Brief:

Powering Top Hedge Funds

Key facts

More than $3 trillion total value of assets managed by hedge funds worldwide in 2019

More than 50 percent of marketleading hedge fund managers use seven or more alternative data sets

$1.7 billion estimated spending on alternative data by fund managers in 2020, up from $400 million four years ago

Overview

Hedge funds are always seeking alpha. But these days, potential profits may be driven more by data and analytics than by financial fundamentals.

That’s why the need for both data and high-speed analytics for hedge funds has exploded in the past few years. This is especially true with hedge funds’ use of big data, alternative data, and data-powered investing. Analyses of increasingly large sets of alternative data, from social media posts to news reports—and just about anything else—can have a big impact on investment decisions. They can also highlight important economic trends that provide new opportunities.

Faster analytics and processing capabilities and more-flexible data strategies are required to capitalize on the massive amounts of alternative data. They need to enable fund managers and analysts to easily work with billions of rows of data in near real time. Hedge funds need to be able to rapidly onboard information from both local and cloud-based sources in a scalable and consistent way. And analysts need to be able to use that data to quickly explore new ideas, create new models, and make faster decisions.

Even hedge funds that don’t rely on alternative data are falling behind the competition when it comes to real-time analytics. Market volume has exploded. For everything from daily order processing to reporting and Order Audit Trail Systems (OATS) and Consolidated Audit Trail (CATS) compliance, getting reports or critical analysis completed in ever-tighter timeframes is becoming increasingly difficult with most existing hedge fund systems. At the same time, controlling and managing risk has never been more important, or more difficult.

Modern analytics with Yellowbrick Data Warehouse

Legacy platforms are too expensive, and vendors of conventional cloud data warehouses offer unpredictable consumption-based pricing and have no incentive to provide good performance.

Yellowbrick Data Warehouse is an advanced MPP SQL analytic database for demanding batch, real-time, ad hoc, and mixed workloads. Built from scratch for best price/performance, its adaptive “cut-through” architecture takes best advantage of any physical (e.g., optimized instances) or virtualized (e.g., Kubernetes) infrastructure—delivering 100x performance for thousands of users at a fraction of the cost of alternative data warehouses. On top of that, we add a modern, industry-standard database interface (PostgreSQL) that’s familiar to users for ecosystem compatibility. The result is a modern, quickly provisioned, and easy-to-use solution that blows the doors off rivals in price/performance economics and that can be deployed anywhere across distributed clouds (private, public, and edge networks).

Additional Yellowbrick advantages include:

Challenges

Opportunities

Compliance

Get faster access to more-granular data for automated and ad hoc regulatory disclosures

Siloed data sources

Seamlessly integrate multiple data sources and legacy systems data into a single instance for better investment decisions

Real-time data

Integrate real-time data—of any amount— seamlessly into decision-making processes and models

Overwhelming flows of real-time data

Discover new opportunities for profit and competitive advantage via more-accurate models based on the latest data sets

Onboarding new data

Rapidly onboard new data from any source, using standard tools, to support analytical needs

Rapidly testing new ideas and models

Get freedom to choose data centers, public clouds, and both (hybrid) for deployment

Rapidly scaling systems to meet new opportunities

Address new opportunities by scaling data and analytics horizontally or vertically without limits

Data incompatability

Seamlessly integrate as much alternative data as wanted, from cloud or local sources, into analyses and models

Integrating cloud data with data from local systems while increasing flexibility and agility

De-risk cloud journeys via freedom to choose data centers, public clouds, and both (hybrid) for development

Security

Ensure security by encrypting data at rest by default, with rapid de-encryption when data access is required by authorized users

Fast & easy migrations

Yellowbrick is compliant with industry standards for plugging seamlessly into existing environments that include common data integration, BI, and identity management tools. Migrations are fast and easy from any legacy platform, and we’ll work with you to validate your use cases and success metrics along the way.

Customer spotlights

Top hedge fund and market maker

A top hedge fund and market maker found its existing database and analytics infrastructure unable to keep pace with current requirements in a variety of ways. The company knew it needed to modernize its SAP Sybase IQ legacy technology to keep up with modern-day market volumes. The legacy system was overly complex and provided poor performance. In addition, the company was struggling with timely OATS and CATS compliance reporting.

After evaluating a range of options, the hedge fund selected Yellowbrick for its solution and achieved significant results:

Yellowbrick performance was 10x the nearest competitor.
Daily order processing dropped from five hours to four minutes.
Yellowbrick enabled near real-time ad hoc reporting for reports that previously took hours.
Yellowbrick’s hybrid architecture enabled the company to deploy on premises.
Yellowbrick provided the ability to run compliance reports even when the internet was down.

Top 10 hedge fund

A major top-10 hedge fund faced multiple challenges with its existing analytics platform. The company needed more speed and fl exibility from the platform, which wasn’t keeping up with current business needs. The legacy Microsoft SQL Server and KDB proprietary database for time-series Trades and Quotes (TAQ ) data was unable to meet critical performance requirements. In addition, the new solution needed to leverage standard SQL and standard tools for seamless analytics by existing users. And the solution needed to support a hybrid environment, with the ability to deploy both on premises and in the cloud.

After evaluating both KDB and SQL Server upgrades, the hedge fund selected Yellowbrick for its new analytical platform for the following reasons:

Yellowbrick’s performance was exceptional. The system loaded 1 billion records in less than three minutes.
Yellowbrick was the only solution to meet the company’s research performance requirements.
Yellowbrick met or exceeded performance requirements for future predictions of extreme workloads and disaster recovery situations.
Yellowbrick’s hybrid architecture provided ultimate fl exibility with its ability to deploy both on premises and in the cloud.

Get Started

Yellowbrick Data empowers companies to make faster decisions with all of their data. Built for enterprises and the hybrid cloud, the Yellowbrick Data Warehouse deploys powerful analytics anywhere, with best in-class economics.