Most fund launches follow a familiar pattern: the investment thesis is tight, the legal structure is built, the prime brokerage relationships are established — and then the operations questions start arriving all at once. What email system? Where does the data live? What does the SEC expect to see on day one? What do we do if something goes wrong?
Technology decisions made at launch are disproportionately consequential. The infrastructure you build in the first 90 days shapes your operational posture, your regulatory exposure, and your capacity to grow. Our team has supported institutional investment managers through 10+ years of hedge fund IT operations across SEC and FCA jurisdiction. These are the decisions we’ve seen matter most.
Infrastructure and Connectivity
The physical and network foundation of your fund deserves as much deliberate thought as your trading infrastructure. Common mistakes include underprovisioning internet redundancy, skipping proper network segmentation, and leaving office infrastructure to be figured out “later” — which usually means handling it as an emergency during the busiest period of launch.
Networking and switching: For your primary office, a managed network with VLAN segmentation (separating trading, compliance, and guest traffic at minimum) is the baseline. Cisco Meraki has become the dominant choice at this scale — the centralized management, integrated security, and cloud-monitored dashboard simplify operations and provide the visibility you need for compliance purposes. Unifi is a reasonable alternative for cost-sensitive launches.
Internet connectivity: Single-carrier internet for a trading operation is an unacceptable risk. Your primary circuit should be fiber (ideally 500Mbps symmetric or better); your failover can be a separate cable provider or a 4G/5G LTE backup. Automatic failover — configured in your router/firewall, not a manual process — is the requirement. Bloomberg, prime brokerage connectivity, and cloud applications cannot tolerate an unplanned outage.
VPN: Every fund needs secure remote access from day one. Whether that’s a hardware VPN appliance or a cloud-based zero-trust access solution depends on your infrastructure approach, but there must be a secure, documented, MFA-enforced path for remote work. Employees should never be connecting to fund systems over unprotected internet connections.
Co-location decision: For most launches under $500M AUM, co-location is no longer necessary for primary infrastructure if you’re running a cloud-first stack. The exception is if you have latency-sensitive trading infrastructure that benefits from proximity to exchange co-los or your prime broker’s execution infrastructure. If you’re running a fundamentals-based long/short strategy on Microsoft Azure infrastructure, co-lo adds cost and complexity without meaningful benefit.
Backup power: UPS units on all critical network equipment, workstations, and any on-premise servers. This is not optional. A power fluctuation that corrupts an active trade or a compliance system creates regulatory risk, not just inconvenience.
Order Management and Portfolio Systems
This is often where fund launches spend the most time and budget — and where the most common mistake is over-engineering for scale you don’t yet have.
OMS selection is driven by strategy, not size. A global macro fund has different execution requirements than a small-cap equity long/short manager. The major platforms at hedge fund scale — Eze OMS (now SS&C Eze), Charles River, and Enfusion — all have strengths and pricing structures worth evaluating against your specific needs. Bloomberg AIM remains the benchmark for established managers but carries licensing costs that may not be justified at launch.
For a launch under $200M AUM with a straightforward equity strategy, a lighter-weight solution (Limina, Imagine, or even a well-configured prime brokerage execution platform) is worth considering for the first one to two years. Over-investing in OMS at launch when the trading infrastructure is inherently simple is a common budget mistake.
What to look for in your first OMS: Ease of reconciliation against your prime brokerage and fund administrator, robust compliance rules pre-trade and post-trade, straightforward books-and-records output for your compliance team, and a path to upgrade as you grow. An OMS that handles your current strategy well and produces clean data is more valuable than a maximally featured platform that requires six months to configure.
Prime brokerage technology integration: Your prime broker will have specific requirements and connectivity options. Understand their trade reporting formats, margin reporting, and any proprietary platforms (Morgan Stanley’s Matrix, Goldman’s GSite, etc.) that your team will need access to. Factor this into your infrastructure and connectivity planning.
FIX connectivity: If you’re executing with electronic brokers or will need FIX connectivity for execution, this requires infrastructure and testing time before launch. Do not treat FIX connectivity as a day-one item — build testing cycles into your pre-launch timeline.
Market data: Bloomberg is the default and typically unavoidable for serious investment management. Terminal pricing varies significantly by license type and seat count; negotiate carefully at launch. Refinitiv (LSEG) is the primary competitor for data feeds and analytics. For early-stage launches with constrained budgets, evaluate exactly which Bloomberg functions you actually use before defaulting to a full terminal for every team member.
Cybersecurity from Day One
Every week that passes before establishing proper security controls is a week of accumulated risk that becomes harder and more expensive to address retroactively. We’ve seen what it looks like to retrofit security onto a two-year-old fund that grew without a security baseline — it is a multi-month, expensive, and disruptive project.
Why retrofitting is harder: When you build security in from the start, you can enforce policy at enrollment. Every device gets EDR at setup. Every user gets MFA at account creation. Every system is provisioned with proper access controls. When you try to apply these controls to an existing environment, you’re dealing with legacy exceptions, resistance from users who have been working without restrictions, and the audit trail of two years of undocumented activity.
The minimum viable cybersecurity stack for a new fund:
- Endpoint Detection and Response (EDR): Not antivirus. EDR — Microsoft Defender for Endpoint, CrowdStrike Falcon, or SentinelOne at minimum. Every managed device, day one.
- Email security: Microsoft Defender for Office 365 Plan 2 if you’re on M365, or a third-party solution like Proofpoint or Mimecast. Phishing is still the primary attack vector. A $15/user/month email security add-on is trivially cheap compared to an incident.
- MFA everywhere: Every cloud service, every VPN, every remote access path. Authenticator app, not SMS. This is non-negotiable for any fund that will face an SEC examination.
- Written security policy: You cannot pass an SEC examination without a written information security policy. Draft it before you receive clients, not after your first examination request. This document doesn’t need to be elaborate at launch — it needs to exist, be accurate, and be signed off by a principal.
Third-party vendor risk: Every SaaS application that touches fund data is a potential attack surface and a potential SEC examination issue. Build a vendor inventory from the start, document each vendor’s data handling and security attestation (SOC 2 reports are the standard), and establish a process for reviewing new vendors before they get access to fund systems.
SEC Compliance Technology
The compliance technology stack is an area where new funds consistently underinvest relative to the actual examination risk. The SEC doesn’t give credit for planning to build the right infrastructure after your first examination.
Books and records — email archiving from day one: Under Rule 17a-4 and the investment adviser books and records rules, email archiving is a legal requirement, not an option. Set up archiving before you send the first fund communication. Microsoft 365 includes archiving capabilities in higher-tier plans; purpose-built archival platforms (Smarsh, Global Relay, Proofpoint Archive) add compliance-specific search and production capabilities. The specific platform matters less than having it running before the fund is operational.
Trade surveillance: For early-stage funds, purpose-built trade surveillance platforms may be cost-prohibitive. Bloomberg Compliance and Compliance Science offer entry-level options. Your prime brokerage may offer reporting tools that partially satisfy this requirement. Work with your compliance counsel to determine the minimum acceptable surveillance framework for your strategy and AUM level.
Compliance calendar and workflow: A shared calendar with regulatory deadlines, ADV filing dates, and required review cycles is a minimum. Purpose-built compliance workflow tools (Comply, ComplySci, or Schwesser’s solutions) add value as you scale. At launch, a well-maintained shared document is better than nothing, and can be upgraded.
Document management: All fund documents — investment policy statements, compliance manuals, contracts, vendor agreements — need to live in a managed, backed-up, access-controlled repository. SharePoint or Google Drive with proper access controls is sufficient at launch. The critical requirement is that it exists, is maintained, and can be produced on request.
Our team has built compliance programs that eliminated 100% of audit findings across multiple SEC examination cycles. The pattern that works: treat compliance infrastructure as a first-class technology investment, document everything from the beginning, and review annually.
Disaster Recovery and Business Continuity
BCP is not optional for a registered investment adviser — it’s an SEC requirement under Rule 206(4)-7. More practically, your ability to continue operations during an incident is central to your fiduciary obligation to clients.
The minimum: A documented BCP that has been tested and reviewed by a principal at launch, and tested at least annually. The document must address: how the fund will communicate with clients during an incident, how trading and client servicing will continue if primary systems are unavailable, and recovery procedures for key systems.
RTO/RPO targets: For a small fund, realistic recovery time objectives (RTO — how long you can be down) and recovery point objectives (RPO — how much data you can afford to lose) should be set explicitly. A reasonable baseline for a launch-stage fund: RTO of 4 hours for critical trading infrastructure, RPO of 24 hours. These targets drive your backup architecture and recovery procedures.
Backup implementation: Cloud backup (Azure Backup, AWS Backup) for all critical data, with regular restore testing. Backup monitoring should be part of your managed IT scope. A backup that isn’t tested is a backup you don’t have.
What to Spend
Budget reality varies significantly by fund strategy, AUM target, and operational model. Rough guidance for technology spend at launch:
Under $100M AUM, lean operating model: $15,000 to $35,000 for one-time setup and first-year infrastructure. This assumes cloud-first architecture, standard OMS, and a managed IT partner for day-to-day support.
$100M to $500M AUM, standard institutional setup: $50,000 to $150,000 for setup; $8,000 to $20,000 per month ongoing for managed IT, market data, and compliance platform subscriptions.
Above $500M AUM, full institutional stack: Budget increases significantly with dedicated compliance systems, Bloomberg for all investment professionals, co-lo infrastructure, and broader vendor requirements.
When budget is constrained, prioritize in this order: cybersecurity and email security (non-negotiable), books and records archiving (legal requirement), reliable internet redundancy (operational risk), and OMS (right-size for your actual trading needs, not your aspirational future state).
Getting Help
The funds that launch cleanly are the ones that engage an IT consultant with actual fund launch experience — not a generalist IT provider learning on the job at your expense. Our team has managed the full technology stack at institutional investment managers, from infrastructure through OMS integration to SEC examination support.
If you’re in the pre-launch phase or early operational stage, we’d welcome a conversation. Our vCTO engagement model is designed specifically for investment managers who need strategic technology leadership without the full-time cost.
New clients receive a $500 credit toward any Chadsel engagement.