Hedge Funds Are Doubling Down on Risk Management

In an era of heightened market volatility, macroeconomic uncertainty, and ever-evolving regulatory pressure, hedge funds are turning their attention to one of the most critical levers of investment success: risk management. The latest Beacon Platform 2024 Hedge Fund Survey reveals that firms are not just maintaining their current risk management frameworks, they are making substantial investments to level up.

Risk Management as a Strategic Priority

According to the survey, 99% of hedge fund executives plan to increase spending on risk management in the next two years, and more than half expect those budgets to grow by 20% or more. This emphasis is driven by a combination of external challenges, such as market volatility, and internal demands from LPs who now seek greater transparency and assurances that their capital is safeguarded by proactive risk management strategies.

Firms are moving away from treating risk management as a back-office compliance task and positioning it at the core of portfolio construction, operational resilience, and alpha generation. 

What’s Holding Risk Teams Back?

While risk management is rising in importance, many hedge funds report that their teams are currently bogged down by time-consuming manual tasks. According to the survey, 92% of executives feel they spend too much time consolidating and integrating data, 81% say they spend too much time on investment evaluation and due diligence, and 79% cite the burden of aggregating and measuring risk across various levels.

Tech-Led Transformation

This is where modern platforms like Intelligo come into play. Intellig​​o’s comprehensive due diligence platform automates the public record research process, combining proprietary AI with expert human analysis to deliver accurate profiles of individuals and companies at lower cost and faster turnaround time. By streamlining background checks and continuous subject monitoring, Intelligo helps hedge funds efficiently assess risk without overextending their internal resources.

What This Means for the Industry

The growing emphasis on risk management signals a maturing industry that recognizes the importance of resilience in long-term performance. As funds adopt more sophisticated systems and mindsets, we can expect:

• More agile responses to market shocks

• Increased investor confidence and transparency

• Closer alignment between investment teams and risk functions

• Accelerated adoption of integrated technology platforms

Risk is no longer just a downside to be hedged, it’s a dynamic variable to be understood, managed, and harnessed for strategic advantage.

Intelligo’s AI-assisted due diligence platform empowers hedge funds to scale risk assessments, accelerate due diligence, and uncover hidden exposures, all without draining internal bandwidth. Don’t let outdated processes slow your firm down. Schedule your demo today and see how Intelligo can modernize your approach to risk.