Cutting Hedge

As part of Wilmott Magazine's article on hedge funds, Naj Alavi of Xenomorph discussed the most common requests, technology-wise, made by hedge fund clients.

[Wilmott Magazine] What is foremost in terms of the technological needs for hedge funds at this point in time?

The primary needs voiced by hedge funds in their dealings with Xenomorph have been:

1. Market analysis toolkit
The ability to automate the scanning of a universe to identify – with ease – trends or opportunities that would otherwise take considerable development resource, maintenance, or processing to complete.

2. Risk management
Risk management has always been key to all institutions, but, and as of late, risk management has become of paramount importance – especially as funds get into more innovative and complex products. The need is not so much to get out of using spreadsheets, but rather to engineer a means to manage the risk involved that is inherent as a by-product of spreadsheet complexity and innovation.

3. Data management
There are two aspects to data management being seen by Xenomorph: the first is the quality of data that firms are using to make decisions; and the second is the ability to tap into any data vendor with data of any frequency.

[Wilmott Magazine] What is your business doing to further enhance services to customers with an interest in this segment?

1. Market analysis toolkit
The combination of TimeScape’s data model, its SpreadSheet Inside (SSI) technology, its APIs, and its plug-and-play framework enables users to construct very powerful analyses that can be scheduled, create automated reports or emails, or send messages to downstream systems to act on the findings. This aspect of TimeScape frees up the users to devote their time and effort to more value-add tasks rather than writing and supporting reams of code and checking accuracy and minimizing errors.

2. Risk management
TimeScape seamlessly deals with multiple asset classes and enables the user to manage the risk on those asset classes centrally and with ease. This allows firms to consolidate their risk and reporting without having to pull risk numbers from their equity, fixed income, or derivatives systems.

Additionally, TimeScape’s SSI technology reduces the reliance on end-user spreadsheets. Historically, spreadsheets have notoriously been used to store data (as a pseudo database) and analyze the stored data. By storing data in databases accessible to TimeScape and moving the analytics into SSIs, the spreadsheet becomes a simple viewing tool. This route leads to the data and the analytics being stored and managed centrally thereby reducing operational risk and addressing the concerns of the regulatory bodies.

3. Data management
TimeScape’s data management suite allows firms to extend and customize the data validation and cleansing functionality to ensure quality data is being fed into the firm. TimeScape’s data model allows firms to store the raw data and the cleansed data side-by-side (along with who changed what, why and when) to fulfill auditing requirements and to provide an end-to-end process to manage the firm’s data.

TimeScape’s SDK framework enables TimeScape to be extended to accept data from data vendors not currently supported or new feeds that become available or needed. Again, the TimeScape data model makes allowance for data of any shape, size, or frequency to be captured, stored, validated, and cleansed.

Download the entire "Cutting Hedge" article including Naj's contribution