The build-or-buy decision looms large for a lot of small- and medium-sized hedge funds these days. They absolutely need cutting edge technology at all levels, front office and back office. But the minimum requirements to stay competitive just keep going up.

There's a grand tradition in the trading business on Wall Street to just program it all yourself. There are many traders and hedge fund guys who are programmers themselves out of necessity. The vendor community will argue long and hard, as a vendor does in Hedge Funds Review, that hosted solutions have come of age.

There are certainly some vendors promising big fund-quality solutions for small funds. And they have a point. Rather than spend millions to build a home-grown, why not just rent? I'm reminded of all those retail oriented dot.coms who spent everything on order systems when they could have used eBay. The issue is whether hosted solutions will really meet your needs. That's an open question. Most will argue that the back office, administrator solutions have really come of age. But the front office may be another question.

For more:
- here's the Hedge Funds Review article

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