Wed, Apr 16, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Traditional hedge fund disaster recovery model is obsolete

Monday, May 02, 2011

Arup Das
Opalesque Industry Update - The earthquakes and nuclear disaster in Japan coupled with the unrest in the Middle East have caused hedge fund managers to take a closer look at their disaster recovery (DR) programs. According to Alphaserve Technologies, the IT provider to some of the world’s largest hedge funds, many managers will be shocked to find that not only are they several years behind the advanced approach used by the big banks, but are also paying up to 50% more for old legacy ‘managed disaster recovery’ technology and methods. As hedge funds rethink how they will respond in the face of disasters, Alphaserve points to the route taken by these large banks as being an effective solution.

The traditional hedge fund industry approach to DR, which experts term as ‘active/passive’, requires hedge fund managers to purchase or rent a whole second set of servers that sit idle in one of the traditional DR providers’ data centers until needed – which is almost never. This means that not only are many hedge funds wasting resources but also are writing huge checks to DR providers to house the underutilized servers in a facility that may be of lesser quality and higher cost than top-tier data centers. Moreover, in the event of an actual disaster, it may take as long as 3-5 hours to get the systems up and running again, requiring employees to connect to the alternative infrastructure and trust that the transition to the DR platform provides the same user experience.

“For years now, the big banks have realized the flaws in the ‘active/passive’ system and have implemented what we like to call an ‘active/active’ system. This system, which is basically just a robust, cost-effective infrastructure that is split over multiple locations, has no servers sitting idle and makes use of higher quality, lower cost, top-tier data centers,” said Arup Das, CEO and CTO of Alphaserve Technologies.

Mr. Das explains that, if the old active/passive model featured four working servers sitting in the fund’s offices and four idle servers sitting in the DR facility, the new active/active model instead utilizes only 2 active servers in each location.

Any two of these servers have enough excess capacity to take on all network functions if needed and are constantly copying information from the servers in the office to the servers in the data center. Should disaster or a power outage strike, the fund can be back up and running almost instantaneously. Employees of the hedge fund could then access the servers remotely from their homes or anywhere else with an internet connection rather than driving out to the physical location of the DR center. Using this system, funds can save upwards of 50% on operating, hardware, storage and maintenance costs.

“There is a widely held perception that switching DR providers is a tedious, long and costly ordeal. In truth, the relocation of hardware, migration of data and connection of remote infrastructure monitoring, management and analytics tools are all simple processes that can be completed in as little as a few days,” added Mr. Das “Every hedge fund is required to have DR, but that doesn’t mean every hedge fund should continue to use the same outdated and costly approach.”

(press release)

About Alphaserve Technologies
Alphaserve Technologies serves as the IT advisor to over 100 financial services clients around the world including marquee hedge funds, banks, private equity firms, broker dealers, and midsize and startup hedge funds. Alphaserve Technologies ‘smart sources’ with your team by translating ‘tech talk’ into tangible and meaningful business opportunities. Our clients engage us to gain institutional class IT expertise that is scaled to fit the size of their firm in the areas of Advisory, Integration and Managed Services (A.I.M.). Alphaserve offers cost-effective services that strategically align your business goals and processes with technology requirements...Corporate website: Source
KM

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Banner
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing
  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing – Big hedge funds bought Puerto Rico's junk bonds, Fidelity explores new trading venue amid flash trade concerns, Crisis-era Greek bonds reward early buyers with big effective returns, Cargill unit discloses stake in Freddie preferred[more]

    Big hedge funds bought Puerto Rico's junk bonds From Reuters.com: Several large hedge funds doubled down on Puerto Rico in last month's giant bond sale despite the U.S. territory's financial struggles, the Wall Street Journal reported, citing confidential documents reviewed by the newspa

  2. CTAs could face new challenges in a rising rates environment[more]

    Bailey McCann, Opalesque New York: CTAs have taken a beating performance wise lately, and asset flows reports show that investors aren't sticking around to see how the movie ends. Now, a new white paper from Roy Niederhoffer and Coen Weddepohl notes that as interest rates start to tick back u

  3. Commodities – Popular value fund manager David Iben bets on Russia, gold,[more]

    From Reuters.com: With large bets on Russia and North American gold miners, one of the best performing stock pickers in the wake of the 2008 financial crisis is back with a new fund that reflects his deep aversion to following the crowd. In the Kopernik Global All-Cap Fund, David Iben is follo

  4. Opalesque Exclusive: Pensions, endowments, family offices reconsider life settlement investments[more]

    Bailey McCann, Opalesque New York: Hedge funds were once the largest investors in the life settlement industry, now the industry is seeing more interest from pensions, endowments and family offices directly. Life settlements have always been considered a niche part of the investing landscape, an

  5. SEC allows investment funds to use social media[more]

    Bailey McCann, Opalesque New York: The Securities and Exchange Commission (SEC) has released new guidance letting investment funds and advisors use social media to promote client reviews. The guidance seeks to assist investment managers in developing compliance policies and procedures reasonably