Vendor Quantifies Benefits of ‘Cloud’
Reprint for Hedge Fund Alert, September 17, 2014
The unidentified firm is a client of Liquid Holdings, a publicly traded company that is among a growing number of technology vendors promoting cloud-based programs as cost-effective alternatives to locally installed software. Liquid drew up a case study on the manager and distributed the results to current and prospective clients last week, offering rare details on the costs and logistics of competing portfolio-management systems.
The subject of the case study is an equity-options manager that runs both commingled funds and separate accounts. In the second quarter, it signed up for Liquid’s offering, which replaced technology from four separate vendors. As a result of the switch, the manager’s annual technology costs are projected to drop to $60,000, from $150,000.
Download the case study to learn why?
The move also allowed the firm to free up staff who had previously spent time manually reconciling data with its various vendors. Liquid’s system automates the gamut of order-management and portfolio-management functions, including trade reconciliation, performance attribution, risk management and client reporting. It turns out the manager’s trading counterparties also are saving money because they previously paid fees to plug in to the old order-management system. Liquid doesn’t charge such fees.
An increasing number of small and mid-size fund operators are adopting so-called hosted, or cloud-based, systems to manage their front-, middle and back-office operations. In addition to Liquid, which counts about 130 clients, Broadridge Group, Imagine Software and SunGard are among the technology vendors with cloud-based offerings.
A study of fully integrated portfolio-management systems that Aite Group released last year found that 36% of the vendors’ clients were using cloud-based technology, up from just 6% five years earlier. “As asset managers have sought to curb expenses and firms have become more comfortable with hosted implementations, hosted trading solutions have increased significantly,” the report said.
The unidentified firm is a client of Liquid Holdings, a publicly traded company that is among a growing number of technology vendors promoting cloud-based programs as cost-effective alternatives to locally installed software. Liquid drew up a case study on the manager and distributed the results to current and prospective clients last week, offering rare details on the costs and logistics of competing portfolio-management systems.
The subject of the case study is an equity-options manager that runs both commingled funds and separate accounts. In the second quarter, it signed up for Liquid’s offering, which replaced technology from four separate vendors. As a result of the switch, the manager’s annual technology costs are projected to drop to $60,000, from $150,000.Download the case study to learn why?
The move also allowed the firm to free up staff who had previously spent time manually reconciling data with its various vendors. Liquid’s system automates the gamut of order-management and portfolio-management functions, including trade reconciliation, performance attribution, risk management and client reporting. It turns out the manager’s trading counterparties also are saving money because they previously paid fees to plug in to the old order-management system. Liquid doesn’t charge such fees.
An increasing number of small and mid-size fund operators are adopting so-called hosted, or cloud-based, systems to manage their front-, middle and back-office operations. In addition to Liquid, which counts about 130 clients, Broadridge Group, Imagine Software and SunGard are among the technology vendors with cloud-based offerings.
A study of fully integrated portfolio-management systems that Aite Group released last year found that 36% of the vendors’ clients were using cloud-based technology, up from just 6% five years earlier. “As asset managers have sought to curb expenses and firms have become more comfortable with hosted implementations, hosted trading solutions have increased significantly,” the report said.
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