KAYENTA

COST SAVING

THROUGH EFFECTIVE TREASURY MANAGEMENT

The treasury function within a hedge fund can provide meaningful additional value and cost savings, if it is managed in an effective and efficient manner. However, many managers are not yet prioritising it, to the potential detriment of their investments and their clients. With regulation striving for greater transparency requirements the need to focus on this function is anticipated only to increase. “It’s about understanding the magnitude of the costs and money at stake,” stresses Chris Hagstrom, CEO at Kayenta, “Hedge funds are paying banks billions of dollars a year in financing payments, and its likely to be the biggest share of their wallet in terms of fees paid, trumping execution fees.” But despite this, there is a considerable lack of understanding among hedge fund managers about how controlling these costs can impact their business. Hagstrom outlines the main concerns.

“It’s an industry-wide problem from a data perspective because prime brokers and banks are using legacy technology with numerous, disparate systems. The way data is displayed and sent differs between banks, making it impossible for managers to really understand their costs without a technology solution,” he says. Treasury Management Systems (TMS) aggregate, normalise, and present this information to provide the necessary transparency, and Kayenta’s offering is proving to be a powerful solution for their hedge fund clients.