Hedge funds and private equity are some of the common investment opportunities that individuals can use to spread their risks. The problem is that these investments are vulnerable to risky aspects as most of them are managed through computer software. Cybersecurity is an issue of concern when managing these types of investment plans. The primary aspect behind these investment opportunities is ensuring that there is sufficient security that can prevent any form of infiltration and manipulation of data and the systems holding this information. Agio, one of the financial service institutions highlights that it is important to invest in hedge funds as they are more secure as compared to private equity firms.
A huge number of individuals are not attracted to hedge funds as they feel that hedge funds are counterintuitive in nature due to more data, complex systems, more cash movements, and more transactions. A considerable number of people have a perception that these complexities lead to a situation where hedge funds become vulnerable. Contrary to popular belief, Agio asserts that there are other multiple factors that play a vital role when it comes to the security of an investment, some of which have been discussed below.
Geographical and data surface area is an important aspect when it comes to the security of both hedge funds and private equity. With private equity, managers and other individuals associated with the investment have to move from one geographical location to the other to monitor the projects. This makes it hard to predict the path and data locations. When it comes to hedge funds, there is not movement, which makes it easy to predict the patterns and the data that will be accessed in a particular period, probably a year.
Another factor that makes hedge funds the best alternative for investment is the availability of the traditional security enterprises. The on-premise physical security is guaranteed. However, this is not the same for private equity and private equity data. Agio offers the on-premise physical security that reduces these vulnerabilities. Most of the firms that manage private equity use much hardware such as laptops and tablets to protect data.
In one way, this is a strategic measure of enhancing data security. On the other hand, having many consumer devices makes the data to be much vulnerable to cybercriminals. It is also difficult to manage many consumer devices, which gives cybercriminals a chance to infiltrate the entire system. Therefore, physical security is not very important when it comes to the protection of financial investments.
Agio suggests that hedge fund cybersecurity is very strong and difficult to penetrate because most of the hedge fund systems have been structured to only work with structured data. Structured databases contain specific and well-defined terms such as position and trades, which makes it very easy to protect them. Agio offers solutions for the unstructured databases which can easily be replicated or manipulated by cybercriminals, often found in private equity firms. Simple and unstructured documents such as PowerPoint slides, Excel Spreadsheets, and Microsoft Word documents can easily be manipulated. It is common knowledge that structured data can easily be secured as compared to unstructured data.