Wesley Capital Management Moves Beyond Backup Tape
Wesley Capital Management brings business continuity online by
outsourcing disaster recovery to specialty IT provider Eze Castle
Integration.
By Anne Rawland Gabriel
June 30, 2008

http://www.financetech.com/featured/showArticle.jhtml?
articleID=208801742


Regardless of a hedge fund's size or type, none can afford to be off
line. "Investors increasingly want even the smallest funds to
demonstrate they're minimizing operational risks," emphasizes Sang
Lee, managing partner at Aite Group. "Events such as Katrina, the
Tokyo stock market outage in 2006 and last year's steam pipe rupture
in midtown Manhattan have all converged to make business continuity a
priority."

Further, reliance on backup tape for disaster recovery (DR) isn't
enough anymore. "A tape is nearly useless without the proper server
to put it on or if you can't get into your building," Lee points
out. "Even with appropriate hardware, it takes hours or days to
restore from tape. So investors now view tape as only part of a DR
strategy."

Of course, tape's limitations isn't the whole issue, notes Lee. "More
often than not, the person charged with [disaster recovery] at a
hedge fund has a completely different primary role," he
says. "Typically, such individuals lack the time or expertise to
develop and manage a complex DR system."

Naturally, enterprise IT providers have long offered solutions -- for
a price. "But smaller hedge funds may view enterprise players as
overkill," Lee says.

Fortunately, other players now are filling the gap. "Mid-level IT
firms with hedge fund expertise are adding DR to their offerings,"
Lee explains. "This includes redundant hot site facilities where an
exact copy of a fund's IT infrastructure is hosted."

Small Fish in a Big Pond?

Hiring your networking firm to double as your DR provider can offer
efficiencies, Lee adds. "If an IT shop has set up your network, they
know what hardware you're using, how it's configured, what the
connectivity issues are, which software applications are deployed,
etc. Then the question becomes: Do you want to be a small fish in a
big pond or a big fish in a small one?"

The circuitous DR journey taken by New York-based Wesley Capital
Management (WCM) is a case in point. Having attracted some large
institutional and international investors in 2005, WCM, which has
$1.6 billion in assets under management, was preparing to scale up
and move from shared space to its own facility. For technology
infrastructure, the fund sought a reputable 24/7 provider. With the
help of its prime broker, WCM selected an enterprise-class IT firm.

By early 2006 WCM had completed the relocation and hired Jennifer
Webster, a controller with on-the-job IT experience. "Unfortunately,
it became apparent that our IT provider wasn't a good fit," says
Webster. "Our network was unstable and the techs couldn't seem to fix
even the simple things that I could fix. And the support department
was a revolving door, so I was always hand-holding a new tech."

Not surprisingly, DR was put on the back burner. "Although an
institutional investor had required us to develop continuity systems,
stabilizing our production network came first," Webster
recalls. "After six months of headaches, I began looking for an IT
firm that would be a partner and not just throw product at us. But I
also wanted a provider large enough to be available when we needed
them at midnight."