In recent years, the global financial industry has seen a significant increase in regulatory and market constraints around the management of cash, liquidity, and collateral. And with interest rates rising, the opportunity cost of failing to optimise these factors continues to grow. At the same time, many alternative asset managers have been struggling with handling the increased complexity of operations. The need for robust treasury and liquidity solutions has never been more important, and a new breed of FinTech service providers is developing technology-centric solutions to help businesses adapt and thrive in this new environment.
Headquartered in New York with offices in London, Bournemouth and Hong Kong, Hazeltree is leading the way in treasury and liquidity management technologies for the traditional and alternative asset management industries. The company’s innovative, cloud-based solutions transform how investment firms manage their market and capital activities, empowering them to unlock additional value and improve operational efficiency while strengthening internal controls and managing risk.
Hazeltree focuses on innovation, optimisation, connectivity, and automation to help clients achieve operational excellence and mitigate risks. These treasury and portfolio finance solutions serve private equity, hedge funds, asset managers, private debt, real-estate investment, venture capital, pensions and endowments, and their service providers.
Chief Strategy and Product Officer Sol Zlotchenko joined Hazeltree in 2016, drawing on more than 20 years of software industry experience and extensive financial technology and hedge fund expertise. Today, Sol Zlotchenko leads all aspects of strategy and product direction, for Hazeltree’s treasury and liquidity solutions.
Zlotchenko’s appointment came at a crucial time. His expertise in building innovative FinTech products and scaling development organisations was an essential part of the company’s plans to take its products to the next level. What’s more, his ongoing leadership is also important in evaluating cutting-edge technologies such as Machine Learning, Algorithmic Optimisation, and Big Data.
FinTech is here to continue leading the charge
Zlotchenko, who has previously built and scaled companies from launch to product delivery, received his Bachelor of Science and Master of Science degrees in Electrical Engineering from Columbia University in the United States. Prior to joining Hazeltree, Zlotchenko was Chief Technology Officer of investment management solutions provider Paladyne Systems, which he co-founded in 2005 and was integral to its global growth until it was eventually acquired by Broadridge Financial Solutions in 2011. Prior to Paladyne, Zlotchenko worked as an investor, executive, and software developer at a number of high-profile financial firms, including Goldman Sachs and Alexandra Investment Management.
“I started out back in the 1990s when the internet was just exploding,” explains Zlotchenko. “I lived through the technological Wild West in those days while being part of the technology and the finance industry, and watched it transform into an advanced and disruptive industry called FinTech, which has been very exciting. It's part of history now but still evolving and developing. FinTech is definitely here to stay, disrupt and continue leading the charge.”
In the past, many companies would manage large amounts of money on spreadsheets, a practice that still exists in some cases today. But an epiphany came with the continuous influx of large capital and ever-increasing investment complexity, says Zlotchenko, a ‘Eureka!’ moment happened when the industry could not support itself and its growing capital flow relying solely on humans.
“That’s when digital transformation happened in the industry, and Hazeltree found itself in the right place at the right time,” says Zlotchenko. “So we have committed ourselves to financial industry and have grown along with its needs and built products by partnering with insiders which really helped our clients along the way. The change and innovation is still happening at fast pace, and we're hoping for a lot more development in the industry especially on the private equity side of the sector.
“We’re seeing transformations,” he explains. “Some of the big hedge funds are expanding into private markets such as private equity, private debt real estate, and there's active cross-pollination going on in many areas where different creative strategies are being employed, and new investment opportunities are being uncovered with aid of advance technologies such as AI/ML and Big Data Analytics. We are also seeing new asset classes such as Cryptocurrencies coming into focus with global asset management community that require even deeper understanding and investment into technology “
The pandemic and geopolitics have introduced a great deal of volatility and uncertainty, while technology, with the introduction of tools and services – including proliferation of algorithmic trading and quantitative models – has come to dominate the sector. Meanwhile, the private equity sector is growing as it generally attracts more stable investments than those made by hedge funds.
“Technology is a big factor,” says Zlotchenko. “Historically, hedge funds were very hungry for technology and relying on it even before FinTech was FinTech. Between trading, data management, risk management and accounting, everything is driven by technology.”
Trillions of dollars require highest performance levels in data management
Hazeltree’s community of private equity, debt and real estate funds, hedge funds, and asset managers, collectively manage over US$2tn in client assets, which requires the highest performance levels in data management and insights.
The company’s robust framework allows data management through advance technology, resulting in an added degree of control and flexibility for both long- and short-term activity, as clients benefit from broader access to a diverse pool of aggregated, global, multi-asset class financial data.
Hazeltree’s services enable fund managers to explore one of the largest alternative investments securities finance data sets on the market with detailed analytics and charting. Users can access and search data across a deep pool of global securities to explore the best execution rates and liquidity metrics, overlaid with external price and utilisation data points. And fund managers can gain unique market colour and rate transparency across counterparties. Using automated workflows, data repositories in consistent formats, and daily-delivered data, fund managers can efficiently manage rates, re-rates and opportunities to borrow/lend on the short/long side of the portfolio, as well as reduce counterparty risks.
The company’s Public Markets solution is a purpose-built Treasury and Portfolio Finance platform that aggregates cash, collateral, margin, securities finance, and rates data across all counterparties into a central normalised platform, enabling optimal funding, collateral allocation and borrow/lending decisions. Hazeltree’s independent agreement-based internal view reconciles counterparty data, highlighting breaks, while minimising risk exposure and optimising fees. An integrated workflow and execution engine streamline treasury operations functions.
Hazeltree’s Private Markets solutions are adapted for the unique needs of Private Equity firms and other managers of Private Market assets. Not only is the advanced suite of Cash and Payment Management solutions tuned for Private Markets, but other parts of the Hazeltree platform have been developed by industry insiders specifically for Private Markets.
These include Liquidity Management framework that aggregate all liquidity sources such as cash, money markets, credit facilities, and investor commitments, manage liquidity forecasts along with current liquidity, execute liquidity workflows, present liquidity assets and liabilities, facilitate what-if scenario planning, and suggest actions generated by Hazeltree’s optimizer algorithms.
The Private Markets platform also covers Debt Management, enabling clients to manage debt and credit facilities to streamline liquidity usage and serves as a Loan Portfolio Management tool, equipped with loan position management, shadow accounting, transaction execution, and algorithmic operational loan portfolio task management.
Another important need for Private Markets in particular is management of Legal Entities. Funds need a single golden source of all legal entity structures and their relationships. The Hazeltree system has been designed to facilitate critical processes such as cascading cash payments, and the dynamic generation and communication of various types of Investor Notices such as capital calls and distributions to Limited Partners.
Liquidity Management is not a new term in the industry, but it has a different meaning in Public and Private Markets. While Hazeltree Public Markets tools assist in managing portfolio liquidity through data transparency in securities finance - as well as OTC collateral and cleared margin - the platform’s true innovation really shines in Private Markets liquidity management. Private Equity funds in particular have identified Liquidity Management as the goal in the ability to scale, and this cannot be done without advanced technology. Private Market funds need to balance and optimise their liquidity with just-in-time precision while identifying investment opportunities and generating IRR
Public Markets-focused asset managers and hedge funds can access Hazeltree’s diverse pool of aggregated global multi-asset class portfolio finance data, locate securities, compare rates, and select shorting opportunities. Hazeltree helps understand true treasury and portfolio finance P&L by actively manging collateral, providing OTC margin analysis, allocating borrowing costs to individual strategies, managing short positions across prime brokers and tracking pre-borrow inventory. Clients also benefit from transparency, automated analytics, reduced risk and exposure, and greater performance opportunities.
Hazeltree’s Private Equity Platform is an industry insiders-built treasury and liquidity management solution which provides cashflow and forecasting management including improved workflow to manage cash, payments, credit facilities, liquidity, legal entities and capital activities. Users benefit from operational efficiencies and advanced controls, reduced risk and exposure and advanced optimisations to identify greater performance opportunities.
New UK centre helps meet treasury and liquidity management needs
Hazeltree opened a new FinTech engineering centre in the UK’s growing coastal tech hub of Bournemouth in November this year to help meet the increasingly more complex requirements of clients worldwide. The new centre is part of the company’s expansion strategy and designed to support growing demand for its unique cloud-based FinTech solutions.
The centre will be staffed by software developers, product managers and owners, as well as DevOps and client services professionals focused on designing, building, and onboarding new clients onto Hazeltree’s FinTech solutions. The building is located close to The Triangle in the vibrant heart of Bournemouth and is a Grade II listed building and architectural landmark originally built in the 1800s and has undergone extensive renovation. With the capacity to accommodate up to 70 employees, Hazeltree expects the new centre to be well over half full by the end of 2022.
“We are pleased to unveil our new engineering centre, which marks a significant milestone in our growth strategy,” says Tushar Amin, President and Chief Executive Officer of Hazeltree. “The centre will be instrumental as we continue to expand our client base and develop new products to meet the mounting treasury and liquidity management needs of financial institutions across the globe.”
Zlotchenko says the company is very excited about its new facilities, which will help take Hazeltree from strength to strength while further enhancing its best-of-breed treasury and liquidity management FinTech capabilities at a time of increasing complexity in global markets.
“As regulations continue to reshape the financial industry, we continue advancing our products to help our clients manage this disruption, identify unrealised alpha opportunities as well improve operational efficiencies around managing cash and collateral,” says Zlotchenko. “Our mission is to help our clients efficiently manage their counterparties with a comprehensive and transparent view of the market.”