COOs at a roundtable at the Hedge Fund COO Summit Europe felt migration risk, human habits and AI were among the top things to consider when looking at outsourcing operations to a third party.
The discussion hosted by Basim El-Shoura, Executive Director, Sales at Enfusion by Clearwater, alongside Patrick Mang, COO of Trium Capital, was held under Chatham House Rule.
From the conversation, we have put together the top 7 observations operation leaders have when it comes to hedge fund outsourcing.
Enfusion by Clearwater Hedge Fund COO Summit Europe 15–16 September · Fairmont Windsor Park
The roundtable in session at Fairmont Windsor Park, hosted by Basim El-Shoura (Enfusion by Clearwater) with Patrick Mang, COO of Trium Capital.
The biggest obstacle to change is fear about legacy systems. Participants recalled legacy migrations that ran over time and over budget, with teams lost in matching historic data to the penny. That memory makes firms cautious. The appetite now is for pragmatic transitions and a lower total cost of ownership.
There was healthy scepticism of anyone trying to sell you the moon in hedge fund outsourcing. The room favoured adopting managed services function by function: start with reconciliations, prove the value, then extend. Cash reconciliation was singled out as stubbornly hard to run in-house, and a natural first candidate to hand over.
Time and again, the barrier to change was not the technology but the people using it. Portfolio managers grow attached to familiar routines, such as insisting on hourly P&L reports even when a better route exists. Those habits, not the systems, often drive the cost and complexity.
Nobody described a purely outsourced or purely in-house model. The common pattern is a blend. Participants outsourced parts of the middle office, while keeping performance attribution, reporting and investor due-diligence responses close to home, often via a small data team.
An underappreciated factor is how allocators view your stack. In due diligence, investors reward recognisable provider names. The attendees found that when familiarity ticks a box and the conversation moves on. The choice of platform is not only an operational decision, it’s a signalling one.
The liveliest exchange was on AI. There was real enthusiasm for its ability to read messy spreadsheets, scan every cell and surface the differences, the reconciliation work that has resisted easy commercial answers. That enthusiasm had a clear limit, though. There was one point the room was unanimous on, no one wanted to build their own OMS using AI, given the complexity that entails. The real question is where to let AI assist in-house, and where to rely on a proven platform.
No single model suits everyone. A highly systematic or exotic-derivatives shop may be better served building its own tooling. Whatever the choice, one principle held firm get the data right before layering AI on top. Clean, reconciled data is what makes both outsourcing and automation pay off.
The debate is rarely binary. The right moment is defined less by front-to-back versus best-of-breed than by timing, pragmatism and cost.
For many, that means consolidating a trusted core, integrating specialist tools at the edges, and letting managed services and AI carry the load, so teams focus on decisions, not reconciliation.
If any of these themes resonate with the challenges you are working through, we would welcome the conversation. Enfusion by Clearwater supports more than 1,000 hedge funds and asset managers in running leaner, cleaner operations from front to back, helping firms find both the right moment and the right model for change. Get in touch to talk through where you are on that journey.