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Alternative Market Briefing

How data management can lead to additional alpha and drive convergence of private equity and hedge funds

Friday, June 08, 2012

Benedicte Gravrand, Opalesque Geneva:

Gurvinder Singh, CEO and Bijesh Amin, Managing Director of consultancy shop Indus Valley, talked to Opalesque about (1) how data management can lead to additional operational alpha and (2) how data management is a key driver behind the convergence of private equity and hedge funds.

Indus Valley Partners (IVP) is a niche technology consultancy focused on the alternative asset management industry. It has served hedge funds, funds of funds, private equity groups and prime brokers since 2000, and has offices in New York, London, New Delhi, Noida and Mumbai.

Data management leads to additional operational alpha On data management leading to additional operational alpha, Amin explains that the concept of operational alpha is about active data management for alpha, i.e. what the service providers does with clients, "which involves a feedback loop post-trade." The risk managers and the CFOs understand this concept well as many explore the data in order to extract more basis points or get a better handle on the risk. This is something the custodians, the fund administrators and the prime brokers do not go into as it is not part of their job.

There are three specific areas regarding active data management for alpha. The first one is margin replication (e.g. the replication of prime broker margining).

"For example, if I am trading a very credit-intensive portfolio and I have a lot of G7 sovereign d......................

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