Making The Right Decisions Amidst Market Turmoil

After a challenging 2015 for many, 2016 has proven to be no different for the hedge fund industry.  The first few months of this year have brought even more hardships as hedge funds continue to face decreasing performance, rising redemptions, and loss of key employees.  

Despite these difficult dynamics, hedge fund leaders remain reluctant to retool their businesses.  Almost in any industry, whether it is manufacturing, energy or even the mass financial services behemoths, firms are reworking their organizations.  Insurance, banking, real-estate, and peer-to-peer lending businesses are inventing or adopting new, more innovative business models that create agility, reduce spend, and mitigate operating risk – despite the unfavorable market conditions.  

But why then do hedge fund managers loath to change tactics that could improve their performance and mitigate negative effects on their funds?  Real and perceptual reasons can be summarized as follows:

1.  Fund managers are more comfortable with the preexisting, “proven” approaches even though these no longer serve their business needs.

2.  Fund managers only work with brands that they are familiar with even though these brands may not be the right fit for them anymore.

3.  Fund managers lack superior alternates in the marketplace even though specialized options exist.

It has been proven that hedge fund managers care about mitigating operational risk, but they are certainly open to also reducing operating costs.  This can only be a win-win when the manager and the business have tension around fees.  We see many fund managers even agree that more nimble and robust business models ensure that operating risk is actually lowered, and agility and flexibility are gained.  

Getting from realization to execution is a long road and few actually ever get there.  The fund managers who actually take the risk to partner with forward thinking brands gain smart scale, mitigate operating risk, and minimize cost, creating value for all -- investors, owners and employees.


       JAYESH PUNATER

       JAYESH PUNATER

Jayesh Punater is the founder and CEO of Gravitas and has more than 22 years of experience working in entrepreneurial, high growth companies servicing the financial industry.

Founded in 1996 as a technology consulting firm, Gravitas has been servicing the alternative investment industry as a trusted provider of IT services including infrastructure, cloud hosting and support.  Two decades later, Gravitas has evolved into a fully integrated, cloud-based front and middle office services platform exclusively for hedge funds and asset managers. 

The Gravitas Platform combines people, process and technology to funds achieve operational excellence and smart scale, while reducing risk.  Solutions enabled by The Gravitas Platform include Market Risk, Portfolio Accounting, Reconciliation, Compliance Reporting, Data Warehouse/ Security Master/ Reporting Tools/ Pricing, and Information Technology Services.

Gravitas is headquartered in New York with 275+ employees working out of its five worldwide locations in Chicago, Greenwich (Connecticut), Mumbai and Ahmedabad, and at various client sites.  The firm has cultivated a roster of 80+ client firms that manage over $1.15 trillion in AUM globally. 

Gravitas was most recently named "Best Middle Office Solution" in the HFM US Hedge Fund Services Awards, and "Best Outsourced Solution" in the 2015 HFM US Technology Awards. Past HFM US Hedge Fund Services Awards won by Gravitas include: “Most Innovative Technology Provider” (2014), “Best Outsourced Technology Infrastructure Provider” (2013) and “Best Overall Technology Firm” (2012).