Challenges Faced by Hedge Funds Moving to a Multi-Prime Environment: Tradar Releases White Paper

27 January 2009

Tradar, a leading provider of software to the hedge fund industry, today announced the release of a white paper aimed at guiding hedge fund managers through the operational and technological challenges associated with going multi-prime. The Tradar white paper, “Facing the Challenges Series: The Multi-Prime Brokerage Environment”, also explores the ways in which Tradar Insight, a sophisticated portfolio management and accounting platform developed specifically for hedge funds, supports funds moving to a multi-prime broker environment. The white paper can be downloaded from the Tradar website

Traditionally, the use of multiple prime brokers has been the preserve of larger hedge funds. In recent months, growing numbers of firms have shown interest in the multi-prime approach, both as a means of mitigating risk and of taking advantage of the specialist services offered by different prime brokers. For funds looking to establish relationships with several prime brokers, a number of operational and technological hurdles exist. Amongst the most significant is the need to aggregate data from disparate sources into a centralized reporting system, while other operational challenges include the reconciliation of trades and the identification of exceptions between the fund’s trade records and those of its prime brokers. From a technical perspective, establishing and maintaining connectivity with several prime brokers, all of which may use considerably differing IT systems, also represents a challenge. Devised in response to the increasing number of queries from hedge funds looking to explore the multi-prime option, the Tradar white paper guides funds through the transitioning process, taking a look at the operational and technological barriers faced by firms moving from the single to the multi-prime environment.

Tony Swei, CEO, Tradar, commented:

“Multi-prime was once very much the territory of the larger firms, but we’re now seeing managers of all sizes looking to extend their relationships with prime brokers. Tradar recognizes the difficulties faced by funds going multi-prime and the white paper is aimed at guiding firms through the process.”

He added:

“Via Insight, Tradar also provides investment managers with an easy-to-implement, cost-effective route to managing and maintaining multiple prime broker relationships. Insight enables firms – whether smaller funds with limited budgets or larger managers looking to keep overheads down – to take on extra prime brokers without significantly increasing operating headcount and driving up costs.”

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