A study by Beacon Platform Inc. underscores the importance of advanced technology and seamless integration for hedge fund success, with 93% of executives prioritizing system compatibility. Funds with “Excellent” competitiveness had well-integrated systems, correlating with improved risk visibility (60%) and increased risk management budgets (55%).
Recent global research commissioned by Beacon Platform Inc. reveals the growing significance of advanced technology and seamless system integration in hedge funds’ quest to maintain a competitive edge amidst increasing market volatility. The findings underscore the necessity for robust portfolio analytics and risk management systems, as hedge funds navigate complex investment environments.
The research was conducted by Pure Profile on behalf of Beacon Platform Inc. during August 2024. It surveyed 100 senior hedge fund executives across nine regions, representing $901 billion in assets under management.
Asset Tarabayev, Chief Product Officer at Beacon Platform Inc., commented:
“Hedge funds clearly understand that data and systems integration are essential components of both risk visibility and competitive advantage—even if only 1 in 8 think their systems are extremely well integrated.”
Seamless integration: A crucial advantage
The research, conducted across key markets such as the US, UK, Germany, Switzerland, and Asia, highlights the importance of five essential capabilities in risk management systems. Notably, 93% of surveyed executives ranked seamless integration with existing systems as an important or very important factor for competitiveness. This capability includes compatibility with current portfolio and order management tools and the provision of near-real-time data on positions, profit and loss (PnL), and risks.
Following closely, 87% prioritised advanced technical features, including cloud-based architecture for scalability and integrated development environments enabling customisation and proprietary model development.
Competitive importance of portfolio analytics and risk management systems
The study involved 100 senior executives managing a collective $901 billion in assets, assessing the competitiveness of their current systems. However, only 20% of respondents rated their systems’ competitive edge as “Excellent”, pointing to significant room for improvement.
Table 1: Key Aspects of Portfolio Analytics and Risk Management Systems
| Capability | Very Important + Important (%) |
| Seamless integration with existing systems | 93% |
| Advanced technical features | 87% |
| Broad market coverage | 86% |
| Powerful reporting capabilities | 84% |
| Single, extensible platform | 79% |
Integration drives competitive edge and risk visibility
The survey identified a direct correlation between system integration and competitiveness. Among funds with an “Excellent” competitive edge, 50% reported extremely well-integrated systems, compared to just 5% for those rating their systems as “Good.”
Similarly, 60% of funds with excellent risk visibility had extremely well-integrated systems, compared to less than 10% in the “Good” or “Average” categories.
Table 2: Integration and Competitive Edge
| System Integration Level | Competitive Edge Rating (%) |
| Extremely well integrated | Excellent: 50% |
| Good: 5% | |
| Average: 0% |
Table 3: Integration and Risk Visibility
| System Integration Level | Risk Visibility Rating (%) |
| Extremely well integrated | Excellent: 60% |
| Good: 4% | |
| Average: 10% |
Budget Increases Enhance Risk Management and Visibility
The research further revealed that funds rating their systems as excellent were more likely to have significantly increased their risk management budgets over the past two years. 55% of these funds had done so, compared to 13% of those with “Good” systems and only 6% of “Average” systems. This budgetary commitment has led to notable improvements in risk visibility, with 60% of the “Excellent” group reporting dramatic enhancements over the same period.
Table 4: Risk Management Budgets and Competitiveness
| Risk Management Budget Increase | Competitive Edge Rating (%) |
| Increased dramatically | Excellent: 55% |
| Good: 13% | |
| Average: 6% |
Table 5: Visibility Improvements
| Visibility Improvement Level | Competitive Edge Rating (%) |
| Improved dramatically | Excellent: 60% |
| Good: 8% | |
| Average: 6% |
About Beacon Platform Inc.
Beacon Platform Inc. provides cutting-edge technology solutions for hedge funds, enabling them to build, test, and deploy trading and risk applications efficiently. The platform includes cloud-based architecture and integrated tools designed to enhance risk management, streamline analytics, and enable innovative strategies.
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