Installing the hardware and software to run a hedge fund
operation is one of the most expensive parts of the start-up
process. It is also one of the areas that managers may know
least about. Any temptation to cut corners should be
strenuously resisted. Time and time again this proves to be a
A successful hedge fund group will need everything from
automated back-ups to reliable data communications with prime
brokers and administrators, a front-end trading platform and
portfolio management tools.
Get any one of these items wrong and it will either create
an enormous nuisance or seriously endanger the business, as
trades go astray and managers lose track of their portfolio on
a minute-by-minute basis.
Of course, this doesn't mean that hedge fund companies can't
get off the ground with Excel spreadsheets and a couple of PCs.
They can and have. However, this approach reduces the