IT Directors – The hedge fund industry is maturing in a number of ways. It is one of the major recognised “alternative forms of investment”, perhaps better described as one of the major established forms of alternative investment. Funds are growing both in size and diversity of investment opportunity they provide. More importantly, they are increasingly viewed as a suitable investment vehicle for institutions, including public pension funds, that have boards of trustees and high levels of fiduciary responsibilities to their beneficiaries.

Industry observers comment that the hedge fund industry is becoming institutionalised and in consequence “its business practices are now being driven by the institutionalisation of the industry.” Institutional investors are and will be a growing influence in the hedge fund industry’s growth and mode of operation.The servicing demands will grow as institutional investors increasingly access hedge funds.

The trading strategies diversify.
“Servicing multiple clients with specific numerous and varied reporting and compliance obligations, mandates provision of efficient and cost effective post-trade allocation systems”.

Quite apart from any pressure from financial regulatory sources, institutionalisation and growth inevitably bring more formality to the mode of operation especially in the areas of administration and the operational and technology infrastructure to manage the post-trade process. These changes involve the appointment of chief compliance officers and chief operating officers with specific functional tasks and responsibilities and the emergence of infrastructures managed and controlled under these functional responsibilities.

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