Have you seen the new report from Celent about Hedge Funds and how they are upping their IT dollars in 2011? The report, titled Hedge Funds 2011: Navigating Tumultuous Waters, came out last week and presents some positive feedback on where the industry is headed in the next few years. Which is a good thing because, let’s face it, there was a lot of doom and gloom surrounding the financial services industry following the financial crisis. Though, through it all, it seems the hedge fund industry wasn’t listening to the negativity but instead decided to step up their game. In fact, as I’m sure you have seen in the news lately, in 2010 hedge funds had the largest quarterly increases in assets that the industry has ever seen. So naturally, with this increase in assets comes an increase in hedge fund IT spending. Within the Celent report it stated that hedge fund IT will grow at a compound annual rate of 4.4% through 2014. Maybe now firms will be able to automate their systems and in turn help themselves by reducing costs, mitigating operational risks and streamlining their overall processes. Also, with all the new and pending regulation, updating your IT systems can only further assist the firms with staying up to date and maintaining compliance.
On another note, I think this report came out at a perfect time since we have our 4th Annual Hedge Fund Operations & Technology conference coming up on April 14th in NYC. It will be interesting to see if these facts arise during the discussions, especially on the Technology Update session. With speakers from Fiserv, Smarsh, TKS Solutions and Omgeo it will be great to get a perspective from the solution providers on any updates and changes they are making to support this increase in IT spending.
So it seems like this is good news all around for the hedge fund industry. Increases in IT spending should definitely bring about better customer service and help to automate processes while complying with new regulation.