Versor Investments Stays Ahead of the Curve, Running on AWS

Versor Investments (formerly ARP Investments) is a New York-based quantitative investment boutique focused on creating diversified sources of absolute returns across multiple asset classes. Specializing in leveraging statistical methods and vast datasets to drive every step of the investment process, the company was founded in 2014, when cloud computing was not widely used in investment management.

“Back then, firms in our industry were reluctant to go on the cloud due to security concerns and risks associated with migrating from legacy on-premises systems. The initial hype around cloud technology gave way to performance issues and less-than-impressive financial returns.” says Andrew Flynn, founding partner and chief operating officer at Versor Investments.

When Versor Investments was deciding on how to build its IT infrastructure, the conventional thinking suggested the development and management of its own on-premises server. However, given that systematic investment firms require significant computing power dedicated to data analysis and trading, establishing Versor Investments operations via this approach would have taken at least one year.

Nirav Shah, founding partner at Versor Investments adds, “Unlike other firms, we did not have any legacy infrastructure and we could immediately see the potential of cloud computing. Instead of building our own data center, we could test our trading strategies as long as we needed to, on demand, and if they didn’t work, we could simply shut it down and stop paying for the compute power used.”

The company consulted Amazon Web Services (AWS) and a Premier Consulting Partner on the AWS Partner Network (APN), and discovered that it could develop an accessible, scalable, and secure IT infrastructure with AWS, in under six months. Impressed by its potential, Versor Investments decided to build its infrastructure on the cloud. This made the firm a pioneer in the investment management industry, as one of the first hedge funds to completely run on AWS.

Versor Investment trades across Asia, Europe and North America, and its team provides round-the-clock coverage for trading and operations. Hence, it was crucial for the company to set up an IT infrastructure that is secure, holds high computing power, and is easily accessible across multiple offices.

Thanks to AWS’ global presence, the company benefits from a unique IT setup, in that its development, production and disaster recovery (DR) environments are located across the US and Europe. This allows for seamless daily data transfers and availability across the environments.
 
This setup was made possible by leveraging tools provided by AWS such as Amazon Elastic Compute Cloud (Amazon EC2) and Amazon Simple Storage Service (Amazon S3). To conduct its daily trading and data analysis, Versor Investments launches multiple Amazon EC2 instances daily. The company further streamlined the process by creating scripts to automate its workflow. Today, it can automatically scale up and down computing power, as needed, as well as store its daily Amazon Machine Image—which provides information required to launch an instance—on Amazon S3. This allows for robust back-ups and easy recovery of EC2 instances in the event of a disaster—an important feature to ensure that the company can continue operating in the face of disruptions and not lose out on any trading opportunities.

For a stronger security posture, Versor Investments used Amazon Virtual Private Cloud (Amazon VPC) to create a virtual network that can be configured to meet the security requirements of the company. Within Amazon VPC, the company has created private subnets with strong security controls, which minimize the likelihood of security breaches. It also leverages multi-factor authentication features provided by AWS, for enhanced security.

Deepak Gurnani, managing partner at Versor Investments, says, “Going on the cloud has allowed us to operate with a peace of mind. With AWS, we’ve never had to worry about security and its impact on our operations. AWS provides us with the tools to automatically and continuously secure our servers and data, allowing us to focus on what we do best—researching, investing and trading systematic alternative investment strategies.”

When the global pandemic prompted a lockdown, Versor Investments faced minimal disruptions to its operations. It seized the opportunity to accelerate plans to go all-in on AWS, in order to make its business more resilient to external risks, such as the pandemic.

To run and test algorithms, the company used a desktop-based integrated development environment (IDE). Given its successful journey on the cloud thus far, it turned to AWS to ease its team of developers into virtual working arrangements.
 
Using Amazon WorkSpaces, AWS helped to seamlessly provision virtual desktops to Versor Investment’s developers—retaining all the desired IDE configurations—within minutes. Additionally, as Amazon WorkSpaces is deployed within AWS Virtual Private Network (AWS VPN), critical business data and systems remain secure and available for processing in the AWS Cloud. This transition was testament to Versor Investment’s foresight, which according to Shah, was the belief that there is no need for on-premises servers.

Furthermore, the company now automates data transfers between the production and development environments using AWS DataSync. The process is robust and takes up to 30 minutes, down from 90 minutes previously.
 
“Given the successful implementation of our infrastructure on the cloud, we were confident that AWS would be able to help us operate seamlessly during the global pandemic. By going all-in on AWS, we have improved the experience and productivity of our teams with no disruptions to our operations.” says Shah.

Versor Investments always has its eyes and ears on the ground. Just as it saw opportunity with cloud technology on AWS, the company stays attuned to industry trends to identify untapped opportunities for business growth.

Gurnani concludes, “For the financial services industry, the next opportunity is in alternative data and we anticipate our data volumes to grow tremendously over the next few years. Integrating data lake solutions, such as those provided by AWS, will play a key role in supporting our growth in this area and ultimately, our ability to deliver superior investment products to our customers.”