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Convertible Arbitrage Hedge Fund

Company Profile

This multi-million convertible arbitrage hedge fund was formed in the early 2000s by a group of former portfolio managers.

The Mission

This business operated offices in the UK and USA. Data was shared between the offices via email, and the company was managing its portfolios across shared spreadsheets. The current system processes were not secure nor suited to further enterprise expansion and needed modernising.

What Our Associate Did

Systems design

Starting with an overview of what the company wanted to achieve, an IT Roadmap was drawn up. This included a re-design of the portfolio and risk management systems, back office automation systems, a security review, disaster recovery planning and business continuity tools.

Application development

One of the key achievements of the project was the bespoke software that was designed and built from scratch with the Associate. Off-the-shelf packages were available, but none of them provided the functionality the company required. By building bespoke portfolio and risk management systems, the company had full control over the features and functionality they wanted to use.

Automation

With custom-developed back office software, much of the back office transaction processing was now automated. The Associate built systems that managed trade reconciliation, funding payments, forex balancing and trade hedging, which helped keep staffing head counts low for the business, and therefore increased efficiencies of the current staff.

Networking

Having multiple offices both in the UK and USA meant keeping data in sync across all sites was an important and complex task. At the time of the project, the concept of data centres was new and a dedicated fibre line was grossly expensive and outside the company’s budget. The Associate conducted research to scope out the fastest internet connections for each office, and subsequently connected them all over VPN appliances.

The Results

The new systems that were designed and built by the Associate helped the company grow from $300m under management at the outset to over $3bn at its peak.

Efficiency wise, the company’s total head count never exceeded 24 members of staff across four offices. The ease of use of all new systems also meant that staff were able to jump across roles to help fill in when colleagues were on holiday or off work; it wasn’t uncommon to see back office staff managing the portfolios and the IT staff performing back office tasks after the systems were implemented.

The office connectivity gave the company business continuity, with every office backed up and synchronised across the network continuously.

In order to deliver a comprehensive overview of our Associates' experience and to detail the service that they can deliver, some of our case studies will contain work carried out by Associates prior to joining Bailey & Associates. Please note that we are not able to publish every case study, so if you would like to ask about our experience in a specific sector or industry, please contact us directly.