FAQ

1. What is Hedgecasa?

Hedgecasa manages data on hedge funds for their investors. The Hedgecasa Pro product does this by providing a database and analysis system. As part of the service Hedgecasa performs data management functions. We also offer Hedgecasa Free (a free service) and Hedgecasa Lite.

2. What is hedge fund data?

In simple terms it can be broken down into the 'who, what and how' of hedge funds. The 'who' refers to who the hedge fund is: what the name of the fund is, who the managers are, what their background is, where the fund is located and how it can be contacted. The 'what' refers to what the strategy of the fund is: what the investment objectives are, what risk parameters are used, what investment instruments are used, what geographic focus the fund has. The 'how' refers to how the fund has performed: what the monthly returns are, how the assets have grown.

3. What are the main services of Hedgecasa?

Cleaning, Amalgamation, Structuring and Analysis of hedge fund data.

4. Is Hedgecasa an external data provider?

No. We only use information that is provided to us by clients, whether it is from the fund of hedge funds analyst team gathering data directly from hedge funds or from external data providers that the client is subscribed to.

5. Does Hedgecasa provide investment services?

Hedgecasa is not involved in providing investment advice or services to firms or individuals regardless of whether they achieve the status of accredited investors. Only accredited investors should use this service.

6. What is an external hedge fund database?

Various companies provide subscription databases for hedge fund investors. These include HFR, Hedgefund.net, Eurekahedge, Cogenthedge and BarclayHedge among others and are available to accredited and qualified investors. They will contain various details regarding the 'who, what and how' of hedge funds (see above 'What is hedge fund data?').

7. Who owns the hedge fund data?

The data is owned by the provider, which is either the fund of hedge funds or the external data provider.

8. How is hedge fund data combined?

Where Hedgecasa Pro clients are subscribed to various data sources they can choose which data gets priority showing within the Hedgecasa Pro database fields. All field entries are tagged such that clients can see whether an entry is from one of the external databases or whether it is an entry from one of the fund of hedge funds' own analysts. Clients always have access to original data sources where they wish to view these.

9. What is Hedgecasa Lite?

Hedgecasa Lite provides cleaned and structured versions of existing external hedge fund databases, available to subscribers of those databases. This enables complete search and filtering over the dataset.

10. What is Hedgecasa Free?

Hedgecasa Free provides access to a limited set of fields from Hedgecasa Lite products. For example you will find a cleaned and structured information set regarding the service providers to hedge funds listed in a given external data source enabling complete search and filtering for these fields.

11. What makes the hedge fund industry unique?

While the hedge fund industry has grown massively in the last ten years what still makes it unique is the fact that due to its unregulated nature it is allowed to exploit niche opportunities. This may not necessarily mean a hitherto undiscovered market but simply a different take on an existing one, where manager skill is most important and this lends itself naturally to small investment teams. Many of the most attractive funds are often small because they are investing in a way that others have as yet been unable to imitate. Alternatively they may not have had time yet to grow away from their core competency or they may have chosen to stay small to maintain investment focus.

The non-institutionalised nature of these funds means they often have small back offices and reporting is often done by junior investment analysts or through a rudimentary system devised by the fund manager. This contributes to the non-standardised and 'dirty' format of much hedge fund data that their investors receive.

12. In what form is hedge fund data received?

The information reported by hedge fund managers to their investors arrives in a myriad of forms. Ideally for investors it would arrive in a perfectly structured way, instantaneously feeding into their existing and complete database structure with fund descriptions, returns and commentary all flowing through into an insightful analytical package which will significantly aid fund selection. In reality some funds will send Word documents which include the latest month's performance and commentary with updated fund location details, or do the same but with a PDF file. Of course each fund will use a different format, making standardised extraction of data a tricky task. Then there are those who send PDF docs for some information but may send Excel files to give a time series of AUM figures to their clients. Commonly, news updates are sent in the body of emails. Add to this the information stored in a variety of subscription databases and through the Bloomberg funds network and compiling information in a meaningful way becomes an awkward task.

13. Who are hedge fund investors?

The fund of hedge funds industry or the hedge fund investor group as a whole has found it difficult to cope with this data fragmentation and few investors have managed to resolve this through development or implementation of a robust, comprehensive and user-friendly system. The key hedge fund investor groups are family offices, specialised fund of hedge funds and private banks. Like hedge funds, their underlying investments, this industry has seen immense growth. As with their underlying investments, these investors have not on the whole become institutionalised and consequently find it harder to produce effective data management systems. These obstacles are compounded by the inherent fragmentation of the data they receive.

14. How is IT currently used by hedge fund investors?

The hedge fund investor's operation is often comprised of a relatively small investment team and an even smaller back office, which includes IT support. Technical support has tended to shy away from providing data management solutions to simply providing help to 'fight fires'?, whether they be in file corruption, server maintenance or network administration. Even when part of a large private bank, the hedge fund investor team may be left to organise and manage their own data without technical support. Different analysts in large fund of hedge funds will be in charge of a specific fund type or region and must input data from the funds they view into clunky and uncompromising databases. Some databases no doubt allow detailed and useful information to be entered and viewed, but the task of inputting data becomes very different when the analyst needs to view not a handful of funds but several hundred hedge funds.

15. How is hedge fund data currently organised?

Investors have tended to use ad hoc data structures requiring storage of data in spreadsheets or Access databases. Investment analysts will often keep spreadsheets in which performance data of the funds they are (currently) interested in can be compared. Contact details, fund location and other information pertaining to the funds' activities may be kept in a variety of places including Access databases, Outlook or other mail management programs, Word documents, local area networks or again in spreadsheets. Importantly however, these will be unconnected to those where performance data is kept. Some investors have hired consultants to design data management systems for them. These may however simply recommend a combination of existing software products which the investor has to work around, its analysts having a limited and rigid set of tools to upload information and where viewing and analysis of this data is somewhat prescriptive. Where systems have been specifically designed, they are often done at great cost and with little thought as to the complexity that its (less IT-literate) users may be able to manage. Where investors are flooded with cash, they may opt to pay consultants to develop a system which is then maintained by an in-house IT department on the instructions of investment analysts. This would provide the fullest solution but few are willing to spare the expense and immense time involved in creating such a structure. It would involve the IT group becoming intimately involved with the data needed to analyse hedge funds and then carrying out the arduous task of maintaining that data, an expensive undertaking.

16. The future of hedge fund data management, what is Hedgecasa Pro?

The Hedgecasa Pro solution is to have a specialised team of data managers to access information that investors feel is pertinent to their analyses of hedge funds and for these data managers to feed the information into a database system designed by Hedgecasa. Hedgecasa is also creating various tools which facilitate rapid and thorough distillation of data with robust data integrity checks and priority given to data and sources of the investment analyst's choice. The Hedgecasa system is accessed through a web interface, allowing investors to access clean data on the hedge funds they are interested in. Not only does access involve simple viewing of data but also the tools to analyse this data in previously unobtainable detail. This includes gathering simple statistics as well as more complex techniques such as those using regression or cluster analyses.