What You Missed: HFMWeek Breakfast Briefing

Importance of Cloud Tech Discussed at HFMWeek Breakfast

The potential importance of cloud-based technology to an industry faced with rising cost pressures and more regulatory scrutiny was discussed by panelists at HFMWeek’s Subscriber Breakfast in New York on Monday.

David Rhudy, partner at Protocol Capital Management, said hedge fund investors have been increasingly stressing the importance of a brand-name cloud provider, making it just as crucial as other service providers. “Your cloud sourcing or vendor sourcing in this space is something that is going to be reviewed from an operational due diligence standpoint, just as your audit, as your legal,” he said. “As you all know, if you have certain names within audit, legal and admin, if you have a cloud provider that is of quality, that is going to make that conversation a lot easier with that prospective investor.”

He was joined by fellow panelists Robert O’Boyle, executive VP and director of sales and marketing at event sponsor Liquid Holdings Group; Peter Lupoff, CIO of Tiburon Capital Management; and Chris DiNigris, global marketing manager, Backstop Solutions.

Peter Lupoff of Tiburon Capital, and a client of Liquid explained how the use of cloud technology was a key differentiator in the eyes of his investors. “We received a call from a managed account client, who had their money parked in two funds. He asked why we were up .1x, while the other fund manager was down 3x. Rather than spending the manpower and time building a response on off-the-bar, archaic spreadsheets, I hit a couple of buttons and replied in a matter of seconds.”  He added, “We find it liberating to have a hedge fund operating system to generate reports in real-time, every day with profound data to back up and support allocation decisions. And my clients have the same luxury."

Cloud technology gives fund managers the ability to answer investor questions with quantitative data while under pressure. The conversation continued to drive home the value of increased transparency and flexibility previously unseen by the industry.

O’Boyle told delegates that with the challenges smaller hedge fund managers face, such as ensuring they have a solid institutional infrastructure, the use of a hedge fund operating system in the cloud can give them the opportunity at an affordable price to be able to meet with investors that have historically only invested in the bigger funds.  “We are really focused on leveraging the cloud to enable hedge funds to do what they need to do which is not just about executing trades and running their portfolio but about getting out in the marketplace and meeting with potential investors,” he said.

Liquid's latest white paper on the 5 S's of SaaS uncovers how the cloud is re-engineering how hedge funds drive growth and better client management. Click here to read the white paper in its entirety.