Omgeo Demonstrates Significant Momentum in Hedge Fund Operations ArenaOmgeo announced this month that it now has more than 200 hedge fund clients, including what company officials call “the majority of the Top 10 hedge fund firms” across the globe. The post-trade company receives much of its hedge fund traffic from fund administration and prime brokerage, as well as client referrals.
The penetration of Omgeo solutions into the hedge fund community has been phenomenal over the past several years, reflecting the changing needs of hedge fund managers as they expand and grow. In fact, in an industry whitepaper published by CAPCO, analysis found that “operational issues account for an alarmingly high proportion of hedge fund failures (50%) and that expanding due diligence and monitoring practices to understand ‘back office’ capabilities can make a big difference in preventing or avoiding these failures.”
“Achieving operational scale and managing a control environment are key contributing factors to being a successful investment manager,” said Joe Trentacosta, Vice President, AQR Capital Management LLC. “Omgeo offers a platform which incorporates industry standards and scalable processes which allows us to effectively deal with multiple counterparts and varying amounts of trading volume in a seamless and efficient manner.”
The firm also generates a significant amount of its hedge fund clients through prime broker referrals and provides its solutions to fund administrators, who rely on automation via Omgeo to achieve operational stability on behalf of their hedge fund clients. Additionally, the hedge fund community finds the relationships Omgeo has with technology partners including Advent, Beauchamp Financial Technology, BLOOMBERG AIM, Charles River Development, Eze Castle Software, Sophis and Tradar to be instrumental in automating their post-trade processing needs.
Additionally, as hedge funds grow in size, many have moved to adopt multi-prime-broker relationships and increasingly want to manage relationships between prime brokers and executing brokers as direct customers of Omgeo. Omgeo allows for the pre-confirmation of trade details on trade date, which provides assurance that the data being sent from an order management system to a prime broker has already been confirmed by the executing broker. This streamlined process means less checking of details, and therefore, fewer errors attributed to manual processes.
Tim Lind, managing director, strategic planning at Omgeo, will speak on a panel at SIBOS in Vienna, Austria on Thursday, 18 September, titled: “Are Hedge Funds the Root of All Evil?”