This survey highlights results of a recent Avere Systems Survey capturing challenges that hedge fund IT managers are experiencing in an era of constant and rapid change.

1. Hedge Firm
IT Challenges
in an Era of
Constant and
Rapid Change
2 0 1 6 F I N A N C I A L S U R V E Y

2. Avere Systems and VLG Research surveyed
middle-office managing directors in financial
services organizations to learn what challenges
are of highest priority over the next two years.
I N T R O D U C T I O N
2

3. Q U E S T I O N 1
Investment banks
Brokerages
Mutual funds
Retail & commercial banking
Hedge funds
What business segment of
the financial services industry
are you primarily involved in?
47.4%
21%
10.5%
15.8%
5.7%
Financial Services Segment
Investment banks
Brokerages
Mutual funds
Retail
Hedge
funds

4. Q U E S T I O N 2
With which function of the
financial services industry are
you primarily involved?
Information Technology 95%
Compliance & Business Continuity Mgmt. 5%
Research
Front-Office functions
Back-Office support
Risk Analytics
Financial Services Function
Information Technology
Compliance & BC

5. Q U E S T I O N 3
Do you run your own pricing
and risk analysis algorithms?
Yes, we perform our own
Some; we both perform our own
and outsource a portion of it
No, we outsource pricing and
risk analysis computing functions
26.3%
58%
15.8%
Runs Own Pricing & Risk Algorithms
Some (Both perform own and outsource)
YesNo

6. Q U E S T I O N 4
What is your average nightly
job volume for pricing and
analytic processes?
Less than 500 cores
500 – 4999 cores
5000 – 9,999 cores
10,000 or more cores
I don’t know
11.1%
5.5%
16.6%
22.2%
44.4%
11.1
5.5
16.6
22.2
44.4
0
5
10
15
20
25
30
35
40
45
50
Less than 500
cores
500-4999 cores 5000-9,999
cores
10,000 or more
cores
I don't know
Average Nightly Job Volume

7. Q U E S T I O N 5
How do you predict the demand
for risk analysis jobs will change
in the next two years?
Increase by less than 50%
Increase by 50% to 100%
More than double
Stay about the same
Decrease by less than half
27.7%
38.8%
11.1%
22.2%
0%
27.7
38.8
11.1
22.2
0
5
10
15
20
25
30
35
40
45
Increase by <50% Increase by 50-100% More than double Stay about the same
Demand for Risk Analysis Jobs

8. Q U E S T I O N 6
Which measurement means the
most to your evaluation of new
products and services?
Ability to increase alpha throughput
Ability to more precisely predict risk
Ability to more precisely price assets
Comparative cost savings
Return on investment
11.8
35.3
5.9 5.9
41.2
0
5
10
15
20
25
30
35
40
45
Alpha
throughput
Predict risk Price assets Cost savings ROI
Most Important Evaluation Measurement
11.8%
35.3%
5.9%
5.9%
41.2%

9. Q U E S T I O N 7
What would you consider a
valuable, realistic increase to
alpha throughput?
10% increase
25% increase
50% increase
Double or greater
29.4
47
23.5
0
5
10
15
20
25
30
35
40
45
50
10% increase 25% increase 50% increase
Considered a Valuable, Realistic
Increase to Alpha Throughput
29.4%
47%
23.5%
0%

10. Q U E S T I O N 5 - 7 C O M P A R I S O N
27.7
38.8
11.1
22.2
0
5
10
15
20
25
30
35
40
45
0-50% increase 50-100% increase Double or greater Stay about the same
Prediction of Demand for Risk
Analysis Jobs in the Next 2 Years
29.4
47
23.5
0
0
5
10
15
20
25
30
35
40
45
50
10% increase 25% increase 50% increase Double or greater
Considered a Valuable, Realistic
Increase to Alpha Throughput

11. Q U E S T I O N 8
Considering analytics capacity
and effectiveness, which method
is most appealing to you?
Allow larger numbers of models and simulations
to run on your existing infrastructure
Expand existing infrastructure to meet growing
capacity and performance demands
Enabling use of cloud resources to improve
capacity without moving data
Adopting solutions that allow for a focus on
processing power spend instead of infrastructure
0
1
2
3
4
5
6
7
8
9
#1 (Most Appealing) #2 #3 #4 (Least Appealing)
Analytics Methods: Most to Least Appealing

12. Q U E S T I O N 9
0
1
2
3
4
5
6
#1 (Most Frustrating) #2 #3 #4 #5 #6 (Least Frustrating)
What is the most
frustrating part
of your role?
Time to evaluate new technologies
Measuring success
Working within company imposed boundaries
Budget
Time to results
Predictability of IT needs to support continued growth

13. In summary, hedge fund IT managers are faced
with a growing challenge: Meeting the need for
more power and faster speed while justifying
their spend by showing a good ROI.
R E S U LT S