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Hedge Funds

The Hedge Fund industry has witnessed remarkable growth over the last decade leading to operational challenges. There is increased pressure from investors and regulators for greater transparency amidst stiff competition. Investment products are becoming increasingly complex and new markets are creating greater investment risk. As a result, fund managers, prime brokers and fund administrators expect greater sophistication across the service spectrum from service providers.

Infosys BPO combines technology and process capabilities to enable Hedge Fund industry to compete effectively in the ever-changing market dynamics.

Challenges for Fund Managers
Increasing pressure from investors and regulators for greater transparency. In addition, there is a significant trend towards multiple prime brokers. The multi-prime situation has added to the challenges of managers leading to:

More points of contact and interface (multiple accounts) with prime brokers
Additional document management/counterparty monitoring
Portfolio aggregation and reporting challenges
Increased staff pressure with multiple prime reconciliations
Trade booking and allocation complexity
Frequently valuing illiquid securities
Increased error rate in the back office

Challenges for Prime Brokers

Need for substantial balance sheets to minimize counterparty exposure
Intense competition as hedge fund managers go multi-prime
Siloed operations with the equity and fixed income desks operating separately and on different platforms
Replacing legacy systems to achieve automated and efficient transaction processing
As funds spread their trading among their multiple prime brokers and employ advanced electronic trading technologies such as algorithmic trading and DMA tools, their prime brokers are less likely to have an accurate picture of the fund's overall exposure
Demand for broker-neutral and independently-hosted technology bundled with middle- and back-office operational support

Challenges for Fund Administrators

Increased transparency leading to greater demand for quality portfolio valuation and custom reporting
Rapidly growing trading volumes and derivatives processing
Use of multiple prime brokers creates the need to consolidate, account for and report on aggregated portfolio data
Demands for offering middle-office services
Need to bundle front- and middle-office technology products with traditional back-office services
Valuing hard-to-price instruments
Shortage of skilled staff to manage growing outsourcing by Hedge Funds

Infosys BPO Advantage

Customized platform-based outsourcing solutions providing state-of-the-art technology through Paladyne systems delivering superior platform-based solutions
Domain training and sharing of best practices through Centers of Excellence (COEs) across alternative investments, hedge funds, etc.
Highly skilled workforce ensuring each employee has the relevant skills for industry-specific operations
Technology investments on a regular basis to make processes more robust and effective, ensuring faster and better output

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