Hedge funds express greater interest in disaster recovery systems post-quake and hurricane

Date: Tuesday, September 6, 2011
Author: Martin Leonard, COO Connect

There has been renewed interest from hedge funds in disaster recovery systems following the onslaught of Hurricane Irene and the magnitude 5.8 earthquake on the US’s east coast, according to technology provider Eze Castle.

The Boston-based firm said it saw a jump in enquires from managers during the weeks after these freak events.

Bob Guilbert, managing director for products and marketing at Eze Castle Integration, highlighted most hedge funds were prepared for the disasters. “Most hedge funds were well prepared. We provided them with advance notice about all that was happening and told them the things they needed to do, such as dealing with power outages and checking remote connectivity to their data centres. We have seen more interest and the earthquake and hurricane really have highlighted the importance of having disaster recovery systems in place,” said Guilbert.

Despite this, he acknowledged more work needed to be done by some hedge funds. “A lot of hedge funds will have back-ups. However, recovering data from tape is not sufficient. Hedge funds need to ask themselves what they would do if their data centre was damaged or where they would recover the tapes to or how they would access their data and applications in a timely fashion,” he added.

During operational due diligence checks, many institutional investors often frown upon hedge funds, which only use tape back-up. Such systems frequently have a very low recovery point objective (RPO) and recovery time objective (RTO). If the RTO takes a while, especially in today’s volatile and uncertain markets, hedge funds could suffer significantly if they are unable to trade – particularly if they have large exposures.

“If a hedge fund cannot access data for – say three days – then that is a major concern. Even a four hour RTO is pushing things,” stressed Guilbert.