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Centralizing research and risk management for decision-making

Client Background

A global hedge fund, who started with EDS in 2020 with ~$500 Million in AUM. As of 2024, the fund has a deep fundamental investment strategy across $2+ Billion in AUM.

The Challenge

While the investment team was actively using third-party software to manage their research, including Research Management (RMS) and Risk Management, their solutions did not fully meet their expectations and were too costly.

Specifically, their research management solution was inadequate – a basic repository for emails and notes, no real-time data, content was limited and most importantly, it lacked the framework needed to make it truly usable and valuable. There was little incentive to really engage with the solution. While data was centralized, the COO found it difficult to search and monitor content for regulatory purposes.

On the Risk side, the firm relied on their fund administrator’s solution for exposure, decomposition and return attribution analysis. While competent, it was heavily Excel- and paper- based (PDF), lacked personalization, did not operate in real-time and was very expensive. The proactive vision they had for risk was very difficult to achieve with their current solution.

These separate software solutions also did not talk to each other, nor share data, which reduced collaboration and made piecing stories together more difficult. The team felt they were missing opportunities and risks.

The team sought a flexible, user-friendly and cost-effective solution to centralize, and on their terms, organize and visualize internal and external, core decision-making intelligence including ideas, financial models, notes, documents, market data, risk data, etc.

The Solution

The firm streamlined what had required multiple applications, vendors and manual processes into one, centralized, yet flexible platform across Research Management (RMS) and Risk Management, while importantly working seamlessly with other in-house critical processes. The processes were fully integrated, with the ability to view and share data between the workflows, allowing the team to get the full picture, quicker and easier.

The Result

As the burden of bootstrapping resources subsided, the company was able to focus more efforts into generating alpha, and within just a few years their assets tripled. They also realized substantial cost and operational savings by reducing the number of vendors they were relying on.

1. An RMS for decision-making: As their RMS and risk management solutions became aligned with their vision, they were able to maximize the value of their research and intelligence to drive decision-making and continuous improvements. Specifically, all content was captured in real-time and with the ability to configure and organize the way they want to see it, whether into templates and/or powerful dashboards.

2. Time savings and research optimization: EDS replaced multiple shared Excel processes, and centralized all their research, providing a user-friendly, productive environment to research, discuss and select new ideas. Analysts are empowered to surface their ideas more readily to decision-makers, and the decision-makers are better prepared to select the best ideas.

3. Achieving “best practices” risk management: With EDS, usability and the value of their risk data skyrocketed, based on:

  • A simple-to-use and intuitive application uniquely configurable to their firm, including master and sub funds, each team and individual member.
  • One-click analysis, including simulating portfolio changes and optimizing for exposure changes.
    Helping the investment team gain valuable and actionable insights in real-time, enabling them to identify multiple risk, factor, return and exposure changes across any time series in a few clicks.
  • Ability to isolate both asset selection and outside risks and returns, down to analyst and stock level.
    Before the trade, factors can be incorporated into idea generation and portfolio construction workflows. 

4. Rapid implementation and strong compliance: The team was able to modernize and digitally transform their investment process, with little friction, creating greater accountability and transparency within the investment team. Importantly, all Intellectual Property (IP) was secure and in-house, achieving compliance best practices and reducing leakage due to any employee turnover.

5. Scalable: EDS technology is flexible, enabling the platform to grow as our clients’ needs grow.

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