Handling and aggregating large volumes of trade data is becoming a critical issue for hedge funds, industry experts have warned.
A report published this week by technology provider SunGard and consultancy Finadium found that transparency and reporting issues are among the biggest concerns facing hedge funds and the prime brokers they rely on.
Finadium spoke to 33 hedge funds and found that better real-time information and stock loan data were key areas prime brokers could provide better information.
According to the results, almost 25% of hedge funds require more real-time information from their prime brokerage, while stock loan information was highlighted by 20% as a major concern.
Meanwhile, providing accurate reporting data was cited by 52% of the funds surveyed as an important service they expect from prime brokers or third-party providers.
The importance of data management and reporting functionality has also been highlighted as a "major trending topic" by David Polonsky, hedge fund software product manager at Linedata.
Polonsky agrees that reporting is a big issue for the industry: "Lots of clients on the buy-side are looking critically at reporting functionality. They need to be able to aggregate all this data easily to show to both their investors and, increasingly, to satisfy regulators."
Providing technology advice was also identified in the Finadium report.
"Funds noted that legal or technology advice was a vital resource and that periodic seminars by prime brokers were worth attending. Funds knew the name of the "plugged-in" human resources at various prime brokers and complimented their efforts by name," the report said.
Providing technology and support to aggregate data for analysis by hedge funds are likely to become key battlegrounds for service providers in this area.
Polonsky added: "We get a lot of enquiries about data points and it's important to ensure you tailor reporting functionality to bring this together to suit the needs of the clients."