February 2023

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This report evaluates the decision factors important to hedge funds in selecting Treasury Management Systems (TMS). TMS have gone from being a nice to have for hedge funds to an important part of the technology, operations, financial management and due diligence stack. A target market of over 1,000 funds now exists as the AUM entry point steadily declines.

There is no one size fits all for hedge funds in selecting a TMS. Rather, the selection of a vendor platform is an iterative process driven by the requirements of the fund and with consideration for how value can be quantified and maintained. There is also a need for providers to create and retain a team that can turn what may appear at first to be an operational function into part of the alpha generation process extending throughout the enterprise. Both hedge fund users and vendors recognize that these steps require extra work, but for funds engaged in the process, it can be well worth it.

This report provides several inputs to hedge funds considering or using a TMS. First, it assesses what the quantitative and qualitative value-adds are of TMS, and how hedge funds may determine those figures. It offers a brief review of why TMS have become more important over the last decade, then evaluates the main functional benefits of vendor platforms.

This report should be read by hedge funds, long-only asset managers, family offices, custodians, prime brokers and technology providers in the Treasury and collateral space.

Table of Contents

  • Executive Summary
  • The Value of Treasury Management to Hedge Funds
  • The Drivers of Change
  • Users and Functions
    • – Corporate vs. Hedge Fund Treasury
    • – Counterparty Management
  • A New Industry Baseline
    • – The Provider Market
    • – Directory of Resources
  • About Finadium LLC

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