Realizing Efficiencies with Order & Portfolio Management

Executive Summary

We partnered with a multistrategy hedge fund specializing in complex and multiasset investment strategies using derivatives, equities, and other securities. Our goal was to address operational challenges related to manual processes in their order and portfolio management system. We developed a customized one-window web interface that streamlined communication, automated processes, and integrated external systems, resulting in improved efficiency and better management of trades and financial statements.

Client Background

The client is a multistrategy hedge fund specializing in complex and multiasset investment strategies using derivatives, equities, and other securities. Despite advances in automation, they relied on manual processes for managing trades and communicating with external counterparties, such as their custodian bank. This manual approach made their operations slow, error-prone, and inefficient.

Problem Statement

The client faced operational challenges in their order and portfolio management system, which impacted their ability to manage day-to-day trades, communicate with external counterparties, and maintain accurate Profit and Loss statements.

Objectives

Our objectives were to:

1. Streamline the client’s order and portfolio management system.
2. Automate communication and integration with external counterparties, such as the custodian bank.
3. Improve efficiency in managing trades and financial statements.

Approach

We designed and implemented a customized one-window web interface for the client’s order and portfolio management system. This new system centralized trade information and automated communication and integration with external systems, including the client’s primary bank.

Key Findings

Manual processes, such as updating Excel sheets and manually checking Profit and Loss statements, were slowing down the client’s operations and causing errors. Integrating the client’s system with external counterparties, like the custodian bank, was also challenging and time-consuming.

Recommendations

We recommended the following actions:

1. Develop a customized one-window web interface for the client’s order and portfolio management system.
2. Automate communication and integration with external counterparties.
3. Train employees on using the new system to maximize its benefits.

Implementation

We developed and implemented the customized one-window web interface, which streamlined communication, automated processes, and integrated external systems. The client’s employees were trained on using the new system to ensure a smooth transition.

Technology Stack

We used the following technologies for the implementation:

1. Node.js for backend development: Node.js is a JavaScript runtime built on Chrome’s V8 engine, which allows us to build server-side applications using JavaScript. This enabled faster and more efficient development due to its event-driven, non-blocking I/O model and vast ecosystem of libraries and modules.
2. Serverless architecture and deployment: Serverless architecture is a cloud computing execution model that abstracts away server management and automatically allocates resources based on demand. This allowed our team to focus on writing code and deploying it without worrying about managing and scaling the underlying infrastructure, reducing operational costs and complexity.
3. DynamoDB for database management: DynamoDB is a managed NoSQL database service provided by AWS, which offers fast and consistent performance with seamless scalability. We chose DynamoDB for its ability to handle large amounts of data, high read and write throughput, and low-latency responses, making it an ideal choice for our client’s requirements.
4. React.js and Redux for frontend development: React.js is a popular JavaScript library for building user interfaces, while Redux is a state management library that works well with React. We used these technologies to create a fast, responsive, and scalable frontend application that provided an intuitive user experience for the client’s employees.

Results

The new order and portfolio management system improved the client’s efficiency, allowing them to better manage their trades, Profit and Loss statements, and cross-check with accounting systems. Communication with external counterparties became more timely and accurate, reducing errors and enhancing overall operational efficiency.

• Trade Management Efficiency: Reduced trade entry and rebalancing time by 30%.
• Automation of Tasks: Automated 90% of previously manual tasks, streamlining the entire trade process.
• Real-Time Market Data: Enhanced buying and selling efficiency through immediate access to market data, directly impacting trading success.

Conclusion

Our customized one-window web interface for the client’s order and portfolio management system successfully addressed the operational challenges they were facing. The streamlined processes, improved communication, and automation enabled the hedge fund to enhance its efficiency and effectiveness in managing trades and financial statements.