… in seizing emerging opportunities

The 10th annual HedgeNews Africa Symposium, which took place on February 21 in Cape Town, showed why Africa is one of the world’s most dynamic and exciting investment markets.

It was great to see so many existing clients and new faces at the event, and to hear about the key issues they face. The overwhelming message was of enormous opportunities … along with some sizable challenges!

Technology dominates discussions
The biggest theme that kept on emerging from the sessions and our conversations with attendees is technology’s impact on hedge funds. And this interplay between technology and the investment management lifecycle is affecting not just managers, but investors and regulators alike.

For hedge fund managers, technology is increasingly central to their value proposition, and ability to achieve a competitive advantage.

We’ve seen it with the rise of the quantitative shops in recent years. And the rapid developments we’re seeing in artificial intelligence/machine learning and big data suggest the technology arms race has a long way to go. The clear consensus from the conference though was that technology coupled with good fund managers is what will deliver results.

Technology is not just helping produce winners in the front office either. The strength of a firm’s middle- and back-office operations can be as important in enhancing profitability and attracting assets—especially as investors ramp up their operational due diligence.

Technology winners and losers
Of course, technology deployments have consequences. One of the issues raised at the Symposium was the impact on employees as systems replace manual processes. In response, some companies discussed how they’re investing in training staff in the new technologies to prepare them for the transition.

And clearly this transition towards greater automation will only accelerate. The competitive advantages in terms of lower costs, reduced error rates, greater accuracy and speed, and enhanced insights ensure that.

These trends are already well developed in North America, Europe and some Asia-Pacific markets, and increasingly we are seeing them take hold across Africa.

Automating key hedge fund processes
For us, attendees’ focus on introducing more automation was evident from the interest shown in our Advent Genesis platform. Genesis transforms the trade order creation process, enabling portfolio managers to manage models, rebalance accounts, manage portfolio “drift,” and adjust strategies for a large number of client accounts quickly and efficiently.

Another hot topic was our industry-leading Geneva® system, which delivers similar automation and efficiency benefits across users’ portfolio management and fund accounting activities.

As a true multicurrency and multi-asset class platform, Geneva® supports complex investment strategies across international markets, and can manage myriad fund, entity and legal structures—empowering users with real-time performance, P&L, position and exposure information, along with the tools to accurately shadow their fund administrator.

The alternative model for accessing technology
But while automation brings undoubted advantages, it often requires substantial investment. And many of the smaller asset managers that exist in Africa typically don’t have the resources to support a sophisticated technology infrastructure … or the desire and expertise to own and run it.

Which is why the new generation of cloud-delivered software and managed services—like our Advent Outsourcing Services—are coming to the fore. We believe outsourcing is the future for Africa’s hedge fund industry, giving firms fast and affordable access to the systems and support they need to succeed in today’s world of emerging opportunities.