The CEO of Agio Technology tells us how to invest our tech dollars if we started our own $100 million hedge fund. By Phil Albinus
What are the technology needs for hedge funds in 2011?
Bart McDonough, CEO of Agio Technology: There are three areas. First, there are cost reductions across all areas. Second, they have greater coverage needs, such as expansion into other markets and offices. This puts a strain on IT even though they are adding one or two traders in these regions or locations they have to increase their coverage hours by 100 hours if they trade in Europe or Asia. This increases complexity and offers a greater skill set. You need a new network, data and server people. Third is the overall complexity going on with compliance needs. Hedge funds have to maintain and manage more data over multiple platforms such as mobile devices, IM, and text messaging and social media and they have to be responsible for it.
We’re seeing a lot of hedge funds starting up these days. Do these traders from larger, more established firms expect to have the same tech they had at their former firms?
McDonough: Yes, to a point. For e-mail, they want that to be the same. The same goes for how they work from home and on the road — they want that to be the same. In terms of their back-end systems, they understand that their needs are very different so with that they have a very open mind and they don’t have a lot of preconceived notions. They don’t know necessarily how the books and records were kept at Goldman Sachs, for example — they just did the trading. When you talk to them about those solutions, they are lot more open minded. Even with the OMS, which is a bit more personal to them, they are very open minded to that.