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How to Automatize Hedge Fund Operations in 5 minutes

Photo by Jason Yuen on Unsplash

Hedge funds remain the fastest growing, best performing, and most fascinating part of the financial market. In responding to increasing sophistication in their users, platforms have evolved to make hedge fund operations easier through greater use of automation.

This guide will describe the most important needs that modern-day hedge fund operations should automate and how different parties address them. Additionally, we explore some real-life solutions to these automation needs and describe how they can be achieved.

3 Tasks that should be Automated in Hedge Funds

Hedge Funds are complex operations, and so they require lots of planning, measuring, and reporting. While many hedge fund managers know the benefits of automating, doing so is easier said than done. Numerous hurdles need to be overcome before automation kicks in. However, by streamlining and automating workflows, these complex operations can yield positive results.

Here are three important operations that should be streamlined and automated:

  • Automate Management. There are several things a hedge fund’s manager needs to control, so many moving pieces. Among these are creating employees’ and investors’ accounts with different access levels, managing accounts and generating reports that provide an overview of employee and organization results, setting specific properties for each fund, such as requirements for investors, financial instruments, settlement methods, capitalization, share values, and so on. By automating all these management workflows and funds operations, a manager sets himself for success.
  • Automate Reporting. Hedge funds must generate information about their assets under management’s performance, periodically for its stakeholders and almost in real-time for its managers. Automating and streamlining reporting workflows can ensure that not only the necessary data is reported, the amount of manual intervention and burden on individuals is also reduced. Hedge fund managers can also free up time for the board to make strategic, data-driven decisions about the future of the business and its investment plans.
  • Automate the Calculation of Fees and Payments to Shareholders. Investors and shareholders are the lifeblood of hedge funds; thus, they need to be dealt with accurately and transparently. As a hedge fund growing and scaling into new heights, there would be a need for a system that automates shareholder fee calculations and payments.  

An automated system that provides flexible fund configurations with settings including hurdle rates, performance fees, fee calculation frequency, and payment mode, among others, relieves the hedge fund manager stress that could be experienced using manual processes or syncing with third-party accounting systems.

Modern-day Automation Challenge

While hedge funds in recent years have been doing great in automating the middle and back-office workflows, the marketing and investor relations department remains the least automated. This can be deduced from the EY 2020 Global Alternative Fund Survey, where nearly 65% of investors believe an investment in this area would benefit their future relationships.

By using technology to automate operations in the marketing and investor relations area, managers will enhance the investor experience and meet the needs of their clients.

Real-life examples of Automation in Hedge Funds

Hedge funds can automate their operations either internally or by partnering with a provider like MetaQuotes Ltd., which offers a comprehensive set of solutions, including automated tools for hedge funds.

A hedge fund such as Bridgewater Associates, the world’s largest, solves its automation needs through internal development. It is developing a software solution that will automate all the firm’s day-to-day activities, including HR, operations, and management decision-making. Based on Ray Dalio’s vision, these automated decision-making processes will consider data coming from a variety of sources and will process them based on a set of rules and criteria.

Lending Robot, a financial start-up, is another example of automation in action. In this automated hedge fund, investments will be made exclusively on peer-to-peer lending platforms. Algorithms will help it purchase and sell assets for its clients, thus eliminating the need for human investors.


As mentioned earlier, MetaQuotes Ltd. provides the MetaTrader 5 for hedge funds, enabling managers to utilize algorithms and automation to trade various assets on behalf of their clients without the need for additional systems. Their tools also allow automation of ETF and fund operations, such as management, reporting, and remuneration to shareholders.

Consider automating your operations to get that competitive edge.

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