Developing DevOps as you transition to the cloud

cloudclimbDevOps. One of those industry terms floating around the web just as “the consumerization of IT” or “BYOD” did a few years ago. But what does it really mean and how will it evolve like these other great tech trends?

Advent CTO, Todd Gottula, discussed the trend with Wall Street & Technology in a recent article, “Transition Faster to the Cloud with DevOps”. In this article, Todd talks about how the cloud has introduced the ability for developers to rapidly create scalable and flexible environments.

As a marriage of “development” and “operations,” the DevOps trend has actually been in and around software development circles for some time. But the reason DevOps has recently been gaining momentum is an attitude shift across the software industry to operate in real time – a mindset referred to as continuous delivery. Pressure is mounting to increase the frequency of new enhancements and features, and developers are expected to deliver quality code on a shorter release cycle.

Todd also shares that while continuous delivery and DevOps are not one and the same, DevOps feeds into the continuous delivery mentality of reducing inefficiencies and risks, and creating a delivery pipeline that takes into account both software build and infrastructure.

For Advent, DevOps plays a key role in streamlining the delivery of working software. What’s not to love? If you’re looking for more on DevOps, check out the full article on Wall Street &Technology.

Since joining Advent earlier this year, Kendall has leveraged her passion for writing along with her background working with enterprise cloud technologies to strengthen Advent’s external communications.

Posted in Advent Software, Trends

Warning – The Lack of IT Board Representation Could Be Seriously Damaging Your Health

Danger

Over the space of more than ten years with Advent EMEA, I’ve had the opportunity to talk to a lot of wealth managers. Time and time again I run into people who say that IT infrastructure plays a pivotal role in their firm’s growth and profitability, yet not all of them have a Chief Technology Officer (CTO) or equivalent sitting on the board.

When I see lack of representation at the table, I see risk. In particular:

i)  Regulation/compliance – Two-thirds of the wealth managers surveyed in the recent 2014 Technology and Operations Trends Report[1] expect the pace and impact of regulatory change to increase over the next three years, further exacerbating the need to rapidly revise models and operations to cope with the reforms. Without a CTO on the board, firms risk missing out on ideas for leveragingtechnology to better support their regulatory reporting requirements.

ii) Cost control – The growing compliance burden, intensifying market competition, and profitability pressures turn cost control into a priority. Given more than half of a typical wealth manager’s costs are related to technology, I believe it’s vital firms have expert board-level input on how they can implement a more strategic and optimised approach to IT that enhances efficiency and productivity, and enables employees to provide a more professional service to clients.

iii) Client experience – High net worth individuals have on average over three banking relationships. Competition is fierce among financial firms, and the client experience wealth managers provide is being constantly compared against their peers. Technology is a key competitive differentiator, so it’s imperative firms identify ways to maximise the advantages it can bring.

As the 2014 Technology and Operations Trends Report pointed out: “At a time when tech-led models are gaining ground across markets and wealth is in younger hands than ever, digital is rap­idly becoming the differentiator.”

Yet, for instance, less than half of UK firms currently use tablets in client meetings. Meanwhile, client reporting remains an acknowledged area of weakness at many firms.

Say an advisor were able to bring a tablet to their next client meeting, and generate relevant and intelligible custom reports with real-time portfolio and performance data, I’m confident the result would be more satisfied clients with a clearer sense of the value they receive. A board-level CTO would be better positioned to advocate for these sorts of technology improvements.

iv) Strategic direction – Wealth managers need a rigorous IT strategy and a clear understanding of what technology solutions are available if they are to plan for and make investments that can support their future business growth. Experience has taught me that without the expert input of a CTO, boards risk taking sub-optimal decisions that could lead to a loss of competitive edge and profitability underperformance.

According to the Technology and Operations Trends Report, almost 90% of the wealth managers believe technology could play a greater role. To me, the opportunities are evident and alluring: a reduced risk of regulatory censure, a more productive advisor force, an enhanced client experience … provided firms implement the right solutions, and leverage the capabilities effectively.

Furthermore, innovation is gathering pace. If organizations fail to make astute technology investments they will quickly lose out in the battle to win and retain business .

With so much at stake, doesn’t it make sense for the firm’s senior IT expert to have a voice at the board table?

[1]2014 Technology and Operations Trends Report, produced by WealthBriefing/Weatherill Executive Consulting in associa­tion with Advent.

Martin Engdal is Market Strategist and Director of Solution Marketing at Advent EMEA. In this role, he has responsibility for strategic positioning of Advent’s solutions in EMEA and for driving Business Development efforts in Europe, Middle East and Africa.

Posted in Advent Software, Risk, Trends

Toss the Magic Lamp—High-Frequency Trading is Here to Stay

lampHigh frequency trading—both its successes and failures—seem to be weighing heavily on the minds of many investors. I know at AdventConnect last month I had quite a few discussions on this topic. I fielded a ton of questions about preparing for future changes, such as enhanced technology and the predictable expansion of oversight, as many of our clients wonder how high frequency trading could impact their firms.

As history has proved, once the technology genie has escaped, it is here to stay, and high-frequency trading (HFT) is no exception. So, wherever you sit in the financial world—trader, investor, or regulator—get ready to make your three wishes for the future, but before you do, there’s some things you should consider about the infamous (or highly regarded?) practice. “You can’t put the genie back in the lamp.” Tim Sargent, CEO of Naperville, IL- based Quantitative Services Group, made this all too accurate statement about the practice of HFT.

At a very basic level, HFT is automated trading used by large investment banks to manage and fulfill thousands of trade orders via complex algorithms at extremely high speeds. High-frequency traders (HFTs) are power players of the marketplace, and the practice has become increasingly accepted, but it is nonetheless regularly surrounded by controversy.

Here is a brief snapshot of the ongoing debate between HFT advocates and outspoken critics.

Yay-ers:

  • HFT firms arbitrage price disparities, reducing transaction costs, and narrowing the spread between bid and asking prices for securities
  • HFT provides additional liquidity to markets
  • HFT boosts “informativeness” of quotes

Naysayers:

  • HFT can increase volatility in markets due to “panic selling”
  • HFTs can manipulate prices via “spoofing” and “layering,” amongst other unethical tactics
  • HFT firms realize an unfair advantage over average investors, creating two financial markets and allowing front-running of other investors’ trades

Regulators have tried to curb potentially detrimental effects of HFT by proposing solutions to ensure accuracy such as: SEC-assigned ID codes, tax on stock and bond trades, and charging for market intelligence that only HFTs can access. However, critics of tax imposition cite that taxing HFTs would slow the process and render the practice virtually uneconomical.

So, are you wishing for more human reason? Less regulation? Trading in nanoseconds? The tech genie awaits your requests.

For more information about the debate surrounding high-frequency trading, take a look at, High-Frequency Trading: useful tool for liquidity or weapon of mass destruction? or, if you’re a client, join the conversation on Advent Direct Community.

If you’d like to talk about the impacts of HFT at your firm, shoot me an email at Aaron.Adolphson@advent.com.

Aaron Adolphson joined Advent in 2004 as part of the services organization. He is currently a Global Solutions Manager specializing in Trade Order Management, Connectivity, and Rebalancing.

Posted in Advent Software, Trading, Trends

Welcome to the New Regulatory Regime: ’40 Act Funds for Hedge Fund Managers

WelcomeLiquid alternatives – and registered ’40 Act mutual funds in particular – are heating up in the hedge fund sector, and it’s not hard to see why.

Investors want quicker access to their investment, and hedge fund managers want in on the USD$15 Trillion mutual fund market. Data from Preqin finds 22 percent of fund managers say they offer alternative mutual funds to their clients, and 11 percent plan to introduce them to their product line-up in the next year.

Most of us understand the growing appeal of instant access to investors, particularly after the recession. What’s more is we’re seeing retail and institutional investors seeking increased exposure to alternatives. All of this has amounted to a surge of investor interest in liquid alternatives. In July 2014, Preqin found that 35 percent of investors currently have an allocation to liquid alts (including UCITS-compliant hedge funds), with another 16 percent willing to consider these funds in the future.

For you, the hedge fund managers, it would seem like an easy decision to start attracting capital in the mutual fund space. However, going the ‘40 Act route means hedge funds need to subscribe to a whole new host of regulations on top of  the basics like Form PF and Dodd-Frank. You’ll be required to report daily NAV and portfolio performance, and maintain 85 percent of portfolios as liquid assets. For most hedge fund managers, these rules and requirements will be brand new.

They might feel a little daunting, but as much as it creates a burden on our end, investors really appreciate the increased transparency and regulation that applies to ’40 act structures. So when creating a ‘40 Act fund, remember this:

  • You’ll be required to work with a range of partners: a dedicated custodian, a fund administrator, an independent board of directors, a prime broker, an independent transfer agent, an investor services provider, and possibly more.
  • Every single party needs to be compliant with ’40 Act restrictions and the usual regulations affecting hedge funds.

Compliance is probably posing the greatest challenge to introducing liquid alternative structures, but fortunately hedge funds don’t need to navigate it alone. Partnering with a third-party technology provider can help managers run a regulated vehicle and stay within compliance guidelines. To learn more about solutions for simplifying compliance for liquid alternatives, check out this Hedgeweek US Fund Services 2014 Report.

Martin Sreba has been with Advent since 2000, holding a variety of senior roles in product services and sales. Currently he is a Principal in the Global Accounts Sales Organization.

Posted in Advent Software, Compliance, Hedge Funds

Eight signs you’ve outgrown your portfolio management system

8It’s 1990—you throw on your aviators and jump into your red and blacked striped Camaro. Passer-byers gawk with jealousy, and it does everything you want and more. Skip to 2014—there’s some glitches in the system, the paint is chipping, and the six-point turn just isn’t cutting it anymore. Time is no longer in your favor and generations of new and improved models have taken over the roads.

It’s time for an upgrade, but you’re not alone.

The pace of change with regard to how investment management professionals conduct business has moved extremely fast since the financial crisis. These changes have kept investment managers on their toes and, along with a general lack of trust in financial markets, have contributed to a challenging growth environment. The good news is that we are now seeing real signs of a breakthrough when it comes to growth.

Boston Consulting Group reported this summer in its annual worldwide study of the asset management industry that the asset management industry has now had two consecutive years of solid growth with 2013 marking its strongest year since the financial crisis.

Behind this period of emerging growth are a number of factors like the introduction of new asset classes and strategies, geographic expansion, and new sources of capital inflow. BCG also points to a more demanding class of investors with a growing preference for nontraditional assets.

This is exciting news for the industry, but no doubt, new sources of growth bring new challenges of their own like the need for increased investor due diligence and for a scalable, flexible infrastructure to facilitate growth and change without disruption to the investment manager’s day-to-day operations.

For those feeling the impact and challenges of growth, check out this webinar I recently led to help identify whether you’ve outgrown your portfolio system. We’ll walk through eight signs to determine if you’re getting what you need from your current systems to keep and are well positioned to keep your business on track for growth.

If you have a hunch you’ve outgrown your portfolio management system, ask yourself these questions:

  1. Are you able to support all instruments, asset classes and currencies that the Portfolio Manager wants to adopt?
  2. Are you able to fully shadow your NAV to your Fund Administrator?
  3. Does client reporting deliver on the frequency, transparency and depth that your investors demand?
  4. Do you have real-time data access and management?

Did you answer no to the first 4 signs that you’ve outgrown your portfolio management system? It may be time to trade in that 1990 Camaro.

Tune in to hear the final four signs, and how you can overcome challenges and regulations for future growth of your business.

Marvin is a solutions consultant at Advent Software with responsibility for presales consulting and solution development for Advent’s fund accounting platform Geneva. His primary focus is to provide a functional and technical consultative support for both hedge funds and service provider firms.

Posted in Advent Software

Recent Tweets

Meet Advent’s Leadership


Authors

Categories

Subscribe

Archives

Contact

If you have questions or would like to submit a topic you would like for us to consider covering, email us at social@advent.com.