International Fund Services

Hedge Fund Administrator Cuts Costs, Boosts Performance, and Improves

International Fund Services (IFS), a State Street company, provides comprehensive fund accounting, fund administration, and risk services to hedge funds, private equity funds, and offshore funds. IFS is part of the Alternative Investment Solutions group within State Street — the world’s leading provider of financial services to institutional investors, with $12 trillion in assets under custody and $1.4 trillion under management as of December 31, 2008. IFS was named “Best Overall Hedge Fund Administrator” in 2007 and 2008 by The Hedge Fund Journal.

Customer Challenges

Standardize the IT environment and simplify IT management
Improve system performance and scalability
Maintain high availability
Reduce power, cooling, and space requirements

Solution

To simplify IT management and reduce electricity and other costs, IFS replaced older Sun servers with Sun Fire T2000, SPARC Enterprise T5220, and SPARC Enterprise T5240 servers. It will also soon deploy Sun SPARC Enterprise T5440 servers. Virtualization through Logical Domains (LDoms) and Solaris Containers helped consolidate hundreds of physical servers, and the high performance of CoolThreads technology offers the computational capacity to scale with ongoing business growth.

Business Results

Cut average time for processing trades by one-third
Achieved 100% system uptime
Lowered power consumption by 30 kVA
Reduced the total number of physical servers from 320 to 40

Products and Services

Story Details

Within the world of investment servicing, hedge-fund administration ranks among the most demanding for IT operations, given the rapid growth of hedge funds in recent years and their increasingly complex processing challenges. For nearly 15 years, International Fund Services (IFS) — a State Street company since 2002 — has successfully met these challenges. Today, it ranks as the industry’s second-largest hedge-fund administrator, according to a November 2008 survey by HFM Week.

By building and maintaining a proprietary hedge-fund platform, IFS’ developers and operations specialists can respond quickly to changing client demands. Over the years, Sun servers have been a key part of that platform and of IFS’ overall IT infrastructure. In mid-2007, IFS wanted to upgrade its hedge-fund platform to increase computing capacity, boost processing speed, improve reliability, and free up space in the company’s datacenter. “As a result of our firm’s success and continued demand for our services, we were faced with a challenge in IT to keep up with a rapid pace,” says Robert Lampietti, senior vice president and chief technology officer of State Street’s Alternative Investment Solutions group, which includes IFS. Specifically, the company needed to replace older servers that support its Sybase databases and a variety of internally developed fund-management applications. These servers included 20 Sun Fire E15K, V1280, and 6800 servers and more than 300 Sun Fire V240 servers.

Working with its IT partner New London Associates (NLA), IFS chose high-performance Sun CoolThreads servers that are based on Sun’s open-source chip-multithreading (CMT) technology, running the Solaris 10 Operating System. This decision followed an extensive evaluation of systems from several vendors, including IBM Power Series running AIX, HP systems running Linux, and Windows Server–based systems.

" We’ve had 100% reliability from all our Sun CoolThreads servers — no down time associated with any operating system issues or hardware failure — and we’ve exceeded all of our service-level agreements. "

— Robert Lampietti , Senior Vice President and Chief Technology Officer, State Street Alternative Investment Solutions

IFS began a phased deployment of a total of 40 Sun servers, starting with Sun Fire T2000 servers followed by Sun SPARC Enterprise T5220 and T5240 servers. The T2000 servers are used primarily in IFS’ development and testing environments; the T5220 servers operate in the production environment as database servers; and the T5240 servers function as application servers. IFS will also deploy an additional 10 Sun Fire T5440 servers in the next several months. The solution is backed by an enterprisewide SunSpectrum Service agreement.

Thanks to Sun CoolThreads technology, IFS’ 40 new servers consume much less space and 30 kVA less electricity than the approximately 320 older units they replaced. “We selected the Sun solution because it exceeded our requirements to shrink our electric power footprint,” says Lampietti, “and because it required less air conditioning and physical space. Although some competing vendors’ chips were faster, the busses on the Sun systems had much higher throughput. NLA proved invaluable to us as a consultant and trusted advisor for their overall knowledge and their specific expertise on Sun solutions, as well.”

The new application servers take full advantage of Logical Domains (LDoms) and Solaris Containers virtualization technologies. The choice of running an application in a logical domain versus a container is determined by the application’s system requirements. IFS is using custom software from NLA to help manage its virtualized environment. “Building partitions and containers is very simple, and they can be easily managed at the software level without having to reboot anything,” says Lampietti.

David Simon, cofounder and managing director of NLA, adds, “When we optimize the configuration of a particular machine, we need to be able to roll that standard configuration out across the environment to as many machines as we want. Sun’s CoolThreads servers and virtualization technologies lend themselves very well to this type of nearly effortless duplication, resulting in a highly scalable environment that’s easy to support.”

IFS is also impressed with the speed that its new servers deliver, resulting in better customer service. Lampietti says, “Our clients expect their trades to be processed right away. After moving our transaction processing engine to the new Sun servers, the average time to process a trade fell by about one-third.”

Regarding system reliability, he adds, “We cannot afford to be down even for a few minutes. We have very tight cycles for verifying, reconciling, and reporting on all the transaction data that comes in. We feel Sun offers very cost-effective and reliable servers to support this high level of service. You can leave Sun hardware running for years and years without having to worry about it.”