HedgeFintech Breakfast Briefing

12 Hay Hill, Mayfair

April 2017


Obsidian and RFA

The hedge fund world is dramatically behind the times when it comes to technology. Yes – investment and data-focused tech has been around since the big bang of the eighties, and it has been crucial to the success and growth of the hedge fund industry, but after what is now 30 years of arguably the fastest technological growth we are now faced with a completely different landscape, which we have not adapted to.

Whilst hedge funds have been focused on alpha and AUM gathering the world has moved on. Practically every other industry has found ways to increase efficiencies and thus margins. In the grand scheme of things, we have done very little in this regard. We’re faced with pressure on fees, arguably correctly given some performances, so we must adapt. Rather than stick our heads in the sand and refuse to change fees (until investors eventually disappear) why don’t we see how we can increase our efficiencies so a reduced fee does not affect margins? The answer is in front of us – technology can save in the industry – but so few are aware of what it can do.

The craziest thing? The tech is already here. That which we need is either running in other industries or our own home grown pioneers have built products and services from first-hand experiences of industry issues. It is not the supply, it is the demand where our collective problem lies. The awareness of what is possible that is the crux of the matter. So, we thought a HedgeBrunch HedgeFintech morning was a good idea.

The Fintech world has made highly publicised gains and benefits for the wider banking and financial community but HedgeFintech is still nascent at best. We invited four top hedgefintech pioneers onto our panel  to tell us what is going on.

We were joined by experts from Obsidian Solutions (CRM), HedgeGuard (Risk and portfolio software), Laven Partners (Regtech) and Krzana (Datatech), on the morning to explore the current situation. Our findings were uniform across our panel – the tech has been built and some funds are taking advantage but, by and large, they’re just waiting for people to realise how game-changing and game-saving it is!

We are soon to reach a tipping point with hedgefintech, we just hope we get there before it’s too late. It will be an adopt or die apex which could kill off all but the most advanced funds if we are not prepared. It behooves each and every investor, fund and service provider in the hedge fund world to pay attention, or the pressure on our industry will result in failure.