For the latter, I believe the ever-cheaper variable-cost model and rapid scaling offered by cloud vendors will capture an increasing share of our computing needs, but they will also prompt reconsideration of how we architect and deploy our applications.

It gives us the opportunity to revisit the last few decades of our architecture and development practices and start to align them with evolving styles being driven by the tech industry.

What will be the next big trend in hedge fund technology?Technology that does not materially dif ferentiate the investment process will be outsourced, and we will own many fewer computers in years to come – they ’ll largely be rented from one of a few large cloud vendors.

What is the most critical piece of software at your firm?It ’s a tie between our investment analysis platform, our trading/trade processing systems, and our data stores. We need all three running excellently.

Is there a growing technology concern emerging from employees?Our concerns are driven by the increasing scale of our operations and stringency of performance demands, and by the ongoing shif ts in infrastructure towards the cloud. We need to continually improve the quality of our development practices, learn new ways of architecting software, and focus on accuracy and reliability.

What is the most expensive technology outlay for the firm?People. We work hard to find great people, and we work even harder to give them opportunities, help them grow, and make our firm a compelling place at which to work .

TECH TALKRoss Levinsky, Chief Technology Offi cer at HBK Capital Management

Equinix is to invest more than $4.5bn in

acquisitions and expansion with the immi-

nent opening of three new data centres.

Th e California-based data centre

provider opened a new International

Business Exchange data centre in Tokyo

yesterday, and will open similar new sites

in Dallas, São Paulo and Sydney in the

coming weeks, taking the total number of

data centres it owns to 149 in 40 countries

across the globe.

Equinix, which caters to hedge funds at

its data centre sites in London, New York

and Chicago, said the new openings would

add more than 4,000 new cabinets of

capacity and nearly 200,000 square feet of

new data centre space to its platform.

Of the $4.5bn of new investment

planned this year, $3.8bn was spent on the

acquisition of TelecityGroup in January, a

move which added 40 data centres and 3m

square feet of colocation space to the fi rm’s

stable and doubled its capacity in Europe.

Steve Smith, president and CEO of

Equinix, said: “Global businesses are in-

creasingly realizing that interconnection is

essential to deliver a rich, ubiquitous user

experience, with the agility and actionable

insight to enable new business models

and enhanced productivity. Th is will be

even more apparent as businesses locate

their data closer to the edge to support the

‘Internet of Th ings’.”

Th is year’s planned expansion follows on

from the addition of fi ve new data centres

opened by Equinix in New York, London,

Singapore, Melbourne and Toronto in

2015. In addition to its acquisition of Tel-

ecity Group, Equinix also acquired Bit-isle

in Japan for $275m in November 2015.

CYBER-SECURITY

Equinix expands data centre offering

Eze Castle Integration has promoted

Steve Schoener to the role of CTO,

replacing William Tan who has become

the fi rm’s chief security offi cer and CCO.

Schoener, a fi ve-year veteran of Eze

Castle Integration, steps up to the role

from his previous position of senior vice

president for client technology.

He joined the IT and cloud solutions

fi rm in 2011 following two years spent as

head of IT at DW Investment Manage-

ment, a credit hedge fund now known

as DW Partners, which was formerly a

sub-adviser to Brevan Howard.

Schoener replaces Tan, who joined Eze

Castle Consulting as a service manager in

1997 before becoming CTO and manag-

ing director at Eze Castle Integration in

2000, according to his Linkedin profi le.

In his new role, Tan will focus on

ensuring the security and privacy of

the company’s infrastructure and its

customers’ sensitive data. Eze said in a

statement that joining the roles of CSO

and CCO would improve the delivery of

its services.

John Cahaly, CEO of Eze Castle

Integration, said: “Steve and Bill’s keen

understanding of our clients and their

environments will be critical in propel-

ling the company’s next phase of growth

and enhancing user experience. As sea-

soned leaders with distinguished track

records of success, I am confi dent they

will thrive in their elevated roles.”

Eze Castle Integration provides IT

solutions and private cloud services to

more than 650 alternative investment

fi rms worldwide, including more than

100 fi rms with $1bn or more in AuM.

Th e company’s products and services

include cloud services, cyber-security

services, technology consulting and

outsourced IT Support.

PEOPLE MOVES

Eze Castle Integration makes CTO change


COVER STORY

INCREASED IT OUTSOURCING AMONG HEDGE FUNDS IS EXPOSING FIRMS TO MORE CONCENTRATION RISK, HOW SHOULD CTOS RESPOND?

BY ALEX CARDNO

All businesses face some form of concen-tration risk but for hedge funds there is a plethora of different concentrations on the technology side posing potentially significant risks. The issue is intensified by a prevailing trend of hedge funds –

traditionally quite lean organisations – outsourcing some, if not all of their IT functions, making them reliant on the security and efficiency of third-party providers.

And, as pressure mounts on IT budgets, the hedge fund faces concentration risk whether it goes with a single out-sourced IT provider or a selection of different providers for different services. “I think it’s maybe a bit more of an issue than people think it is,” admits the CTO of a $5bn hedge fund.

“In recent years there has been a bigger move towards outsourcing technology in the industry, so for example there are certain data centre firms getting more business,


not just from hedge funds. But in certain areas there is a tendency to cluster a litt le, so it’s defi nitely something to think about.”

Concentration risks arise when outsourced services or products are provided by a limited number of service pro-viders or are concentrated in limited geographic locations, according to a defi nition released by the US Department of Justice. For hedge funds of all sizes, there is simply no way of avoiding the need to place some part of the tech-nology function in the hands of a third party, whether that is part of an outsourced IT agreement or an obligatory ar-rangement with a service provider, such as an administra-tor or prime broker.

Vendor scrutinyAgainst this backdrop, Ray Bricknell, managing director of Behind Every Cloud, says vendor liquidation is the num-ber one aspect of concentration risk people don’t think about enough, whether they use a single end-to-end pro-vider or opt to outsource to multiple vendors.

Bricknell explains that ‘one stop shop’ vendors who de-scribe themselves as being 100% aligned with hedge funds tend to be relatively small fi rms, meaning their revenues are oft en pegged to serving a small number of clients. “Th e way these fi rms operate tends to be that they suck in the IT of the client in a reasonably non-standardised way, then scale headcount to deal with the issues involved with that and end up with a diffi cult to scale commercial model, which means they are a constant aggregation risk (to the hedge fund),” he explains.

For smaller funds, Bricknell adds, this is a particular problem because they tend to buy from an end-to-end provider, which means they are limited for choice.

Hedge funds with bigger budgets can lessen this risk by outsourcing diff erent things to diff erent vendors, but Brick-nell says there is still concentration risk here. “So you might get a vendor who just does disaster recovery as a service, which means you end up splitt ing service acquisition across a range of vendors; you still have a concentration risk with just one vendor doing one thing for you,” he adds.

For managers of any size, the use of niche services also presents a key concentration risk. “Th ere are a lot of simi-lar applications that diff erent funds use like logging emails or email review, or fi rewalls,” says the CTO of one $800m AuM US-based fund.

“Th ere are just a handful of fi rms who do fi rewall securi-ty well for our industry, so a breach on their systems would be devastating. Security providers are a tremendous con-centration risk because there are not many handling lead-ing edge security very well and you can’t go to just any fi rewall vendor.

“Bloomberg is another risk, because not many people have a back-up provider for that service. We have alter-nate data feeds but don’t have the instant messaging that Bloomberg off ers.”

For many hedge funds, the recent spate of mergers and

acquisitions among vendors exacerbates the challenge of handling concentration risk. Deals such as SS&C’s acqui-sitions of Citi’s admin book and Advent Soft ware, or Equi-nix’s $3.6bn acquisition of rival TelecityGroup in 2015, has arguably heightened the threat of concentration risk among vendors because it reduces the choices managers have around providers.

Attempts to diversifySamer Ojjeh, principal and US head of advisory services for alternatives at EY, contends that managers are re-sponding to this by att empting to diversify their systems and by trying to forge closer partnerships with vendors.

He says: “Managers want to have their own view of the risk in their portfolio so that’s why they try to diversify their systems from counterparties including fund admin-istrators and custodians because there is usually a lot of overlap in the systems used by hedge funds and their ser-

vice providers.” Ojjeh also argues that as a result of consolidation, more service providers are exploring the potential of building their own soft ware, prompting more managers to try to partner with vendors off ering less mature products, and helping these vendors mature their products so that the manager can have more control over their concentration risk.

He says: “Managers are looking to manage the risk of not having enough

infl uence over the vendors when they enhance or update their products. Th e risk is of managers being a smaller fi sh in a big pond instead of being a big client, and that is the risk managers are trying to avoid having.”

Th is may be a realistic aspiration for managers when dealing with smaller, more niche vendors, but the issue is not as clear cut for key vendors such as administrators, custodians and prime brokers, all of which are obligatory relationships for a hedge fund to have, and all of which will have some insight, ownership or control of certain el-ements of a fund’s data.

“Th ere is concentration risk at the administrators and prime brokers but there is no good strategy for it,” says the CTO of the $800m US fund.

“It’s like having all the eggs in one basket in your value chain, if one thing breaks you are in a bad state, and the industry is naturally going in that direction because fewer people want to be in that admin/PB space.”

Ojjeh says the larger, more mature hedge funds have this issue on their radar and are starting to ask deeper questions of their key service providers on the technology side in response. “Mature hedge funds have been asking more detailed questions about cyber-att ack preparedness and penetration testing, disaster recovery, data retention and archiving,” he explains.

“Some managers are even asking about social engineer-

There are just a handful of firms who do firewall security well for our industry, so a breach on their systems would be devastatingCTO of $800m fund


COVER STORY

ing protection and how data is being protected by their admin or PB from that perspective, because their trading strategy is their holy grail.”

Data centres are another area of serious potential con-centration risk hazard due to their nature of being clus-tered near trading exchanges. There is good reason for this: hedge funds want low latency and the only way to ensure that is to use a data centre near an exchange. For example in the US, many hedge funds will use data cen-tres in New Jersey or Connecticut. In the UK meanwhile, Canary Wharf and Slough are the locations for large data centres used by hedge funds operated by the likes of Equi-nix and Virtus Data Centres. “Slough has been the num-ber one choice for proximity or low latency solutions for a long time,” explains Bricknell, citing its close proximity to London but also its location outside a flood plain, in contrast to low-lying Canary Wharf.

But Bricknell says that even the advantage of being closely located and outside a flood plain can present prob-lems. “At one stage in Slough, it got to the point where it was almost impossible to find capacity in the data centre because of the ultra-low latency the managers wanted,” he says.

“As a result it became very expensive. By definition, those hubs have to be close to the exchanges with nano-second delays, which means there is major exposure to an outage at those sites.”

Similarly, even with a good arrangement in place, con-nectivity to data centres is not always so straightforward and presents another concentration risk. As the $5bn fund CTO explains: “We use a data centre that’s further away because we rely less on low latency, but that does present some issues around the connectivity we can obtain.”

Connectivity is another risk to be aware of, one which appears to be offset by larger data centre providers offer-ing multiple internet service providers and thus diverse routing from multiple providers, according to George Ralph, managing director at Richard Fleischman and As-sociates.

Many facets of riskConcentration risk clearly exists in many facets of the technology function at hedge funds, but is perhaps an issue that garners less attention than things like cyber-security. Regulators, so far, have had little to say on the issue from a technology standpoint, with the only recent reference to the issue contained in the FCA’s proposed guidance on cloud computing in November 2015.

While the 15-page document had plenty of detail around outsourcing guidance, the specific issue of vendor concentration risk was addressed with just one simple line, advising firms to “monitor concentration risk and consider what action it would take if the outsource pro-vider failed”.

Aima, in a response part-authored by CTOs, said that while it agreed the FCA’s suggestions were a good idea “in

theory”, it would be especially problematic to implement for large service providers with many clients, and smaller firms with confidential client lists.

“The FCA is simply cautious not to see firms put all their eggs in one basket,” said an FCA spokesperson. “We don’t have much to elaborate on yet as we are still going through the responses to the consultation, but we expect to issue full guidance by April or May this year.”

The SEC meanwhile has not released specific guidance on technology concentration risk, but does advise firms reliant on third parties for elements of their technology to have a business continuity plan in place as per its cyber-security guidance, released in April 2015.

The SEC also cites IAA compliance rule 206(4)-7 as a guide for what it requires from firms, specifically a foot-note within that regulation which states: “We believe that an adviser’s fiduciary obligation to its clients includes the obligation to take steps to protect the clients’ interests from being placed at risk as a result of the adviser’s inabili-ty to provide advisory services after, for example, a natural disaster or, in the case of some smaller firms, the death of

the owner or key personnel.” In the meantime, CTOs are clearly

aware of the issue and for certain ele-ments of concentration risk such as exposure to an administrator or prime broker, there is no easy solution. “We protect ourselves by having the en-cryption key so no vendor can access our data, but if we lost the encryption keys we’d be in very bad shape,” says the CTO of the $800m US fund.

Like many technology issues, protec-tion against concentration risk often boils down to the budget allocated to spend on IT. “I think CTOs are very aware of this but protecting against it comes down to the budget they are given,” says Ralph.

“The obvious thing is to think about all the potential existing bottlenecks in a business, and it should be con-sidered as part of risk management, because the board should be given the chance to make an informed decision weighing up cost versus risk.” To mitigate this, Ralph ad-vises firms to perform functions such as random checks on staff activity, automated documentation, hardware maintenance, updated firmware on hardware, hardware support, manually testing for replication failure over con-figuration, virtualising servers, diversifying router con-nectivity and choosing good IT partners.

Bricknell meanwhile, recommends split-vendor models despite the risk. “There are a number of single points of failure many vendors don’t address, so you should diversi-fy your environment,” he says.“It gives you complete ven-dor diversity so you can spin up into a provider’s capacity but it also saves you money.”

Some managers are even asking about social engineering protection and how data is being protected by their admin or PB from that perspective, because their trading strategy is their holy grail Samer Ojjeh, EY


COMMENT

may also be changed to meet requirements imposed on the provider by bigger clients, and you as a smaller client have to just go along with the new version because that’s what you have signed up to.

As long as the infrastructure of that standalone chunk is plugged in, it can be properly managed and secure, but you don’t want that compromised by a third-party part of your ecosystem.

So sometimes it is best to follow the sheep on utility services but if you’re clear about what is integral to your IP, you may decide those are the sort of things you want to develop and host yourselves and have a bit more control over. There is a degree of policing necessary here from a technology standpoint, but it is a very fine line for the CTO to tread.

Businesses do not want IT service people being draconian or being the arbiters of restriction, and as the CTO, you certainly don’t want to be viewed as slowing up agility and innovation.

There might be some accountability at the service provider for the service delivery, but the real balancing act is for CTOs to be really clued up on what business risk appetite is and how far that can be pushed.

You can buy 15 layers of redundancy and work out your critical times of the year, but if IT isn’t glued into that business risk and able to make the right decisions, the risk is the business goes off and makes its own decisions in isolation and you end up getting nowhere.

This is also an issue where networks are concerned. The trouble is too many data centre providers have phenomenal redundancy in their data centres but have either not partnered with good network providers to provide flexible networking.

What various protocols are supported over that network is critical in the trading business.

Networks have to be totally switchable and transparent, and if they are in any way deficient your mobile experience over a WAN or an internet WAN using a laptop and virtual private network or Citrix connection, all of those remote abilities to do your job and connect back to your disparate network of vendors is no good.

The trouble is sometimes people are developing really good applications but not thinking about what it needs to have to work optimally over a network.

If you haven’t got something to make that network manageable or optimal, you are buying yourself a lot of trouble.

Hybrid IT has become a buzzword but one that is complicated, in my view, by the whole cloud discussion.

True hybrid IT to me is a mixture of elements. So you might make use of utility compute and things that can be

bought off the shelf and plugged in to your IT ecosystem.A good example is a HR system. Why build one

when you can buy a SaaS product sitting in the cloud, and you just need to ensure the security is good and that it is accessible for people to log into it in your IT environment?

But if your IT ecosystem consists of part dedicated compute, part multi-tenancy backup and a SaaS service such as salesforce or Office 365, you then have to work out how many of those individual chunks of services from a workflow perspective need to be glued together, and there may need to be application programming interfaces (APIs) between them.

Part of your workflow is ensuring the efficient running of your end to end services, so things that happen to your email system also need to happen to your CRM system.

That means if you have a SaaS-provided HR system that isn’t upgraded the same way, your ecosystem can be screwed up, probably while you’re dealing with a trading system or something else.

Something else to be aware of: all these different elements of IT are individual pockets, and what sometimes happens is a business can, if allowed to, buy discreet IT offerings, plug them in and claim they work.

They may work for a particular function but the CTO must take a broader view: is it operable and can business continuity be sustained if a hybrid SaaS product is plugged into the ecosystem?

Also, are you happy with the security of the service? And what happens if say, one of your staff leaves but

your SaaS provider doesn’t rescind their access to the CRM system because allowing people access to these systems is not something run through your internal directory, so might be out of sight, out of mind.

Upgrades are another threat here. A SaaS service will be changed at the will of a SaaS provider and sometimes

HYBRID SYSTEMS: WHAT TO LOOK OUT FORIAN FLAVILL, HEAD OF IT SERVICE DELIVERY AT $17BN LONDON BASED SECONDARY INVESTOR COLLER CAPITAL, GIVES A PERSONAL VIEW ON THE POTENTIAL PITFALLS OF HYBRID IT SOLUTIONS

COMMENT

IAN FLAVILL,COLLER CAPITAL


To create this meant setting up everything with one low-latency data centre provider, our primary, and while that was happening we sought out a secondary provider to replicate the storage in a different location further away. As a result, if our primary site goes down, I can move everything to the secondary and be back up fairly quickly. Granted, we compromise a bit on latency at the secondary location for a slightly cheaper solution, and like anything else having this arrangement takes

upfront planning, adds a bit of extra expense and extra work.

But I think it’s essential, because once you outsource to the cloud you don’t own the infrastructure housing your data anymore, so we all need to ask what the backup is and what happens in the emergency scenario? How do you test that?

To fully safeguard your data, I think you also need to be aggressive when negotiating vendor contracts and push for tougher provisions on vendors in your terms & conditions.

We negotiated the contract with our cloud provider and with our primary data centre that says if we don’t have access for x amount of time we can immediately demand the data. They have to come through and provide that, so we can replicate our system at our secondary site.

Vendors will have built a streamline system they want to be able to easily roll out which is fine, but

I want to know where my data is being stored and I want to know how to access it quickly and efficiently if there is a problem. By having a backup data site, I don’t worry as much about it because you can’t really prepare for Armageddon, but unless something enormous happens we can just dump our primary.

It seems obvious, but for the sake of a little extra budget from my board and a potentially awkward conversation at the vendor contract stage, I’m comfortable demonstrating to our investors that we’ve put in place the best protections we can for our data.

In the last five years cloud use has gone from being something people thought about to being an integral part of the technology infrastructure of most hedge funds. This is mainly because from a cost perspective; cloud-based solutions are relatively inexpensive compared to what it used

to take for a small to mid-sized manager to build out IT infrastructure in-house.

The real change here from an operational standpoint is that until recently, each IT technology need was being fulfilled by a different service provider and most data was being housed internally.

Now, the issue of cloud is much more at the forefront and we are seeing big providers taking up a lot of market share. Of course, being cheaper makes cloud use an easy sell to a hedge fund’s management team and takes away a lot of the operational headache and time cost of overseeing different vendors, and having to negotiate different contracts with them at various points in time.

But my biggest concern with cloud use is data backup, and entrusting much of my data to a single cloud provider is what I would consider a risk. That means we have to take a bit of a leap of faith with the cloud vendors we use, because it is really hard to verify everything the service provider is telling you about their own protections.

So for example, does the vendor really have certain service controls in place, and do they really have the disaster recovery (DR) capabilities they say they do? And what do these marketing factsheets on DR they give you really even mean? You can’t take down their service across the board and test to see what it takes to go from no access to data to fully recreating your storage and virtual servers.

I take a lot of the marketing documents put out by these firms on things such as DR recovery systems with a healthy degree of scepticism. So we host things such as our EMS and HR data in the cloud because it is cheaper and more efficient than employing separate providers to host that, but we also back this up by placing our data into two geographically disparate Tier 3 data centres.

SECRET COO:DATA BACKUP ESSENTIALSTHE COO OF A $120M HEDGE FUND OUTLINES THE UPSIDE OF USING DUAL DATA CENTRES AS WELL AS A CLOUD PROVIDER

SECRET COO

To fully safeguard your data, I think you also need to be aggressive when negotiating vendor contracts and push for tougher provisions on vendors in your terms and conditions”

HFM TECHNOLOGY US AWARDSFebruary saw delegates gather in the glamorous surroundings of 583 Park Avenue in New

York City to celebrate the best in class off erings of service providers in the hedge fund

technology community at the annual HFM Technology US Awards.

Hosted by former BBC business journalist Declan Curry and judged by a panel of CTOs

and independent experts, the event saw fi rms compete for highly-coveted Awards in 30

categories spanning the range of service provision including best mobile application, best

new cloud application and best CRM system. As well as the winners, three categories

received highly commended awards from the judges, refl ecting the close competition

among fi rms in this space. HFMTechnology would like to congratulate all of this year’s

winners and thank the event sponsors for making the awards possible.


HFM TECHNOLOGY AWARDS

BEST ANALYTICS SOLUTIONWinner: HazelTree; Collected by: Tara Nolan, HFMWeek

BEST CRM SYSTEMWinner: Backstop Solutions Group; Collected by: Chris DeNigris, global

marketing manager; Highly Commended: Imagineer Technology Group

BEST DATA MANAGEMENT PRODUCTWinner: Imagineer Technology Group; Collected by: Ari Treuhaft,

director of Client Service

BEST DATA PROVIDERWinner: Barchart OnDemand; Collected by: Matt Giarelli, sales director

BEST DERIVATIVES SOLUTIONWinner: Numerix; Collected by: Carson Leven, Americas Sales

BEST EMSWinner: REDI Global Technologies; Collected by: Liz Rodan, software

engineer


BEST FUND ACCOUNTING SOFTWAREWinner: Eze Software Group; Collected by: Austin Mayeux, associate,

Business Development

BEST IT CONSULTANCY SERVICEWinner: Eze Castle Integration; Collected by: Vinod Paul, managing

director

BEST MANAGED ACCOUNT PLATFORM TECHNOLOGYWinner: NAV Consulting; Collected by: Tara Nolan, HFMWeek

BEST OMSWinner: Eze Software Group; Collected by: Robert Lindon, Business

Development

BEST INFRASTRUCTURE PROVIDERWinner: Options; Collected by: Alexandra Bethanis, HFMWeek

BEST IT NEWCOMERWinner: KlarityRisk; Collected by: Kenneth Turchin, sales executive, SS&C

Technologies

BEST MOBILE SOLUTIONWinner: AlphaSense; Collected by: Matt Angrist, SVP Sales

MOST INNOVATIVE OUTSOURCED SOLUTIONWinner: Matsco Solutions; Collected by: Jim Serpi, director of Global

Operations

MOST INNOVATIVE TECHNOLOGY SOLUTIONWinner: PENSCO; Collected by: Mark Peck, strategic account manager

BEST IT SERVICE FOR SMALL AND START-UP FIRMSWinner: RFA (Richard Fleischman & Associates); Collected by: Grigoriy

Milis, CTO

BEST NEW CLOUD HOSTING SERVICEWinner: Agio; Collected by: Alexandra Bethanis, HFMWeek

BEST POST-TRADE TECHNOLOGYWinner: ENSO Financial Analytics; Collected by: Dwaine Alleyne, partner

AlphaSense is a registered trademark of AlphaSense, Inc. | www.alpha-sense.com/hfm

Request your free, 2-week trial today.Visit www.alpha-sense.com/hfm

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BEST RISK MANAGEMENT PRODUCT Winner: Imagine Software; Collected by: Brendan Quinn, director

of sales

BEST TRADING PRODUCT Winner: Deltix; Collected by: Vinson Wong, professional services

manager

BEST NEW CLOUD APPLICATION Winner: Edgefolio; Collected by: Leopold Gasteen, CEO

MOST INNOVATIVE TECHNOLOGY SOLUTION FOR SMALL AND START-UP FIRMSWinner: BCA Research; Collected by: Stephanie Lee, senior business

development manager

BEST SECURITY SOLUTIONWinner: eSentire; Collected by: Chris Siclare, director of sales North

Americas

BEST WORKFLOW MANAGEMENT SYSTEMWinner: AlphaPipe; Collected by: Alexandra Bethanis, HFMWeek

BEST COMPLIANCE PRODUCT Winner: Fidessa; Collected by: Matt Grinnell, compliance strategist;

Highly Commended: Compliance Science

BEST RISK MANAGEMENT SOFTWAREWinner: Investor Analytics; Collected by: Sherry Wolfe, head of client

services

BEST TRADING AND EXECUTION TECHNOLOGYWinner: LMAX Exchange ; Collected by: Tara Nolan, HFMWeek

BEST VDI PROVIDER Winner: Alphaserve Technologies; Collected by: Cameron Floyd, MD,

Business Development

BEST COMPLIANCE PRODUCT FOR SMALL AND START-UP FIRMSWinner: Cordium ; Collected by: Jordan Schwartz, partner and managing

director; Highly Commended: Laven Partners

MOST INNOVATIVE TECHNOLOGY SOLUTION - SINGLE PRODUCTWinner: ALPS, A DST Company; Collected by: Jason Cholewa, VP,

business development


COMPANY PROFILE

Symphony may have att racted the moniker of “Bloomberg killer” in the media since launching its secure instant messaging ser-vice globally last year, but its CEO David Gurle is keen to make a key distinction.

“Bloomberg doesn’t care about what we do,” says Gurle, who doesn’t bristle at the label, but is quick to explain what he views as the key diff erence between his fi rm and the media and data giant.

“Th ey [Bloomberg] are an information terminal and not a communication platform provider. We have diff erent ambitions,” he explains.

“Bloomberg is focused on the capital markets, we are focused on enterprise infrastructure. Th e overlap is messaging; Bloomberg is present across 325,000 users, but there are about eight million users in this market across many verticals using communication tools every day. We want to have the biggest impact on that, and that is the DNA of Symphony.”

Gurle became CEO of Symphony in September 2014 following the integration of his previous fi rm, Perzo, with an instant messaging technology service called Live Current which was fi rst built by Goldman Sachs as an internal messaging system.

Perzo, an instant-messaging soft ware fi rm, was co-founded by Gurle in September 2012 aft er stints at Reuters and Microsoft , where he founded Microsoft Lync business, and Skype, where he ran the Skype Enterprise business division.

Th e comparisons between his fi rm and Bloomberg seemed apt following an incident in April last year, before Symphony had offi cially launched its platform globally.

During April 2015 Bloomberg’s terminal experienced an outage, preventing its users from receiving pricing data, executing trades, or communicating via Bloomberg’s Instant Bloomberg messaging service.

And it is in the communication off ering that the two fi rms really overlap. At the core of Symphony’s business is direct messaging functionality executed, Gurle explains, in a fully secure and compliant way.

It is as such, a direct rival to the instant messaging systems off ered by Bloomberg as part of its terminal; and also Reuters – where Gurle worked for around seven years – which off ers the Th omson Reuters Eikon product, seen until recently as the nearest direct competition to Bloomberg’s messaging service.

Speaking to HFMTechnology from his offi ce in the corner of Symphony’s 8,590 square foot suite in New York’s 1 World Trade Center building, Gurle is enthused about a

SINCE LAUNCHING GLOBALLY LAST YEAR, SYMPHONY HAS BEEN REFERRED TO BY SOME AS A POSSIBLE ‘BLOOMBERG KILLER’ BUT CEO DAVID GURLESAYS THE FIRM HAS OTHER IDEASBY ALEX CARDNO

SYMPHONY AIMS TO SIDESTEP BLOOMBERG


shift in emphasis he thinks Symphony can bring to financial services communication.

“We come from the observation that the current communications landscape is ripe for change,” he says.

“Businesses use email, conference calls, etc, and communicate across silos of tools that are not tailored to the enterprise of financial services. This landscape will fundamentally change in the next five years. We are going to bring more interaction, security and compliance to the game. Users will focus on the intention instead of on the tool.”

Technical aspectsThe tool in question allows users to send instant messages through an online portal accessed through double-layered verification security, with an SMS authorisation required per individual login unless password save is set.

The different aspects of Symphony’s platform are supported by open-source software, which the firm is committed to using, including the likes of Linux (Centos 7), MongoDB, Nginx, Apache HBase and Solr, Elasticsearch, Sensu and Tomcat.

Hosted in the cloud with Amazon and Google as providers, it allows individual users to create their own groups for both internal messaging to different individuals or business units and external messaging to clients and prospects.

The service facilitates both one-to-one chats and multi-chat groups similar to a web forum or WhatsApp group on a mobile device, while also offering public and private chat rooms and blast messaging for groups.

Symphony has also created a ‘bring your own key’ concept, meaning that, while all data flows across Symphony’s wires are encrypted, it is never in a position to decrypt those messages.

“That means customer data is protected and ensures we are not in the business of making a business out of their data. We are just a utility in that regard,” explains Gurle.

Like its rivals, Symphony makes historical data searchable but the company seeks to provide further security by creating search algorithms invisible to both the user and the firm itself to ensure that individual searches are not identifiable.

Its instant messaging service also allows users to integrate email, video and task manager to the functionality.

The shoulders of giantsGurle is forthright about offering the service through the Amazon and Google cloud offerings, arguing it allows Symphony to “ride on the shoulders of giants” with the potential to scale at a lower cost. It has 110 developers employed in-house to develop and maintain the service.

Communication is at the heart of what Symphony does, but some of the strategic partnerships the firm has struck indicate Gurle has further ambitions.

The platform’s global launch coincided with a series of strategic partnerships with information providers Dow

Jones, McGraw Hill Financial and Selerity, with more partnerships expected in future.

As a result, McGraw Hill has integrated its S&P Capital IQ tool into Symphony’s platform, while Dow Jones provides its news feed and Selerity aggregates data from Twitter feeds to deliver breaking news notifications to Symphony’s platform.

Given that it is only providing a small portion of what Bloomberg offers its subscribers, the price differential is significant. Symphony charges $180 per user each year while Bloomberg’s an annual fee is around $20,000 per user.

At the time of the September 2014 integration, 15 firms invested $66m in Symphony Communication Services to create the merger of Perzo and Live Current and provide working capital for the new entity.

Symphony was quick to follow up with another $100m capital raising in 2015 – Google and UBS were subscribers – to launch its Enterprise Edition in August 2015 to make Symphony available to companies that handle and transfer sensitive information in regulated environments.

As of March 2016, the firm has raised nearly $170m of investment from firms including Google, Goldman Sachs, BlackRock, Citadel, JP Morgan and Wells Fargo.

While Gurle says he has no plans to raise further capital this year, he does not rule out a third funding round in 2017.

Many of the large banks that participated in the funding rounds are now clients of Symphony, something that is causing Gurle to turn his attention more to the buy-side, especially hedge funds and other asset managers.

“I am aggressive towards the buy-side. They tend to be the market-makers and we already have a big footprint on the sell-side. We are looking at hedge funds and also the top 20 mutual funds like Fidelity, Wellington etc,” he explains.

“The benefit to them as I see it, is the way they market intelligence becomes more effective and the way information is shared becomes simpler. Email is not interactive enough. Traders use email to talk to the back office but it falls short when you need to keep a group of people in sync.”

For hedge fund CTOs, it appears to be a case of wait and see. One CTO at a $700m systematic fund said his firm would look at Symphony but would be reluctant to use it on top of its existing Bloomberg subscriptions.

But a CTO at a $2.5bn hedge fund is more upbeat on its prospects. “It’s a good platform with nice security. I like the model but it will take time to get traction,” the CTO says.

Gurle’s vision is for current users of Symphony to be using its platform for all business communications within three to five years. That is the first change he is hoping to bring about. The second change is the collaboration offered by the platform becoming an operating system on its own.

“That transition will be more productive to the end user as they will spend less time conduct switching. Time sharing things will shrink and that will mean more productivity,” he argues. “Our platform is not about making internal communications more effective, it is about making your ecosystem more effective. It is a huge undertaking.”


SURVEY

LOOKING AT THE CLOUD

This month’s readership research takes a look at internal IT compliance at hedge funds, asking readers in the US and Europe what sort of procedures they make employees adhere to, to ensure best practice.

Amid intensifying regulatory focus on IT processes and controls at investment advisers, internal staff compliance is becoming a bigger issue for CTOs who not only must come up with policies and procedures, but increasingly have to create training programs to ensure the threat of staff error is malicious intent is mitigated as far as possible.

Taking in a broad cross section of managers with respons-es from European fi rms (56%) just edging US responses, it seems many managers are taking a multi-faceted approach to ensuring internal compliance with IT procedures.

Of those that responded, 83% made use of an employer handbook to document policies and procedures, while 61% of respondents included IT compliance in their employee contract terms and conditions.

Training has also clearly become a bigger priority, with nearly three quarters (74%) of fi rms using onsite and/or off site training to bring employees up to speed with IT.

Employee passwords are also clearly subject to regular change at hedge funds, with 53% of survey-takers chang-ing passwords on a quarterly basis, while 18% changed em-ployee passwords on a monthly basis and just 12% changed passwords bi-annually, leaving 18% of fi rms allowing em-ployees to change their own passwords.

Where passwords are concerned, two-factor authentica-tion is a growing trend among hedge funds, with 59% of hedge funds implementing this and 40% not. Compared to last year however, this represents growth with just 40% of respondents polled last year using two-factor authentifi ca-tion.

74% of fi rms still allow staff to bring personal devices to the offi ce for use in a work environment, compared to 26% who do not.

Social media is clearly still a divisive issue among hedge funds with an interesting split among the fi rms that re-sponded to this survey.

None of the fi rms responding to the survey allowed em-ployees access to Twitt er on their networks, while just 5% of fi rms allowed employees access to Instagram and 11% al-lowed employees access to Facebook.

Th is represents a signifi cant change in att itude from 2015, where 67% of fi rms polled said they allowed em-

In this month’s readership survey, we take a look at internal compliance practices at hedge funds and assess what IT practices firms implement for their staff

WHERE IS YOUR FIRM BASED?Q1

HOW IS COMPLIANCE DEALT WITH WITHIN YOUR FIRM?Q2

HOW REGULARLY ARE EMPLOYEE PASSWORDS CHANGED?Q3

Empl

oyee

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dboo

k

83%

Con

trac

t ter

ms

& c

ondi

tions

Ons

ite /

off

site

trai

ning

74%

Oth

er 4%

Weekly

0.0%Monthly

17.6%Quarterly

52.9%

Biannually

11.8%Employees change their own passwords

17.6%

USA44%

EUROPE56%

61%


SURVEY

Yes 74%

No 26%

Yes 59%

No 41%

Yes 59%No 41%

WHICH OF THE BELOW SOCIAL MEDIA SITES DO STAFF HAVE ACCESS TO?Q6

HOW IS YOUR ARCHIVING / TRACKING SYSTEM DESIGNED?Q8

WHERE IS THE ARCHIVING SYSTEM STORED?Q9

ARE PASSWORDS FITTED WITH TWO-FACTOR AUTHENTICATION?Q4DO YOU ALLOW STAFF TO BRING THEIR OWN DEVICES FOR USE IN A WORK ENVIRONMENT?

Q5

DO YOU PROHIBIT PERSONAL EMAIL USE ON YOUR OFFICE SERVER?Q7

ployees to use Facebook and Twitter using the company network.

By contrast, 63% allowed employees access to Linkedin, and 21% of firms responding denied access to all social me-dia sites.

Personal email is also a divisive issue, with 59% of re-spondents blocking its use at work while 41% allowed it. This was also a turnaround on last year, where 60% of firms did allow staff to access personal email and just 42% banned such access.

The vast majority of firms who responded (85%) use a third party to design their archiving and tracking systems, with 10% buying this sort of product off the shelf and just 5% building it in-house.

Of those firms that use archiving, 43% stored this func-tion in the private cloud compared to just 19% who used the public cloud for this, reinforcing the trend of hedge funds’ preference for building out private cloud structures for data.

A third of respondents (33%) meanwhile, used a data centre for this compared to 5% who stored this function inside the firm.

Transferring company data across multiple devices ap-pears to be an issue where practices are sharply divided, with 57% of survey-takers prohibiting this practice among employees, compared to 43% of firms that allow it.

LinkedIn 63%Facebook 10.5%Twitter 0%

Instagram 5.3%None of the above 21%

Public cloud 19%Private cloud 42.9%

Data centre 33%Inside the firm 4.8%

Third-party 85%Off the shelf 10%

Built in-house 5%


COMMENT

Most notably for hedge funds, amendments were proposed in relation to “employee mobility”, which some MEPs believed should be protected as a fundamental freedom of greater importance than trade secret protection. Indeed, some of those amendments have now been agreed in what is likely to be the fi nal version of the directive.

Th e position is not however, as bad as once feared. Th e fi nal version of the directive is fairly neutral for hedge funds interested in protecting trade secrets, as a result of sensible compromises made at the last minute. Th e directive also does not interfere with existing national law relating to contractual restrictions on employees, for example restrictive covenants and gardening leave provisions.

While the position currently varies between countries, from an English law perspective relevant to all hedge fund operations in London, it should remain the case that funds will be able to enforce their trade secrets against employees who have illegitimately taken, or memorised, information.

Funds will also be able to protect information that is suffi ciently sensitive that, although known to the employee from the course of their work, it cannot reasonably be said to be part of the employee’s skill and experience. Th is includes trading algorithms developed in-house, and intellectual property used by the employee but developed by the fi rm prior to their employment.

Th e directive does however make clear that trade secrets under the directive should not interfere with mobility of employees. Th e fact that this is now enshrined in European law will also give employees a further argument as to why they should be allowed to make use of information that they know from their previous employment.

In the longer term, the fact that these issues will be subject to the jurisdiction of the European courts also means that the law could evolve – potentially unfavourably – as the years pass, adding some uncertainty for employers.

Th e directive is likely to be passed by the European Parliament in April, following which Member States will have two years to bring national law into compliance.

Many hedge funds keep their employment contracts and their information security protocols under constant review. However, even with the prospect of the UK – where many hedge funds are based – voting to leave the EU in June, they should at this stage ensure that all contractual documentation and procedures are best in class and that everything is being done to protect trade secrets.

For funds that get it right, the directive should allow them to protect their trade secrets across Europe. On the other hand, if they get things wrong the consequences will be less good.

The dilemma of how best to protect intellectual property within a hedge fund is not an easy one. Of all industries, the hedge fund sector is the one where the most portable pieces of information can be worth the greatest amount of money. Protection of confi dential

information has therefore always been essential. Th is is particularly true for quantitative, algorithmic

and/or high frequency trading funds, where knowledge as to which techniques or signals lead to profi table trading is developed through extensive research. Equally, the creation, development and maintenance of these systems oft en requires signifi cant investment in individuals who may then, as is their right, decide to leave a fi rm to pursue another option.

For funds trading in this way, issues can oft en arise around what these employees intend to take with them to new roles, or how long they need to be placed on gardening leave. Naturally, this gives rise to disputes between hedge funds and their former employees, which have been a frequent occurrence in recent years. Typically, these arise when one or more senior employees decide to break away from an existing fund.

Because such employees are oft en party to valuable information, the original fund will want to retain as much of that information as possible by preventing the employee from using it, and may litigate to achieve this, although this can be diffi cult, since the law generally gives employees a degree of latitude.

Against this already challenging background, news that upcoming EU legislation in the form of the EU Trade Secrets Directive had the potential to make things worse in this area was unwelcome to hedge funds.

Th e Directive was intended to provide a minimum standard of protection for trade secrets across the EU and hence would aff ect all funds operating in Europe, given the very limited protection that previously existed in some countries.

In technology specifi cally, the directive set out to encourage innovation, research and collaboration between industries and other stakeholders such as universities or other institutions. However, MEPs proposed many amendments to the draft ing of the directive, some of which risked undermining its original objectives.

INTELLECTUAL PROPERTY DILEMMASMARK RIDGWAY, PARTNER AT ALLEN & OVERY, SAYS THE FORTHCOMING EU TRADE SECRETS DIRECTIVE SHOULD BE ON THE RADAR FOR HEDGE FUNDS, PARTICULARLY IN REGARD TO INTELLECTUAL PROPERTY

COMMENT

MARK RIDGWAY,ALLEN & OVERY

SERVICES DIRECTORY To promote your company, email: directory@hfmweek .com or call UK +44 (0)20 7832 6615 // US +1 (212) 268 4919


Capital Support Ltd, 3 Harbour Exchange Square, Docklands, London, E14 9GE // Nigel Brooks, Managing Partner // T:+44 (0)20 7458 1290// [email protected] // Carrie Saunderson, Head of Business Development // T:+44 (0)20 7458 1290 // [email protected] Capital Support is an award winning managed IT services and support provider. The Company specialises in implementing and supporting end-to-end solutions for a large portfolio of global finance sector customers. Based in London, Capital Support has grown steadily since forming in 2002. This successful growth has been fuelled by Capital Support’s commitment to innovation and exceptional customer service. The company ethos is to make IT simple for its customers, replac-ing the burden of high contact IT services with intelligently designed packaged solutions that span from consultancy, design and deployment all the way through to live support. Capital Support’s number one objective is to become the most trusted and respected managed IT services provider in the UK.

Charles Square Ltd, 16 Charles Street, Mayfair, London, W1J 5DS // Craig Harris, Director // Tel: +44 20 3823 4344 // [email protected] // Gareth Broekmann, Director // Tel: +44 20 3823 4343 // [email protected]

Charles Square is an independent IT management consultancy specialising in the financial sector. Covering all of your technology needs, from consultancy through to delivery and monitoring, working with you as your IT partner and not just an outsourced provider. We offer a range of services for you to choose from depending on your needs. This includes but is not limited to our core four offerings; virtual Chief Technology Officer / Virtual IT Manager / Virtual Chief Security Officer and Technology Support Partner. For more information regarding our services please feel free to visit our website www.charlessq.co.uk

Dell SecureWorks, Clayton Fields // [email protected] // Tel: +1 404 961 5398 // web: www.secureworks.com // North America, One Concourse Parkway, Atlanta, Ga 30328 // UK , 1st Floor 1 Tanfield Edinburgh EH3 5DA Scotland, Tel: +44 (0) 131 260 3040

Recognized as an industry leader by top analysts, Dell SecureWorks provides world-class information security services to financial institutions of all sizes to protect their IT assets, comply with regulations and reduce security costs. We offer a diverse portfolio of information security services that empower you to focus resources where they make the most sense - your firms, clients, partners and funds. Our security experts serve as an extension of your team, filling in the gaps to strengthen your organization’s security and compliance postures, and reduce your risk.

Gravitas, 475 Park Avenue South, 32nd Floor, New York, NY 10016 Jonathan Shapiro, Business Development // +1 212 400 2252 // email: [email protected]

Gravitas is a leading collaborative outsourcing platform for the alternative investment space. Founded in 1996, Gravitas helps hedge funds smartly scale their businesses through its people+process+technology offering. Gravitas experts provide front to middle office workflow support on a fully serviced and configurable investment platform that caters to your business controls. The company is based in New York with offices in Chicago, Greenwich, Mumbai and Ahmedabad, India.

Intralinks, Inc, T: 1-866-INTRALINKS or +44 (0) 20 7549 5200 // www.intralinks.com/hedgefund

Intralinks Fundspace™ for hedge fund managers provides best-in-class tools to distribute information to investors securely, efficiently and confidently. From cap-ital-raising to investor reporting, Fundspace provides a single, end-to-end solution to effectively engage with and meet the increasing demands of institutional investors. With over 25,000 endowments, foundations, pensions, consultants, and advisors accessing information from over 500 fund managers, Fundspace is the world’s leading communication platform for alternative investment. For more information, visit www.intralinks.com/hedgefund.

Eze Castle Integration, Dean Hill, Executive Director // +44 (0)207 071 6802 Simon Eyre, Director of Service // +44 (0)207 071 6835Interpark House, 7 Down Street, London, W1J 7AJ, email: www.eci.com Eze Castle Integration is the leading provider of IT solutions and private cloud services to more than 650 alternative investment firms worldwide, including more than 100 firms with $1 billion or more in assets under management. Since 1995, Eze Castle Integration has developed financial vertical-specific IT solutions including infrastructure design and management (both in our Eze Private Cloud and on premise), telecommunications, business continuity planning and disas-ter recovery, archiving, storage, and internet services. These solutions are complemented by a broad service organisation that delivers outsourced IT support, including a 24x7x365 help desk, project and technology management services, consulting services and more. Eze Castle has presence in major financial centres including 8 US offices, a Singapore office, and a Hong Kong office in addition to its London office.

Adam Phones Ltd 1-3 Dolphin Square, Edensor Road, London W4 2ST // Tel: +44 (0)20 8742 0101 // Lee Robertson (Sales Director) [email protected] // Alex Phillips (Head of Mobile) [email protected] Phones deliver award winning mobile and high-performance fixed line connectivity solutions to the alternative investment market. Established in 1987, we are trusted to deliver critical, failsafe communications to over 300 alternative investment firms globally. We leverage established relation-ships with Tier 1 fixed line and mobile carriers, application developers and equipment manufacturers, carefully integrating selected services to deliver powerful, resilient connectivity solutions. Consultancy, provisioning and management are key elements of the Adam Phones proposition: a proven single contact for design, delivery, contracting and billing, underpinned by 24/7 customer support. Adam Phones also partner with managed IT service providers, collectively delivering connectivity to the finance sector.

eSentire, Mark Sangster, VP of Marketing // Tel: +1 519 651 2200 // 1 Penn Plaza, Suite 4501, New York, NY 10119 // www.esentire.com

eSentire® is the leader in Active Threat Protection solutions and services, the most comprehensive way to defend enterprises from advanced and never-before-seen cyber threats. eSentire’s flagship offering, Network Interceptor, challenges legacy security approaches, combining behaviour-based analytics, immediate mitigation and actionable intelligence on a 24x7x365 basis. The company’s dedicated team of security experts continuously monitors customer networks to detect and block cyber attacks in real-time. Protecting more than $2trn in combined assets, eSentire is the trusted choice for security decision-makers in financial services. In 2014 eSentire was named Best Security Service Winner at HFM's US Services Awards. For more information visit www.esentire.com and follow @esentire.

SERVICES DIRECTORY To promote your company, email: directory@hfmweek .com or call UK +44 (0)20 7832 6615 // US +1 (212) 268 4919


Tribeca Technology LTD, Simon Foster, Business Development Manager // T: +44 (0) 8000 122 225 // [email protected] // www.tribeca-it.com // 1 Berkeley street, London W1J 8DJ Tribeca Technology, founded in 2006, is a provider of exceptionally high quality IT support services to the alternative investment industry. Our products are tailored to each individual client and include private cloud services, infrastructure management, IT security, telephony and BCP to name but a few. Critical system monitoring, rapid onsite response and helpdesk IT support is provided 24/7/364 via our offices in London, New York and Hong Kong. Tribeca’s products and services are constantly evolving to address changes in the financial services industry and to offer the very latest developments in technology, all to the advantage of our clients.

Jim Serpi – London // T: +44 (0) 20 7821 4950 // [email protected], Annette Cantarella – New York // T: +1 212 634 6465 // [email protected] // Suite 26, 2 Station Court, Imperial Wharf, London SW6 2PY // www.matscosolutions.com Matsco Solutions Group, established in 2002, is the trusted IT support partner for hundreds of hedge funds and alternative investment firms across Europe, the United States and Asia. Specialising in hedge fund technology, Matsco Solutions provide best-of-breed industry solutions to its clients including private cloud services, business continuity planning, specialist start-up services, technology design, support and monitoring, virtual CTO services and a 24/7 engi-neer staffed helpdesk. The company was co-founded by Patrick Ferrall and Jim Serpi, who bring a wealth of industry experience, and has offices in London, New York, Stamford, San Francisco Bay, Hong Kong, Singapore and Beijing.

FUND

AD

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RFA, US: Yohan Kim, COO, T: +1 212 867 4600, 330 Madison Avenue, 19th Floor, New York NY 10017 UK: George Ralph, Managing Director, Tel. + 44 207 093 5010, 52 Brook Street, London W1K 5DS

RFA has been the trusted technology partner to our clients for more than twenty five years. Offering a full range of technology solutions with global data center operations, RFA serves the IT needs of businesses including hedge funds, private equity funds, fund of funds, private wealth management and alternative asset management firms. Whether clients require on-site or cloud-based solutions, telephony or data systems, fully managed IT or project management, RFA has the expertise to meet the industry-specific needs of our clients. RFA is headquartered in New York City with operations in New York, Connecticut, Boston, MA, and London. Website: www.rfa.com

Punit Satsangi, EMEA Managing Director // [email protected] // T: +44 (0)20 3310 33041 St. Martins Le Grand, London, EC1A 4AS // www.sscglobeop.comSS&C GlobeOp is a leading fund administrator providing the world's most comprehensive array of financial technology products and services under a public, independent, single platform. Our expertise in business process outsourcing supports complete lifecycle capabilities, available on a stand-alone basis to hedge funds, fund of funds, private equity funds, family wealth offices, and managed accounts. Furthermore, our dedicated regulatory solutions group com-bines expertise and technology to provide our clients with the infrastructure and support they require to stay compliant. By outsourcing to SS&C GlobeOp, clients can reduce their technology investment and operational risks, leaving them more time to focus on asset generation and portfolio management.

netConsult Ltd, Holden House, 57 Rathbone Place, London, W1T 1JU, T. +44 (0)20 7100 3310, F. +44 (0)870 318 3126 // www.netconsult.co.uk // David Mansfield, COO // T:+44 (0)20 7100 3310 // [email protected] // Laura Zverko, CMO // T:+44 (0)20 7100 3310 // [email protected] //

Established in 2002, netConsult is an award winning provider of managed IT Services to the global alternative investment industry. We aim to provide a high level of technical expertise to our clients combined with a dedication to customer service. Our ethos is based upon designing secure IT platforms which are manageable over the long term. We are a trusted technology provider to a large portfolio of clients ranging from small start ups to large global funds. net-Consult provides a bespoke service to its clients and provides a full suite of IT services including cloud services, outsourced IT, BCP, virtual CTO and IT security.

Nirvana Solutions, Mark Donovick, Vice President - Marketing // 80 Broad Street, Suite 1808, New York, NY 10004 // Tel: +1 212 768 3410 // email: [email protected] // London: Tony Premi // [email protected] // +44 (0) 203 174 2342 Nirvana Solutions is a cloud-based financial technology company that provides outsourced portfolio management solutions to hedge funds, prime brokers, and fund administrators. Nirvana is headquartered in New York City, with offices in San Francisco, London, and Dehli.Investment managers need a reasonably priced, entry-level yet scalable system which enables them to minimize upfront capital outlay and concentrate on alpha generation instead of systems and data management. Nirvana consolidates and manages data across multiple asset classes, funds, accounts, traders, prime brokers and custodians in a single integrated platform to provide our clients with cloud-based OMS, PMS, risk management and reporting solutions.

SmartStream, Nathan Gee, Marketing Manager, Tel: +44 (0) 20 7898 0630

SmartStream is a Global software and managed services provider that in challenging markets conditions has outpaced its rivals in the financial markets sector, creating an impressive base of more than 1,500 customers. At the heart of this success is the ability to react to client, market and regulatory changes through innovative solutions for the middle and back-office. That is why, even in challenging market conditions, the company continues to invest more than 20% of revenue back into research and development. The combination of SmartStream’s post-trade processing solutions, together with its unique Data Management Services, creates a real-time and pre-emptive approach to reducing trade failures while also accelerating and automating trade processes.

Misys, James Pinnington, Head of Hedge Fund Sales // T: +44 (0)20 3320 5750 // [email protected] For more information about Misys products, please contact us via our website // www.misys.com Misys has more than 25 years’ experience in providing innovative software solutions to the world's leading financial institutions. FusionInvest is Misys’ flag-ship solution for alternative investment that delivers flexibility, transparency and consistency throughout the investment process, enabling true collaboration across functional departments. FusionInvest’s unrivalled asset class coverage and powerful analytics are housed within a single, yet modular investment platform, which provides the solid foundation and scalability buy-side firms need to stay ahead of the competition in a fast moving world.

WINNER OF THEMOST INNOVATIVE TECHNOLOGY SOLUTION

US TECHNOLOGY AWARDS

2016 HFMAwarded: Most Innovative Technology Solution – Single Product

www.alpsinc.comDENVER | BOSTON | NEW YORK | SEATTLE | TORONTO

Since 1985, ALPS has been a leading provider of innovative

investment products and customized solutions to the financial

services industry. We are a leader in the industry by continually

providing exceptional client service.

MIAMI | DALLAS | SAN FRANCISCO | GRAND CAYMAN

Michael Procter | 720.917.0591 | [email protected]

We’re proud to have wonMOST INNOVATIVE TECHNOLOGY SOLUTION FOR SMALL AND START-UP FIRMSHFM US Technology Awards 2016

Edge

@bcaresearch BCA Research bcaresearch.com +1 514.499.9550

BCA Investment Research Solutions help the global investment community connect the dots between market activities and outcomes with a suite of products to make more informed investment decisions. Introduced in 2015, BCA Edge is a cloud-based platform that overlays customized information and data with a set of tools that reduce the time it takes to discover and integrate research into investment workfl ows. BCA Edge bridges the gap between BCA’s market-leading research and decision-making with this innovative platform designed directly with, and for investment professionals.

To learn more, visit bcaresearch.com/solutions.

BCA is the leading independent provider of global investment research. Since 1949, BCA’s mission has been to support its clients in making better investment decisions through the delivery of leading-edge analysis and forecasts of all the major asset classes and economies, as well as educating, informing and stimulating discussion through clear and thought-provoking research.

march 2016 the definitive guide to hedge...

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