Migrating to a new Order Management System (OMS) or Portfolio Management System (PMS) is never a decision taken lightly by hedge fund COOs or CFOs. Many firms initially try to make do with what they already have.
However, sticking with the status quo can hold back growth and increase risks. Beyond operational inefficiencies, there are significant hidden costs: highly skilled Operations and Accounting professionals spend time building and maintaining workarounds instead of focusing on value-adding activities. These fixes become expensive in terms of both human capital and continuity risk, creating dependencies on a handful of individuals while distracting the firm from its true mission—delivering Alpha.
For the $198.4 billion 1 Asia-Pacific hedge fund industry to scale further in today’s demanding environment, managers must ensure they are working with the right OMS/PMS platform—even if it means switching providers.
The Hidden Price of Standing Still
Continuing to operate on outdated or unfit systems can erode both performance and perception. The costs may not be immediately visible, but they compound over time:
- Operational bottlenecks: slower trades, settlement failures, and costly errors.
- Hidden personnel costs: expensive staff stuck in repetitive, low-value manual oversight.
- Key-person dependencies: business continuity risk if workaround knowledge sits with one or two individuals.
- Investor perception risks: failed due diligence or lack of operational credibility in front of prospective allocators.
Ultimately, doing nothing may prove far more expensive than making a change.
Why Migration Is No Longer the Risk It Once Was
Traditionally, replacing an OMS/PMS was considered a last resort. The costs, operational complexities, and heavy customization required—combined with integrations into existing systems—were simply too daunting.
The perception that PMS migration is too risky or complex is rapidly disappearing. Migration is now easier to execute, provided firms choose quality providers. Hedge funds are increasingly exploring alternatives—seeking platforms better suited to new or niche investment strategies, rising AUM, or simply as a response to steep and unjustified fee increases from legacy providers.
More firms recognize that tolerating a poor OMS/PMS platform creates hidden costs. Weak systems can trigger settlement failures, errors in Net Asset Value (NAV) calculations, or leave firms exposed if providers underinvest in cybersecurity or resilience. But perhaps more critically, inadequate platforms force teams to expend significant resources on manual oversight. The need to continuously patch processes, reconcile reports, or build custom spreadsheets ties up valuable staff in non-Alpha tasks—while also introducing key-person risk if knowledge of these workarounds resides with a limited few. This is no longer just an ‘operational issue’; it is a material drag on cost, efficiency, and the ability to scale. Ultimately, doing nothing may prove more expensive than making a change.
At the same time, capital raising remains difficult. While some institutional allocators are increasing exposure to Asia-Pacific funds, they often favour large, established managers. With too many funds chasing limited capital, allocators demand more than just performance—they scrutinize operational robustness.
In this environment, even minor deficiencies in systems can lead to failed due diligence. To differentiate themselves, managers must ensure their OMS/PMS platforms operate seamlessly. If not, switching may be the smart move.
What to look for in a modern OMS/PMS
Before migrating, managers should confirm that potential providers meet several essential criteria:
1) Frictionless onboarding
Flawless onboarding is critical to maintaining business-as-usual during what can be a risky transition. A strong provider will offer specialized onboarding teams, advanced data migration tools, regulatory expertise, clear communication protocols, and robust contingency planning.
2) True Scalability
If a hedge fund intends to grow, its platform must scale accordingly. Systems that cannot handle increased volumes may force another costly re-platforming exercise down the road.
3) Multi-asset class support
As funds expand into private markets and other complex strategies, their OMS/PMS must seamlessly support a broad range of asset classes.
4) Real-time risk and compliance management
In increasingly volatile markets, monitoring exposures in real—or at least near real— time is non-negotiable. Real-time oversight is critical for maintaining performance and reassuring investors.
5) Automation and integrations
Automation is vital for efficiency. Managers should ensure their platforms integrate seamlessly with fund administrators, prime brokers, and other critical providers, enabling end-to-end process automation and reducing operational costs.
How the right platform unlocks growth
The right OMS/PMS platform can be the difference between stagnation and growth. It enables firms to scale, diversify, and win new mandates by presenting a professional, operationally sound front to investors. Just as importantly, it frees highly skilled professionals from the burden of manual workarounds and redeploys their time toward activities that truly differentiate a manager in the market: generating Alpha
Crucially, migration is no longer as resource-intensive as it once was. That said, large or complex hedge funds should avoid “big bang” transitions. A proof-of-concept approach, followed by phased implementation, is a safer path to mitigating risk during the change.
For hedge funds to thrive in the years ahead, strong investment performance alone will not be enough. They need a best-in-class OMS/PMS platform working behind the scenes to support their ambitions - so that technology shoulders the operational load while human capital is focused squarely on delivering investment returns.
Strong investment performance is table stakes. The firms that win capital and scale over the next decade will be those that pair returns with resilience, operational excellence, and institutional-grade platforms. Technology is no longer the barrier — but delay may be.
1 Broadridge Global Market Intelligence data