New York $2 Billion long/short equity fund

Overview

This established multi-billion dollar (AUM) New York City hedge fund needed a real-time trading support and risk analysis system to manage its investment activities. They chose Delta’s Hedge Fund Reporting System to create a customized solution to meet its unique requirements.

The Challenge

The fund has a long/short equities focus but also invests in a number of different asset types. The firm was formed with a strong research and trading basis, so the decision-support platform had to reflect that dynamic perspective.

Core requirements included consolidating data from a number of disparate sources (prime broker, trading system, market data, third-party market data, etc.), performing calculations on various datasets, and presenting the output in an appealing, constantly updating interface. The system was implemented well into the firm’s tenure, so had to be integrated with and validated against several existing systems.

The Solution

Delta Hedge implemented its Hedge Fund Reporting System, a browser-based intranet solution that provides real-time reporting on exposure, P&L, trading trends, compliance, liquidity, and AIMR-compliant performance by sector, analyst, etc. The system was customized to also address emerging compliance issues by tracking trade execution relative to VWAP per broker and by managing the firm’s internal broker ratings. Further, it provides for detailed hedge allocations and also allows what-if analysis to determine the impact of stock index changes and volatility changes on P&L and exposure

Multiple data sources feed a single database which in turn provides streaming data to the intranet system. Exposure, P&L and positions are provided within client-defined categories on a continuously updated basis. An automated sub-system constantly monitors feeds from those external systems and reports on data anomalies.

Chief Financial Officer

“Based on our investment success and growth in assets, we wanted to upgrade the Excel-based exposure and P&L reporting system that our prime broker had provided us. Delta Hedge Systems designed and implemented a significantly more robust, real-time, web-based system that took us beyond what we thought possible, streamlining our operations by providing real-time reports and eliminating many manual processes.”

Head Trader

“Delta Hedge’s system includes the real-time trading, exposure, compliance, risk and market reporting we couldn’t obtain from our trading system. It also provides real-time reports that had either taken hours to compile manually ourselves or which we couldn’t produce at all.”