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Spinning out of another fund/multi-manager

Client Background

The firm is a 2023 Tier one, multi-billion dollar launch, spinning out of a $60 Billion hedge fund.

The Challenge

Implementing equivalent (and better) investment processes and tools with fewer resources.

The deeply fundamental and risk management focused founder was searching for the most efficient and effective solution to replicate (and enhance) the technology resource footprint received at his prior firm.

Specifically, their risk process includes multiple content vendors, and included multiple workflows, calculations and outputs that are critical to their decision-making framework. They needed a flexible and extensible solution, or to hire additional people and build it themselves.

Beyond risk, the team wanted a scalable solution, across other workflows, that they could grow with, to centralize and organize/visualize internal and external decision-making intelligence, including market data, internal forecasts (financial models and notes), risk data, etc.

The Solution

The fund chose a high performance, real-time, easy-to-use and configurable Risk Management solution from EDS – implemented with precision, quickly and affordably. It was built around their vision and investment process, streamlining workflows, providing valuable feedback, and supported by a highly experienced team of former investment professionals and quantitative analysts. They started with a low-risk, proof of concept (POC) that required minimal commitment from the client and proved the value upfront. In 2023, They began their journey with EDS implementing Risk Management and added Portfolio Construction and Research Management (RMS) shortly after in 2024.

The Result

The hedge fund gained confidence that they have the tools, technology and processes in place to achieve success.
The firm streamlined what would have required additional staff, multiple applications, vendors and manual processes. Instead, they chose to have one, centralized yet flexible solution across Risk Management while working seamlessly with other in-house critical processes and with the ability to use the same platform for other workflows as they require. Within a year, the firm expanded with additional capabilities from EDS, including RMS and portfolio construction (centralizing all internal data) and paper portfolios, the ability to empower the team to make decisions in a non-live environment.

1. A Risk Management solution for decision-making: With their Risk Management solution aligned with their vision, they were able to maximize the value of their research and intelligence to enhance decision-making and drive continuous improvements. Specifically, all risk content was captured, in real-time and could be configured and organized multiple ways, into templates and/or powerful dashboards.

2. Time savings and risk partner optimization: EDS replaced multiple, disparate processes, centralizing all their risk information across multiple vendors, providing a user-friendly, productive environment to research and discuss risk management.

3. Risk Management on their terms: With EDS, the value of their risk process and data (from multiple vendors) skyrocketed, based on:

  • A simple and intuitive application that any member of the investment team could use.
  • Uniquely configurable to their firm, including master and sub- funds, and each team and individual member.
  • Multiple, custom dashboards as workflows, configured to their requirements.
  • One-click analysis, including simulating portfolio changes and optimizing for exposure changes.
  • The ability to identify multiple risk, factor, return and exposure changes across any time-series in a few clicks, helping the investment team gain valuable and actionable insights in real time.
  • Ability to isolate both asset selection and outside risks and returns, down to analyst and stock level.
  • Before the trade, they can now incorporate factors into idea generation and portfolio construction.

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 “best practices” compliance and reducing leakage due to any employee turnover.

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