Founded in 1996 as a technology consulting firm for the financial services industry, Gravitas Technology Services, LLC (“Gravitas”) was launched by Jayesh Punater on Manhattan’s Upper East Side.
Two decades later, Gravitas has launched The Gravitas Platform, a fully integrated front and middle office services platform exclusively for hedge funds and asset managers. With key clients including large Goldman Sachs and Soros spinoffs, the firm has cultivated a roster of 80+ client firms that manage over $1.15 trillion in AUM globally.
Looking ahead to the next decade, Gravitas’ vision of the future for hedge funds is based upon a new operating model known as The Gravitas Platform. Gravitas predicts the industry is moving toward a scalable, redundant infrastructure that gives every fund complete control of its data. Within this model there will be two key service providers: an administrator for the official books and records and a middle office solutions platform that both performs checks to the administrator and enables increased portability and ownership of data for portfolio managers.
from the beginning
In the late 90s, Gravitas gained traction as an IT services provider to the financial services industry with clients in New York, San Francisco and London. In the early 2000s, after the dot com bust, the firm seized the opportunity to target the largely untapped market of the alternative investment industry. Winning the mandate to manage IT infrastructure for the largest hedge fund launch in industry history, Gravitas quickly gained momentum in the larger hedge fund community. It soon became the leading provider for bespoke IT, cloud and support services.
Post 2008, Gravitas was in high demand as certain market trends formed new pressures, needs and opportunities for hedge funds.
- The alternative industry experienced a tremendous tailwind in 2013 with assets reaching almost $8 trillion and expected to grow to almost $14 trillion by 2020.
- The investor mix shifted from high net worth individuals to institutional investors who raised demands for increased transparency, risk controls and fees.
- Regulation increased as a result of Dodd-Frank, AIFMD, FSA and other legislative changes.
In this new landscape, hedge funds began to face both large growth opportunities and increased operational demands. Mounting pressures were placed on funds’ Presidents, COOs, CTOs, CROs and marketing teams to create scalable and agile organizations while minimizing operational risk. The old model of building and hiring in-house was no longer sufficient in creating the agility necessary to leverage these new opportunities. Further, the idea of outsourcing office functions was unappealing for fear of losing control and customization.
To tackle these operational needs and mitigate risk, Gravitas partnered with a $40 billion hedge fund client in 2009 to develop a new approach. The result was the beginnings of The Gravitas Platform, at the time known as Collaborative Outsourcing. Gravitas’ technology enabled services solution integrates people, process and technology to deliver control with personal partnership and smart scale. Gravitas launched this first engagement providing risk services, which has since grown to incorporate middle office services. This initial project was the catalyst in identifying a real market need for this new way of working. Thereafter, Gravitas went to market as a pioneer in offering technology enabled outsourced solutions, providing reliable, cost-effective and agile solutions to the hedge fund industry.
While Gravitas has seen various models within the industry over the last few years from employee lift outs to full co-admin engagements, the firm believes that funds need to be innovative in finding an operational model that leverages technology but also has a flexible support structure to meet their growth trajectory while reducing risk.
Growing and innovating alongside the industry, Gravitas officially launched its technology enabled services solution, The Gravitas Platform, this year. With the acquisition of a leading front and middle office technology platform from a prominent hedge fund in 2014, Gravitas enhanced its collaborative outsourcing model by deploying the cloud-based technology platform to support its people and processes in front and middle office functionalities. From market risk, performance attribution, portfolio analytics to middle office services, Gravitas helps hedge funds become operationally agile and achieve scale, the smart way.
Answering client demands, The Gravitas Platform now gives funds the advantage of one centralized data set while also providing the proprietary control and customization that funds require. Gravitas’ in-house platform development team ensures that the platform capabilities are constantly enhanced to meet evolving market needs and to allow funds to stay ahead of the competition. The Gravitas Platform services offering leverages the cloud-based front and middle office technology platform alongside dedicated onsite and offsite teams, equipped with processes and workflows. This allows hedge funds to focus on alpha generating activities, gaining efficiency and mitigating risk, without sacrificing control.
As Gravitas prepares for the next decade, the firm envisions the hedge fund of the future to have two key partners: the fund administrator and a middle office services platform like Gravitas.