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Hedge Funds: Facing new challenges

The global financial markets are on the threshold of a new regulatory era. Technology will undoubtedly underpin hedge funds' efforts to comply and compete in this changing environment. But is it better to build tailor-made systems in-house or use a third-party provider of off-the-shelf products?

Attitudes to outsourcing differ across the market, but there are certainly benefits to outsourcing - increased efficiency, reduced costs and specialist expertise, among others - as long as the provider offers a more effective solution. And, of course, it does not have to be all or nothing; modular systems allow hedge funds to pick and choose products for integration with current platforms.

The options are endless for those that wish to outsource some or all of their compliance needs. And, while overall responsibility for compliance will remain with hedge funds, the right outsourcing partner should ease the transition into this new regulatory era, leaving funds to concentrate on the day-to-day business of managing assets.