By Frank Glock, CRO, MAIA Technologies: Undoubtedly, performance alpha is seen as the universal standard for measuring the success of an investment firm. But what is the enabler? And – more importantly – how can a firm strive to attain the holy grail of performance? Consistency. The answer lies in an often-neglected tenet of the investment value chain. The operational engine.
Every trade tells a story — not just of market strategy, but of the intricate infrastructure that supports it. From pre-trade risk checks to final settlement, the lifecycle of a trade for many firms involves an increasingly complex web of technology, data flows, and service partnerships. Yet, many hedge funds underestimate the operational alpha that a streamlined trade lifecycle can deliver.
In this article, we explore the operational processes and specifically the technology that optimizes the investment value chain, and how firms can future-proof their infrastructure in a market that demands a balance of precision, uniqueness and agility.
Why Shine the Spotlight Now on the Trade Lifecycle?
In short, because it matters now more than ever. The velocity of systemic change experienced within the Alternatives industry over the past three years materially surpasses events from the preceding decade.
There is a convergence of two critical drivers that are driving this seismic shift, bringing with them associated frustrations; 1. A need for faster, easier access to richer data sets to optimise investment decision making and 2. Outdated technology platform providers unable to keep up with the rate of knots required to support the evolving needs of the investment firm.
As a consequence, the signals in 2025 and beyond predict a ‘survival of the fittest’ scenario with firms having no choice but to make fundamental decisions today to facilitate business resilience, competitive edge and readiness for tomorrow.
The Common Challenges and How to Mitigate Them
The recurring themes that underpin the challenges – and consequently areas requiring a rethink – often faced by hedge funds remains the same: siloed systems (no cohesion between front middle and back office), manual process (increasing running cost and operational risk) and poor vendor coordination (low service levels, distracted by serving other markets alongside).
In order to deliver on a foundation for the future, COOs and CTOs should reimagine the association and relationship with technology. No longer should it be seen as a cost centre. Technology has to be a fundamental value contributor, a differentiator and enabler to scale the business and contribute to alpha. Under this construct, there is a paradigm shift that reexamines the technology vendor as to their suitability as a long-term, trusted advisor who is a positive force on their client’s business. Hedge funds should constantly ask themselves the question “Am I being listened to?” as there must be executive, operational and cultural alignment across both parties that fosters a mandate of trust. If the answer is no, then it may be time to consider change. As Chris Driver, COO at Oldfield Partners, puts it: “MAIA is a technology partner who listens, iterates fast, and actually aligns with our long-term goals.” Daniel Mackey, COO at Protean, echoes this sentiment: “MAIA feels like an extension of our team—they adapt fast, support our growth, and continuously evolve with us.”
Like with any mission-critical partnership, there needs to be continuous validation. In this case the underlying technology and its relative integrity. “Can my service provider cope with how my business will evolve and scale?”, “how can I gain a competitive advantage through my existing technology platform?” are often over-looked questions.
Many platforms labelled as ‘SaaS’ or ‘Cloud’ can fall-short on supporting differentiating business functions or processes that help drive alpha as they are constrained by their outdatedness and/or lack of flexibility.
Firms should place emphasis on technology partners that offer modern, modular architectures and API-first platforms that provide full programmatic control. This approach promotes interoperability and allows customisation where needed while maintaining scalability and cost containment.
Long-term alignment is also critical. Choosing a technology partner with an adjacent strategic roadmap that is anchored to the hedge fund’s growth plans over a 3-to-5-year horizon can only benefit both parties and promote better alignment of partnership. Thomas Orbert, CIO at Truepenny Capital Management identifies with these benefits in a technology partner and says: “MAIA helped us to future-proof and streamline pre-trade to settlement—cutting noise, cost, and latency across our entire operational stack.”
Conclusion
Better, faster more agile solutions that are being borne by technology providers like MAIA drive investment intelligence and automation that optimizes the trade lifecycle and helps drive alpha.
Considering the ‘survival of the fittest’ scenario and the associated factors, it is becoming evident that firms who modernize infrastructure now will capture operational alpha tomorrow.
As agents of change, the COO and/or CTO can only enact meaningful business transformation with aligned technology partners that are listening to them. Continuously. If the answers to the big questions coming from the vendor are not compelling, it is time to change.
