Cost Reducing Strategies for Hedge Funds

Strategies for Optimizing Operations and Reducing Costs

Six Ways to Reduce Costs
Virtualization
Smart Purchasing
Market Data
Telecommunications
Broker Execution Costs
Disaster Recovery andData Protection

1. Virtualization
Combine multiple servers
Increases floor space
Reduces power/cooling expenses and hardware/software costs
VMware: leading provider of virtualization technology
Save 23 – 48% on hardware and systems integration and 40 – 72% on operational costs

2. Smart Purchasing
Purchase multi-year software licensing
Such as anti-virus and backup software
Purchase hardware in bulk
Take advantage of vendor relationships
Rebates and special incentives
Evaluate functionality of all hardware and software

3. Market Data
Evaluate user needs and functionality
Consider alternative market data providers
For example: Thomson Reuter’s Market Data System (RMDS) instead of Bloomberg

4. Telecommunications
Ask your technology provider to identify areas for cost-savings
Consider WAN Optimization or similar technology solutions

5. Reduce Broker Execution Costs
Research various brokers for cost differentials and conduct a cost-benefit analysis
Agency desks are typically much less expensive and broker neutral, which enables firms to find value and lower execution costs, as well as divert more share/value to these agency desks to help reduce costs.
Negotiate a lower soft dollar cost for research payments to help reduce overall execution costs through discounted research costs.
Leverage DMA platforms and algorithm tools, which are typically associated with lower per share trade cost and better execution.

6. Disaster Recovery and Data Protection
Consider taking a phased approach to data protection
Evaluate critical business areas first and consider eliminating DR capabilities from less critical applications

Online Resources
For more information, please visit the following resources:
Eze Castle Integration Knowledge Center: http://www.eci.com/knowledge-center/index.html
Eze Castle Integration Communications Approach: http://www.eci.com/solutions/communications
Follow Eze Castle Integration on Twitter at: http://www.twitter.com/ezecastleECI

One Federal Street, 9th Floor Boston, MA 02110 Tel: 617.217.3000 www.eci.com

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Cost Reducing Strategies for Hedge Funds

by Eze Castle Integration on Jul 29, 2010

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