With the global financial crisis placing a greater emphasis on risk control measures at asset management firms, many low-cost systems providers are now coming to the market with sophisticated technology that was once inaccessible to smaller mid-tier hedge funds, a roundtable hosted by Cuttone & Company and Aite Group, heard on Monday.

Risk management technology is becoming essential to smaller and mid-tier hedge funds, and is now a key part of prime brokerages' suite of offerings, the roundtable heard.

Meanwhile, the current hedge fund regulation which is up for debate in Congress, is also creating a demand for medium-priced risk control products.

"Firms need real-time risk management across multiple asset classes. If they have a desire to grow, they have to bring the technology on board. Firms have started to source out technology so small hedge funds can look like real brokers," said Keith Bliss, senior VP, director of sales & marketing, Cuttone & Company.

Cuttone, a New York-based full-service institutional broker, is itself using Nirvana solutions.

"We have built a super-domain. We can see every account, every execution in real-time. It allows us to sleep a whole lot better at night. And the technology allows us to scale our business," said Fredrick Scuteri, senior VP, prime brokerage services.

In the meantime, as the dust settles from the global financial crisis, bulge bracket brokers that left the mini-prime brokerage industry looking to work only with safe, large hedge funds are now clamoring again for a piece of the mid and small-tier asset management market, he said.

"A lot of small prime brokerages don't have good execution. Firms in the mini-prime brokerage space will consolidate, partner up or be bought by larger firms," Scuteri added.

Denise Valentine, senior analyst at Aite Group, also said that some mini-prime brokerages could soon start diversifying their business, finding new opportunities in offering legal advice or in business processing outsourcing.