A panel of experts debate if outsourcing is the best strategy to help firms maintain lower operating costs without sacrificing operational efficiency
Hedge funds of all shapes and sizes have a rough road head of them. Those funds that managed to survive the recent market turmoil must run a tighter ship by reducing operating costs and improving efficiency where possible. As a consequence, a growing number of hedge funds are looking to outsourcing for the first time or may be considering outsourcing ‘non-traditional’ processes, such as front-office operational support and middle-office functions.
The real question is whether there are outsourced services available that can properly support the operational needs of hedge funds? After all, hedge funds change strategies quickly, often trade more alternative asset classes and as a consequence, have higher demands for efficiency, speed and asset classes support. This is compared to the traditional asset management firms that third party service providers are used to supporting. Furthermore, the post-trade operational needs of a start up fund differ greatly from a larger, more established fund and again, the fund administrators and service providers must be able to accommodate both groups.
An established hedge fund and a new start up will discuss their different needs from outsourced service providers in an upcoming webinar. This event is a virtual roundtable complete with a panel of representatives from both the buyer and supplier sides. The group will not only discuss the pros and cons of outsourcing operations today but also share their specific needs and their operational goals for next year. Two different service providers will have the opportunity to respond to questions posed by the hedge funds and answer questions in a virtual RPF type discussion.
There will also be the opportunity for hedge funds tuning into the webinar to pose their own questions to both the peer hedge funds speaking and the service providers.
Below are some of the main topics already outlined to be discussed by our panel of industry experts. Should you wish to add topics or specific questions you may email me at Julia@derivsource.com As the event moderator, I will encourage useful questions from the wider audience so we may address this during the debate. And if you wish to attend please also get in touch because all DerivSource members get a significant discount!
Outsourcing for Hedge Funds – Addressing Cost & Compliance
Thursday, October 29, 2009 3:00 pm – 4:00 pm (GMT)
Post-crisis Changes to Services Requirements and Roles of Providers:
-What do hedge funds require from their service providers to improve a fund’s investor services and boost investor confidence?
-What are investors reviewing when conducting due diligence on a hedge fund? And how can an outsourcing provider assist in satisfying and exceeding investor’s expectations?
-How can a hedge fund get the most out of its relationship with its service provider?
-How can a service provider help fund start-ups get up and running quickly?
-What does a post-crisis RFP look like? Are there new requirements included?
-Prime Broker vs. Fund administrator – how is competition between these groups evolving in the provision of post-trade processing services?
-Big or boutique – when is a specialist service provider a better fit for a hedge fund? What are the pros and cons of boutique vs. larger fund administrator (i.e. custodian banks)?
Main areas of operations to be discussed include:
-Accounting (new accounting standards)
-Compliance (new regulatory requirements in both US and the UK)
-Independent Valuations (what is transparency really mean and to whom)
-Reporting – both risk and investor reporting including frequency, delivery, level of detail and the aggregation of data to provide detailed reports
-What is the newly emerging and ‘value-add’ operational services hedge funds would like the services providers to offer? Do fund wants support for more front-office processes?
-What are operational services and technology that differentiate service providers? What due diligence should a hedge fund regularly conduct with its service provider?
Full event brief including list of panelists:
* Julia Schieffer is the editor in chief of DerivSource.com, the online community and information source for professionals active in derivatives processing, technology and related services. You can contact her directly at Julia@derivsource.com or sign in to comment below.