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 âoperational issues account for an alarmingly high proportion of hedge fund failures (50%) and that expanding due diligence and monitoring practices to understand âback officeâ capabilities can make a big difference in preventing or avoiding these failures.[iv]â
âAchieving operational scale and managing a control environment are key contributing factors to being a successful investment manager,â said Joe Trentacosta, Vice President, AQR Capital Management LLC. âOmgeo 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.â
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 want 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: âTo 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 Omgeoâs 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.â
Tim Lind, managing director, strategic planning at Omgeo, will speak on a panel at SIBOS in Vienna, Austria on Thursday, 18 September, titled: âAre Hedge Funds the Root of All Evil?â There he will discuss the virtues of hedge funds and their critical role in generating liquidity in todayâs market.