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Asking all practitioners in this forum...may i know what are the different software tools used by hedge funds.

Lots... Really, depends what for. On the most basic level you need a portfilio management tool. Some basic funds use Excel, some use in-house stuff, whatever is provided by Prime broker (eg LineData and UBS, Goldman offer something (quite simple)), some use Beauchamp, some use Sunguard, some use Fund Admin stuff (Citco). Lots of options. Not to mention trading and risk stuff too, where some of the primebroker stuff can do management stuff. Its all a very big area...Ask/PM me if you want details on specific pieces of software, we took a long look into these quite recently...

Last year I spoke with a Top 10 (by size) hedge fund manager who ran techical based automated trading systems. Anyway, I assumed theyused highly optimized algorithms/distributed systems etc but it turns out they used Delphi almost exclusively.

Dr Ben, can you explain us better what exactly is the WebCab Components you´re advertising in your disclaimer? Saw your website, it looks extremely cool but haven´t fully understand your purpose.

Software which handles accounting for customer accounts tends to be specialized for the unique MTM (mark-to-market) requirements of hedge funds. While customer accounting can be integrated with the software which manages the portfolio for each fund, it is still a rather different bit of functionality. HF's traditionally had lockup intervals followed by periodically scheduled times when all customers could add or remove investments. This originated as a practical solution to the difficulty of MTM'ing the accounts of different customers whose investments entered the HF at different points in time. The current state of the art in customer accounting is now capable of allowing different customers to enter or leave the HF at a time of their own convenience. Whether HF's now allow customers to exploit this new flexibility is a matter of policy, or else whether they choose to buy such software. Customer account MTM'ing is different functionality from portfolio MTM'ing, though the former needs to factor in the latter. Customer account MTM'ing should be relatively objective depending upon the policies of the firm. Portfolio MTM'ing can be more subjective, especially for less liquid investments (i.e. non-securitized, non-publicly-traded, private-equity-placements, etc)A rough analogy of HF customer account MTM'ing is when MF's calculate their NAV per share at the end of each day. When a customer puts into the MF, their investment is divided by the NAV to calculate the number of MF shares their investment is worth. Then, as the MF experiences gains & expenses, this is reflected by changes in the NAV. When the customer liquidates their investment, their number of shares is multiplied by the new NAV to see how much cash they get. MF's/HF's with only liquid investments can have a simpler time of converting customer money to/from fund 'shares' since they can buy/sell an appropriate basket the next day. (If a basket is so large as to need to be iceberg'd, then the customer investment can be immediately monetized with derivatives, which can then be unloaded as the underlying is transacted over time.) Less liquid portfolio constituents take more time to monetize or liquidate. While a customer's funds pending conversion into or out of illiquid porfolio constituents, the portion of their account sitting in cash/MM's is an asset not participating in the gains or losses of the portfolio. This raises the question of how to account for the timing of monetization of that customer's investment into an appropriate number of shares so as to appropriately allocate their fair share of gains/losses in the overall portfolio.---------------------------------------------------Then of course, there is the approach of sticking the losing constituents of a portfolio into the accounts of customers who choose to liquidate at inopportune times, as understood to have been done by at least one loud-mouth HF ex-mgr who is now seen on TV.

Good points kc, but what you're talking about is basically on the accounting side. Something which will be done by the fund Administrator - someone like Citco, GlobeOp or PFPC. They have software such as the Geneva suite of products from Advent - but my impression of the question is actually more down to what the fund uses. Many funds sure will try to mirror the admin's setup for their own purposes and checking, but the fund itself will be more interested in performance, attribution, and other indicators (analytic or whatever), dependant on the nature of their strategy.IMHO, a good piece of HF software is modular, would enable traders to trade, researchers to research and put down ideas, managers to view stats, risk ppl to minitor, likewise with compliance - finance to account etc... Unfortunatley - I am yet to see i pieice of sofwtare that can do all of this. Sunguard isn't bad, but too expensive, and all of their modules don't integrate as well as you'd imagine they should. I have oponions on quite a few pieces of software, but i'm not going to start slagging them off here (because with EVERY bit of HF software - there is something which needs sorting out)