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New Managers June 2014

SERVICERS' SPOT: New hedge fund managers ought to get scalable infrastructure from the start

 

Bob Guilbert

As you might have heard from Opalesque back in March, Eze Castle Integration, a provider of IT solutions and cloud services, issued a manual for budding fund entrepreneurs called " A Manager's Guide to Establishing a Hedge Fund."

Eze Castle Integration has helped more than 1,000 hedge funds launch, and over the years has "found that many firms start out the same way -- with a small set of equipment and software capable of servicing them year one but unable to scale as their business grows. This approach leads to wasted resources and new capital expenditures that could have been avoided had the firms aligned their business plan to their technology roadmap from the start," according to Mary Beth Hamilton, Vice President at Eze Castle.

We spoke with Bob Guilbert, Managing Director at Eze Castle, about what he thinks new hedge fund managers should do and avoid doing.

"One mistake that we've seen that people typically underestimate is management," he starts. "They are always looking for the right solution that's going to meet their needs immediately, and that includes the factor: 'do I do things in-house or do I outsource?' "

But people need to ask themselves where their competency lies, he continues. Is it the management of the technology and infrastructure or is it generating returns for their clients? "Most people will answer that their competency is in running the fund and investing the assets as opposed to running technology." So this is a major area of focus.

"The second one is looking towards the future and buying a solution that allows them to scale their business based on their technology needs," he adds.

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.
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