The Importance of Hedge Fund Outsourcing

Financial services executives are increasingly turning towards hedge fund outsourcing as a means of increasing their bottom line and improving their return on investment. Outsourcing can provide access to specialized expertise in areas such as operational functions, risk management, asset allocation, strategic investments, and overall fund performance optimization. 

Not only does outsourcing allow for an improved commercial offering, but it can also help facilitate scalability for firms that are looking to grow their asset management capabilities. This blog post will explore why more financial services organizations are relying on outsourcing for financial services solutions to improve efficiency and bolster the stability of their operations.

Why Outsource Hedge Fund Operations?

Outsourcing hedge fund operations can be extremely beneficial due to the highly competitive nature of hedge funds and the added pressure of performance that comes with it. Many hedge fund managers face issues such as operational functions, transparency, compliance, and risk management, which can be improved by outsourcing operations.

Business Process Outsourcing (BPO) companies are equipped with a variety of models and strategies driven by excellent talent with experience in the field, which often help increase operational excellence. In addition, they can ensure day-to-day operational requirements and QA services within the scope of activities, reducing workloads and freeing up time for more strategic advantages and asset management solutions. 

What Hedge Fund Operations Can Be Outsourced?

Hedge funds require excellent financial management services in order to stay competitive, and outsourcing certain operations can be a great way to maximize efficiency. These services often include:

• Trade and Position Reconciliation: This process involves verifying transactions have taken place and tracking changes in positions across multiple accounts. When seeking a suitable provider for this service, it’s important to assess them against criteria such as the tools available for portfolio management, performance reporting, security protocols, client onboarding experience, and timelines for reconciliations. 
• Financial Analytics: BPO solutions providers can help by providing expert advice on markets, trends, and strategies. The ability to work with multiple teams at once is another benefit of this approach, allowing organizations to be more agile when making decisions. Regardless of the size or purpose of the hedge fund, outsourcing financial analytics can provide invaluable insights that lead to success in today’s competitive marketplace.
• Financial and Management Reports: Oftentimes, hedge funds need to outsource the function of completing financial and management reports in order to be able to comply with relevant laws and regulations. With this task, accuracy is key, as these reports are sent off for review by governing bodies that provide additional oversight. To ensure accurate results, it is important to work with experienced professionals that understand the intricacies of the industry and can prepare the reports according to different standards. 
• Fund Administration and Accounting: An experienced partner in this space can provide you with the support needed to efficiently manage investor accounts, trade settlements, reconciliations, regulatory compliance, and more. Working with these experienced professionals can also free up staff time to focus on more strategic activities that will help drive the organization forward.
• Shareholder Servicing: Shareholder servicing is a resource-intensive activity with complex functions. Investors are increasingly demanding an efficient and streamlined back-office infrastructure to ensure optimal client satisfaction. It includes taking requests from shareholders, making recommendations to improve these functions, and ensuring compliance with anti-money laundering regulations. To bolster investor relations and create a competitive edge in the markets, many hedge funds are looking to outsource their shareholder servicing functions.
• Risk Management: A key part of this process is setting out expectations from the beginning in regard to performance metrics and a timeline for any projects. Outsourcing also allows for flexibility, with assistance tailored to specific needs, ensuring only what is necessary is used as input toward decision-making. Crucially, it can help mitigate risk while finding opportunities and uncovering efficient strategies – key elements in successful hedge fund services.

By enlisting asset management services from external financial institutions, hedge funds are able to focus their resources on the financial instruments themselves while still having access to cutting-edge technology. In addition, outsourcing these tasks allows hedge funds more flexibility in their financial decisions as they gain financial expertise from industry professionals.

How Can a BPO Partner Help a Hedge Fund Achieve Its Goals and Objectives?

Leveraging integrated People, Process, Technology, and Security (PPTS) framework, a proven BPO partner empowers financial service providers with access to financial analytics and financial and management reports while providing deeper insights into their data. Through integration, extraction, transformation, and preparation of client data, advanced analytics dashboards can be generated, helping businesses to make better decisions faster. 

Additionally, AWS partnership or infrastructure provides an added layer of security while scalability brings major cost savings to financial institutions when partnered with a credible BPO partner. Infinit-O’s AI-powered Infinit-Intelligence platform provides custom-built financial services solutions that are tailored to the needs of financial services firms and incorporate all these benefits.

BPO services are invaluable when it comes to launching an offshore hedge fund. Having someone who knows how to launch an offshore hedge fund in the country’s legal system allows for a smoother, faster, and more successful setup of operations.

Infinit-O partners with the world’s fastest-growing technology, financial, and healthcare services companies that want to scale and advance their brands. Demonstrated by our world-class Net Promoter Score of 71, we deliver the highest quality outsourcing services using our unique data-driven approach – combining powerful technology and high-performance teams within our highly-engaged and agile culture. Our expertise includes CX, back office, sales, data science, and engineering services. Learn more about how you can leverage the benefits by offshoring your tasks too.