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Empowering Hedge Fund Sophistication with Open-Platform OEMS

Report: Systematic Strategies

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Stockholm (HedgeNordic) – Hedge fund strategies tend to be sophisticated. They often rely on a complex mix of financial instruments and asset classes. Multi-broker Execution Management Systems (EMSs) have become indispensable tools for hedge funds, assisting their traders and portfolio managers in optimising valuable desktop space and minimising workflow inefficiencies. Neovest, a fully-owned – yet fully independent – subsidiary of JP Morgan, provides an order and execution management system (OEMS) tailored to the intricate needs of hedge fund managers.

“Neovest supports the ability for clients to access a variety of order and execution management products and functions including algos, synthetic baskets, pairs trading, multi-leg spreading in the futures market and routing to high-touch brokers,” explains Jarrett Sydell, Head of Product at Neovest. “Our strengths include our diverse broker network, the intuitiveness of the platform, quick installations, our fully ‘redundant infrastructure’ and our customer support,” he emphasises.

“Neovest supports the ability for clients to access a variety of order and execution management products and functions…”

Jarrett Sydell, Head of Product at Neovest

Neovest predominantly caters to hedge fund managers, with approximately three-fourths of Neovest’s 600 clients falling into this category. Neovest’s client base is global, while originating in the United States, Neovest have an established client base in EMEA, APAC and most recently the Middle East. The Nordic region, the second-largest European market for hedge funds, holds significant appeal for Neovest due to its platform’s suitability for hedge funds.

Open Structure, One of the Four Development Pillars

In a fiercely competitive vendor landscape where numerous EMSs claim to be multi-broker and multi- asset, Neovest adopts a customer-first mindset with its Open Platform. This architecture allows users to integrate other platforms and systems seamlessly with Neovest’s core product.

“If a customer requests integration with another platform that might have overlapping functionality with ours, we will facilitate it, provided it simplifies the customer’s workflow and helps them achieve what they need,” explains Sukh Bachal (pictured), Head of Business Development at Neovest. “We avoid creating barriers and dictating specific workflows; instead, we adapt to what works best for them,” points out Bachal.

“If a customer requests integration with another platform that might have overlapping functionality with ours, we will facilitate it…”

The open platform architecture represents one of four pillars in Neovest’s development strategy, alongside expanding the asset palette, enhancing workflow management, and modernising technology. Sydell, who leads Neovest’s product development, underscores the open platform strategy’s role in enabling customers to access relevant portfolio information from other systems without the need for constant switching. “We are trying to ensure that our customers don’t have to swivel chairs between one system and another. Our Neovest platform should allow them to pull up relevant information about their portfolio that they might have in another system, making it easier to send orders to brokers in the network.”

The second product development pillar focuses on broadening the array of asset classes and instruments available for trading. Neovest currently allows clients to communicate their orders to over 340 brokers specialising in equities, futures, options, and FX. “We are continually discussing our offerings with customers and looking at the asset side to determine where to focus next,” points out Sydell.

The third pillar centers on workflow management, representing the core of OEMS. “A lot of our development efforts focus on workflow efficiencies inside the Neovest product itself, not necessarily related to our open ecosystem,” explains Sydell. This work may involve eliminating workflow outliers to enable customers to focus on the core tasks. “Workflow management is a significant part of our OEMS strategy,” emphasises Neovest’s Head of Product.

“Workflow management is a significant part of our OEMS strategy.”

The fourth and final pillar in Neovest’s development strategy entails the continuous search for new technologies. “We continually invest in modernising our technology and infrastructure, constantly exploring new technologies available to ensure our services can continue to grow with our growing user base,” says Sydell. “Part of that strategy right now is transitioning some of our monolithic infrastructure into microservices, leveraging the technology that can easily be spun up or spun down based on usage.”

Open-Culture and Fast Onboarding

“Alongside our open platform architecture, we also have a very open culture at Neovest,” emphasises Sukh Bachal. Despite being under the umbrella of JP Morgan, Neovest maintains its own infrastructure and operates independently with broker neutrality, fostering a startup-like atmosphere. This culture is valuable as it enhances the understanding of market intricacies, a crucial aspect when providing support to hedge fund clients.

“Users should really feel confident that we understand the markets. Our support and account managers possess a lot of market experience, so they understand the trading landscape very well,” says Bachal. “If a trader picks up the phone and contacts our customer support with an issue, the response should be ‘I know exactly what you are saying.’” Bachal goes on to emphasise that “an open platform is really good, but that complemented with our open mindset is what really makes a difference to hedge funds.”

“Users should really feel confident that we understand the markets. Our support and account managers possess a lot of market experience…”

In addition to its open architecture and breadth of asset classes, Neovest also seeks to offer a fast onboarding process. “From sales to the deployment phase, the whole journey can be as quick as five or six weeks,” says Bachal. “When we first demo to a client, we have this approach of WYSIWYG, which means that ‘what clients see today is what they are going to get’ on day one,” she emphasises. “There is not going to be any delta, there is not going to be any phase deployments. This is it.” This streamlined onboarding process appeals to hedge fund clients who seek to go to market quickly.

Neovest garners a significant portion of its new business from individuals who previously used the platform. A former Neovest user from the United States recently launched a new fund and opted to use Neovest as its OEMS. “We don’t need to see a demo, we were only using Neovest a few months ago, just get us up and running,” Bachal recalls the conversation with the client. This trend underscores the positive experiences clients have had with Neovest’s platform and services, a testament to the company’s commitment to delivering efficient solutions to the hedge fund industry.

To learn more about Neovest and how it can benefit your business, visit www.neovest.com.

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Eugeniu Guzun
Eugeniu Guzun
Eugeniu Guzun serves as a data analyst responsible for maintaining and gatekeeping the Nordic Hedge Index, and as a journalist covering the Nordic hedge fund industry for HedgeNordic. Eugeniu completed his Master’s degree at the Stockholm School of Economics in 2018. Write to Eugeniu Guzun at eugene@hedgenordic.com

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