There is no denying that technology has drastically changed the financial industry. However, most of the technological advancements in the hedge fund space have been focused on the fund strategy and not the end investor. Naturally, resources have been dedicated to improving a firm’s strategy because managers are judged and ranked on performance. In an industry where nanoseconds can make all the difference, hedge funds are focused on improving their technology in order to analyze market information and execute trades a little bit quicker to beat their competitors to market. It is great that managers are focusing on improving returns, but it has left investors “hung out to dry” since it requires them to have their own system or teams in place to analyze the fund managers they invest in and the data they receive.
Historically, investors would receive a statement at the end of the month telling them whether their manager made or lost money, and that was it. With the emergence of hedge fund managed account platforms, the hedge fund space has turned the tables, putting the power and focus on the investor experience. Investors select a platform, not only to access managers, but also to provide them with tools that fund managers aren’t. Platforms are giving investors the functionality to easily handle investing in hedge funds without requiring investors to build out a team or purchase expensive technology to do so. In this day and age, where information is so readily accessible, platforms adapted to meet the investors changing needs and demand for quicker access to information. Investors are no longer satisfied receiving a statement at month-end telling them how the manager performed. Now, at the very least, platforms and fund managers have had to adapt and provide investors with functionality to view their investments on a daily basis. Platforms have looked to take this a step further by providing investors with a more granular look into their hedge fund portfolios. Platform investors are often able to see exposures and positions by manager, view aggregated data across their portfolio, and run advanced analytics on their portfolio.
Platforms will continue to be the driving force behind the advancement of the hedge fund investor experience, allowing hedge funds to continue dedicating resources to refining their strategy and improving returns, without sacrificing at the investor’s expense.