The growing role of data technology in hedge funds

Among the most important hedge fund trends would be the growing role of big data in the investment process. As the world becomes more and more connected, so do sources of insights that can guide hedge funds as they navigate the investments industry. Indeed, behind every good hedge fund management decision is a tremendous amount of data, and many hours spent on monitoring news and market developments, as well as the conduct of background research on the industry players. For these efforts, hedge fund managers need state-of-the-art tools that allow for big data collection, from trade records, daily, weekly, monthly, and quarterly reports. Moreover, they should allow for warehousing, and last but not the least, analytics. The job of big data technologies would not simply be about gathering statistics and reports. They should also be able to ensure that information are derived only from legitimate and authoritative sources. They should contain features for classifying information according to useful parameters – asset categories and price points, as well as pertinent currency exchange rates and fee structures. Based on all the available data, the software should also be able to present the movements on the market as they happen. Analysis of these developments should be easy to make, and the information should be made easily accessible for downloading as a report for sharing with brokers and shareholders, on an as-needed basis. Here we put emphasis on the importance of real-time updates, because this sector is marked by a fast-changing dynamic, requiring players to be on their toes all the time, ready to make informed decisions at the drop of a hat. A cloud-based data management system will be of great help especially to hedge funds, if brokers, fund managers, and client-investors would like to benefit from file-sharing features, and an always-online data hub. A cloud environment also allows for instant data checking, and helps boost a firm’s compliance to industry regulations and federal laws. Furthermore, a good data hub generally reduces the need for manpower, as tasks can be simplified as well as automated. The best types of data management technologies also feature customizable and scalable applications, so that features can be added depending on the specific needs of the hedge fund manager. These days, hedge funds can tap the assistance of asset servicing firms to provide the much-needed support in handling big data. With their help, managers can enjoy smooth, efficient, and cost-effective data management.