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Hedge Fund IT Challenges Financial Survey

This survey highlights results of a recent Avere Systems Survey capturing challenges that hedge fund IT managers are experiencing in an era of constant and rapid change.

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Hedge Fund IT Challenges Financial Survey

  1. 1. Hedge Firm IT Challenges in an Era of Constant and Rapid Change 2 0 1 6 F I N A N C I A L S U R V E Y
  2. 2. Avere Systems and VLG Research surveyed middle-office managing directors in financial services organizations to learn what challenges are of highest priority over the next two years. I N T R O D U C T I O N 2
  3. 3. Q U E S T I O N 1 Investment banks Brokerages Mutual funds Retail & commercial banking Hedge funds What business segment of the financial services industry are you primarily involved in? 47.4% 21% 10.5% 15.8% 5.7% Financial Services Segment Investment banks Brokerages Mutual funds Retail Hedge funds
  4. 4. Q U E S T I O N 2 With which function of the financial services industry are you primarily involved? Information Technology 95% Compliance & Business Continuity Mgmt. 5% Research Front-Office functions Back-Office support Risk Analytics Financial Services Function Information Technology Compliance & BC
  5. 5. Q U E S T I O N 3 Do you run your own pricing and risk analysis algorithms? Yes, we perform our own Some; we both perform our own and outsource a portion of it No, we outsource pricing and risk analysis computing functions 26.3% 58% 15.8% Runs Own Pricing & Risk Algorithms Some (Both perform own and outsource) YesNo
  6. 6. Q U E S T I O N 4 What is your average nightly job volume for pricing and analytic processes? Less than 500 cores 500 – 4999 cores 5000 – 9,999 cores 10,000 or more cores I don’t know 11.1% 5.5% 16.6% 22.2% 44.4% 11.1 5.5 16.6 22.2 44.4 0 5 10 15 20 25 30 35 40 45 50 Less than 500 cores 500-4999 cores 5000-9,999 cores 10,000 or more cores I don't know Average Nightly Job Volume
  7. 7. Q U E S T I O N 5 How do you predict the demand for risk analysis jobs will change in the next two years? Increase by less than 50% Increase by 50% to 100% More than double Stay about the same Decrease by less than half 27.7% 38.8% 11.1% 22.2% 0% 27.7 38.8 11.1 22.2 0 5 10 15 20 25 30 35 40 45 Increase by <50% Increase by 50-100% More than double Stay about the same Demand for Risk Analysis Jobs
  8. 8. Q U E S T I O N 6 Which measurement means the most to your evaluation of new products and services? Ability to increase alpha throughput Ability to more precisely predict risk Ability to more precisely price assets Comparative cost savings Return on investment 11.8 35.3 5.9 5.9 41.2 0 5 10 15 20 25 30 35 40 45 Alpha throughput Predict risk Price assets Cost savings ROI Most Important Evaluation Measurement 11.8% 35.3% 5.9% 5.9% 41.2%
  9. 9. Q U E S T I O N 7 What would you consider a valuable, realistic increase to alpha throughput? 10% increase 25% increase 50% increase Double or greater 29.4 47 23.5 0 5 10 15 20 25 30 35 40 45 50 10% increase 25% increase 50% increase Considered a Valuable, Realistic Increase to Alpha Throughput 29.4% 47% 23.5% 0%
  10. 10. Q U E S T I O N 5 - 7 C O M P A R I S O N 27.7 38.8 11.1 22.2 0 5 10 15 20 25 30 35 40 45 0-50% increase 50-100% increase Double or greater Stay about the same Prediction of Demand for Risk Analysis Jobs in the Next 2 Years 29.4 47 23.5 0 0 5 10 15 20 25 30 35 40 45 50 10% increase 25% increase 50% increase Double or greater Considered a Valuable, Realistic Increase to Alpha Throughput
  11. 11. Q U E S T I O N 8 Considering analytics capacity and effectiveness, which method is most appealing to you? Allow larger numbers of models and simulations to run on your existing infrastructure Expand existing infrastructure to meet growing capacity and performance demands Enabling use of cloud resources to improve capacity without moving data Adopting solutions that allow for a focus on processing power spend instead of infrastructure 0 1 2 3 4 5 6 7 8 9 #1 (Most Appealing) #2 #3 #4 (Least Appealing) Analytics Methods: Most to Least Appealing
  12. 12. Q U E S T I O N 9 0 1 2 3 4 5 6 #1 (Most Frustrating) #2 #3 #4 #5 #6 (Least Frustrating) What is the most frustrating part of your role? Time to evaluate new technologies Measuring success Working within company imposed boundaries Budget Time to results Predictability of IT needs to support continued growth
  13. 13. In summary, hedge fund IT managers are faced with a growing challenge: Meeting the need for more power and faster speed while justifying their spend by showing a good ROI. R E S U LT S

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