Streamlining Hedge Fund Operations | Gresham

Introduction

In the dynamic world of hedge funds, operational efficiency and control are paramount for success. This case study delves into the transformative journey of a global hedge fund managing over US$50 billion in assets. Faced with challenges posed by high-volume trading and intricate alternative investment strategies, the hedge fund turned to Gresham’s Control solutions to centralize reconciliation controls. This move not only supported their complex operations but also enhanced efficiency, minimized risks, and optimized time-to-market objectives.

 

The Challenge: Operational Complexity and Legacy Solutions
  1. Inadequate Legacy Platform: The hedge fund relied on a customized reconciliation platform from a legacy vendor that struggled to handle high trading volumes, intricate asset classes, and corporate actions. This translated into significant time, cost, manual effort, lost opportunities, and missed market goals.

  2. Manual Processes: The firm utilized spreadsheets for month-end reconciliations, juggling corporate general ledger balancing, legacy reconciliation solution records, and onboarding results for a new solution. This cumbersome three-way reconciliation process was prone to errors and inefficiencies.

  3. Fixed Data Model Limitations: The existing solution's fixed data model presented challenges when handling different asset classes, requiring manual scrolling to access essential columns. Furthermore, the rigidity of the model necessitated multiple workarounds and compensating controls.

 

The Solution: Gresham’s Control Solutions for Reconciliation

To tackle these challenges, the hedge fund embraced Gresham’s Control solutions, resulting in several significant outcomes:

  1. Enhanced Centralized Control: By adopting Gresham’s Control solutions, the hedge fund gained a centralized reconciliation control platform that effectively managed high trading volumes, intricate asset classes, and complex operations.

  2. Efficiency and Self-Sufficiency: Gresham’s Control empowered the firm to internalize its operations, enabling swift responses to file format changes, additions of new sources, and the incorporation of additional controls.

  3. Flexible Data Model: The solution's flexible data model alleviated the complexity of supporting diverse investment products, allowing the hedge fund to add columns and prime broker pairs as needed.

  4. Streamlined Approval Workflows: Gresham’s Control introduced an approval workflow feature that enhanced matching quality and streamlined the identification of new security pairs not present in the security master.

  5. Cloud-Native Advantage: The solution’s cloud-native framework aligned with the hedge fund's strategic mission, enabling it to add computing capacity on demand (COD) as trading volumes fluctuated.

 

Benefits and Results
  1. Operational Agility: Gresham’s Control solutions enabled the hedge fund to keep pace with the rapid changes inherent in its complex, large-volume business. This ensured reduced risks, lower costs, and minimized manual efforts.

  2. Accelerated Time-to-Market: The solutions supported higher data volumes, new file formats, and controls, allowing the hedge fund to launch new investment strategies swiftly and enhance its trading and operations capabilities.

  3. Enhanced Efficiency: By eliminating manual errors, managing aging exceptions, and enhancing governance over the reconciliation process, the hedge fund boosted efficiency and reduced operational risks.

  4. Cloud Flexibility: Gresham’s cloud-native framework enabled the hedge fund to align with its sophisticated capital and operations infrastructures, offering computing capacity on demand while maintaining SLAs.

 

Conclusion

The transformative journey of this global hedge fund exemplifies the power of embracing innovative solutions to address operational challenges. Gresham’s Control solutions not only centralize reconciliation controls but also empower the hedge fund to navigate high-volume trading and intricate alternative investment strategies. By streamlining operations, enhancing efficiency, and optimizing time-to-market goals, Gresham’s partnership proves invaluable in the dynamic world of hedge fund operations.

Discover how Gresham’s Control solutions are driving operational excellence in financial institutions worldwide. Contact us today to embark on a transformative journey.


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