Omgeo, the global standard for post-trade efficiency, today announced significant momentum within the hedge fund operations arena.
The firm has over 200 hedge fund clients, including the majority of the top 10 hedge fund firms worldwide(i). Omgeo's hedge fund presence also extends into the fund administration and prime brokerage area where the firm receives much of its hedge fund traffic through the top hedge fund administrators(ii) and gains client referrals through the world's top prime brokers(iii).
The penetration of Omgeo solutions into the hedge fund community has been phenomenal over the past several years, reflecting the changing needs of hedge fund managers as they expand and grow. In fact, in an industry whitepaper published by CAPCO, analysis found that "operational issues account for an alarmingly high proportion of hedge fund failures
(50%) and that expanding due diligence and monitoring practices to understand 'back office' capabilities can make a big difference in preventing or avoiding these failures(iv)."
"Achieving operational scale and managing a control environment are key contributing factors to being a successful investment manager" said Joe Trentacosta, Vice President, AQR Capital Management LLC. "Omgeo offers a platform which incorporates industry standards and scalable processes which allows us to effectively deal with multiple counterparts and varying amounts of trading volume in a seamless and efficient manner".
The firm also generates a significant amount of its hedge fund clients through prime broker referrals and provides its solutions to fund administrators, who rely on automation via Omgeo to achieve operational stability on behalf of their hedge fund clients. Additionally, the hedge fund community finds the relationships Omgeo has with technology partners including Advent, Linedata, BLOOMBERG AIM, Charles River Development, Eze Castle Software, Sophis and Tradar to be instrumental in automating their post-trade processing needs.
Additionally, as hedge funds grow in size, many have moved to adopt multi-prime-broker relationships and increasingly wanant to manage relationships between prime brokers and executing brokers as direct customers of Omgeo. Omgeo allows for the pre-confirmation of trade details on trade date, which provides assurance that the data being sent from an order management system to a prime broker has already been confirmed by the executing broker. This streamlined process means less checking of details, and therefore, fewer errors attributed to manual processes.
Tim Keady, managing director, sales and relationship management at Omgeo, said: "To have so many of the top 10 hedge fund firms as clients, in addition to the other stellar hedge fund firms in our client community, truly underlines Omgeo's dedication and continued work in the hedge fund space. With research suggesting that by 2010 nearly 25% of all institutions will be investors in hedge funds, Omgeo is well placed to take advantage of this trend and further serve the hedge fund community effectively."
Tim Lind, managing director, strategic planning at Omgeo, will speak on a panel at SIBOS in Vienna, Austria on Thursday, 18 September, titled:
"Are Hedge Funds the Root of All Evil?" There he will discuss the virtues of hedge funds and their critical role in generating liquidity in today's market.
i - Alpha Magazine/Institutional Investor's ranking of hedge funds, 2008
ii - HedgeFundManager's ranking of fund administrators, 2007 iii - Global Custodian's ranking of prime brokers, 2007
iv - CAPCO's "Valuation Issues and Operational Risk in Hedge Funds" whitepaper