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A Cottage Industry Goes Mainstream: Hedge Fund Technology in the Spotlight

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21 April 2004

Abstract

Boston, MA, USA April 21, 2004

The market forces affecting the hedge fund industry are too powerful to ignore. New regulatory requirements and the entrance of large traditional asset management firms are changing the landscape of the hedge fund industry.

In a new report, " ," Celent provides an overview of the various technology applications available to hedge fund firms and outsourcing services with fund administrators or prime brokers. The report also features current and anticipated trends in the marketplace.

Prime brokers, fund administrators and technology providers are converging on hedge fund managers. These three groups are eagerly adding supplementary services or launching new or enhanced solutions especially for the hedge fund community. "With so many providers clamoring to serve this market, everyone may wish they were a hedge fund manager," says

Denise Valentine, Celent analyst and author of the report.

As the hedge fund market heats up, hedge funds are looking to technology to maintain their competitive edge. Celent expects hedge funds will by and large avoid building these solutions in-house, however. Most solutions built in-house simply do not offer the competitive advantages of those built by professional technology vendors.

Hedge funds want technology vendors to help them improve their infrastructure and provide their constituents with access to enhanced support. Implementation of technology solutions that include formal business processes immediately provides a baseline for setting internal controls, enhancing the firm痴 credibility with prospects and clients.

It is only a matter of time before the SEC requires registration by hedge funds. Building the internal controls and preparing for a future with an increasing number of competitors is a progressive stance for the coming new era.

A

Table of contents is available online.

of Celent Communications' Retail Securities & Investments and Institutional Securities & Investments research services can download the report electronically by clicking on the icon to the left. Non-members should contact info@celent.com for more information.

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