Powers Unfiltered

An entrepreneur’s journey into grid computing and partnering with Microsoft, by John Powers

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Hedge funds and grid computing, part I

May 31st, 2007 · 1 Comment

Digipede announced another customer win today.  III Offshore Advisors, an innovative hedge fund that uses a lot of computing power in their pricing and risk management models, selected the Digipede Network for their grid.  You can read about it on our Web site; GridToday also picked up the story. 

Financial firms are famously competitive, and no niche is more competitive today than the hedge fund market.  While the secret to success of most hedge funds is just that — a secret — most start with a small core team that says:  We can do better.  We know (through math, intuition, research, hard work, or all of the above) how to make a better investment, a better trade, a better judgment than our competitors.  When we show what we can do, our investors will be rich — and so will we.

Many of the investment and trading strategies employed by these firms are developed through cutting-edge mathmatical modeling.  Some of the brightest minds in the world are drawn to this competitive and lucrative market, and regardless of the models employed, they all cry out for — more computing power.  And it’s not just for one or two applications.  In our experience with hedge funds (and we work with quite a few), even a small fund encounters computational bottlenecks in: 

  • Risk management
  • Fixed income pricing
  • Trading analytics (including liquidity depth analysis, inter-portfolio correlation analysis, and more)
  • Pricing of exotic derivatives, and more

Eliminating these bottlenecks can open up new trading opportunities sooner.  If putting in a grid this month lets you start trading in new markets next month — that’s an easy decision.  If putting in a grid this week lets you out-trade your competitor next week — let’s go. 

So how did the Digipede Network become the grid computing software of choice for hedge funds?  I’ll tell you in Part II.

Tags: Grid applications · Growth · Press coverage

1 response so far ↓

  • 1 Marc Jacobs // Jun 1, 2007 at 8:40 pm

    Congratulations, John! Finally got a hedge fund customer that talks!

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