- $21.8 billion Point72 is in the middle of a massive project to become a cloud-first firm.
- The fund is one of several to invest heavily in the cloud as the industry embraces the tech.
- Point72’s chief technology officer Mark Brubaker walked us through the process and the firm’s goals.
Point72 is in the midst of a sweeping, multi-year overhaul to transform the $21.8 billion hedge fund into a cloud-first operation.
The five-year project, which is slated to wrap at the end of 2024, is aimed at migrating 70% to 80% of the hedge fund’s cloud-eligible applications to the new tech. Currently, 20% of this work has been completed.
The $21.8 billion fund is also re-architecting its entire tech stack; building out a team of at least 60 cloud engineers, infrastructure coders, and application developers; and solidifying a hybrid, multi-cloud strategy, Mark Brubaker, the chief technology officer, told Insider.
It’s “not just moving a couple of applications to the cloud — this is about fundamentally changing what we’re doing and how we enhance and build out our dev ops function,” Brubaker said. At the heart of that transformation is “shifting our culture to a cloud-first development culture,” he added.
A multi-cloud approach
Point72’s foray to the public cloud began in 2014 when the firm tapped AWS for portfolio managers to perform large-scale data analytics. But it wasn’t until mid-2019 when the fund started to fully embrace the cloud and adopt it “as a primary component of all Point72 technology operations” where appropriate, Brubaker said.
With the copious amounts of data used on Wall Street, more buy-side firms are buying into the tech. Shops like Millennium, Two Sigma, and AQR have pumped resources into the cloud and are using it to distinguish themselves in the battle for talent.
The decision to open up its tech stacks to the cloud brought Point72 to Google Cloud and Microsoft Azure, leveraging a multi-cloud approach.
AWS is still the primary provider — a decision driven directly by portfolio managers requesting it — with more than 50 PMs using the tech, Brubaker said.
Google Cloud is used in Point72’s core technology domain. Driven by the provider’s strength in big data and analytics, about 20 different projects are deployed in its cloud.
Azure has seen “the least experimentation and play,” Brubaker added, with the fund exploring virtual desktop capabilities.
Point72 will maintain some physical data centers for systems that need to be co-located near trading exchanges, require special hardware like GPU, or are extremely latency sensitive, he said.
Systems that have a large footprint that don’t easily translate to the cloud — such as a large settlement clearing system or trade management system — will also likely stay on-premise, he added.
Point72 has cataloged its applications to dictate migration
Point72’s migration project began about two years ago when it started to quietly hire cloud engineers and get buy-in from existing developers.
Throughout 2020, Point72 built a formal application catalog that serves as a blueprint for the migration and decision-making of what systems and applications go where.
“We’re focusing on what we call kind of like sub-ecosystems of applications, not just application by application, but how do you develop, how do you identify groups of applications where the majority of their communication happens within that sub-group?” Brubaker said.
The firm analyzed its entire application suite from front to back, the interconnectivity between those applications, and the data that is shared between all of them, he added.
The fund is wrapping up the catalog now, he added. Since most tech systems need to be rebuilt or upgraded every five years, Point72 is prioritizing moving the apps nearing the end of their tech life cycle first, Brubaker said. The initial tranche is slated to migrate by the end of 2022.
“The bigger question is, what do you do with those applications that aren’t going to be end-of-life for sometime?” he said.
And there’s still the question of how the push into the cloud affects the fund’s physical data center strategy, which Brubaker is set to finalize by year-end.
“Beyond that, we’ll kind of be steady-state and an operations mode where we’ll have a capability that will be part of our DNA and our culture and anything new that comes up will be migrated to its appropriate location,” he said.