Systematic hedge funds differentiate themselves through technology. While discretionary fund managers raise funds on the strength of their ideas and knowledge of markets, a systematic fund’s intellectual property lies to a large extent in the technology it deploys. Historically, that has led to a tendency among systematic hedge funds to develop their own technology infrastructure.

This report’s findings show there is a strong argument for systematic hedge funds to look to third-parties for front office technology development.

However, it is not a simple case of ditching inhouse development in favor of outsourcing. Rather, we found that executives are more interested in mixing inhouse and outsourced tech as part of their offerings — taking a buy-and-build approach to save costs and complexity, leveraging third-party expertise but at the same time retaining control over proprietary elements.

Acuiti has partnered with Broadridge to survey or interview 50 systematic hedge funds to explore how attitudes to front-office technology are changing, where firms are investing and where the pinch points are in front-office technology today.