Cloud-based Hedge Funds Report Gains in Efficiency and Data Security but Struggle with Data Unification

Cloud-based Hedge Funds Report Gains in Efficiency and Data Security but Struggle with Data Unification

New Enfusion research finds hedge funds experience steady headcount, enhanced data security and boost in overall efficiency after migrating to the cloud

Enfusion, a leading global provider of investment management technology solutions and services, released a report that reveals hedge fund managers are growing more comfortable with moving data to the cloud in order to enhance operational value, but find data management their greatest challenge as well as their top spending priority for the year ahead.

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At a time when cloud adoption is accelerating across the financial services industry, Enfusion’s in-depth survey of 56 hedge funds managers uncovers the state of cloud in the industry, managers’ system preferences and hosting decisions, data management challenges, as well as the lessons traditional asset managers can learn from cloud-based hedge funds.

“The shift in acceptance and adoption of cloud-based technology marks an inflection point for the industry as investment management firms of all sizes adapt to the digital working world,” said Thomas Kim, CEO of Enfusion. “This research reinforces what we’ve known at Enfusion for years, that having a strong data fabric and unified, integrated infrastructure hosted natively in the cloud leads to cost savings, enhanced data management, and better performance through operational efficiency.”

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State of the Cloud

Hedge fund managers that are fully or partially using cloud unanimously reported improvements in operational efficiency with 96% stating they have maintained the same level of operational staffing post-migration and none have reduced headcount. Fully and partially cloud-based managers (72% and 50%) also said migration to the cloud improved data security, and two-thirds of the fully cloud-based firms report improvements in cybersecurity as well as better protection of their intellectual property.

Despite expressed security benefits, the majority (81%) of hedge fund managers operating a predominantly on-prem infrastructure say concerns over data security hold them back from full cloud migration, while legacy systems are the second most commonly cited reason among on-prem and hybrid (partially cloud-based) managers as the biggest roadblock.

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