Best Practices for Treasury Operations in Hedge Funds

In June 2025, Hazeltree hosted an invitation-only roundtable in London, bringing together treasury and operations leaders from some of the world’s leading hedge funds. The discussion centered on current challenges and emerging best practices in treasury operations, and how technology can serve as both a strategic and operational advantage.

The group shared candid experiences, revealing shared struggles and common priorities across firms of all sizes. Below are five key takeaways from the session.

1. Build vs. Buy: The Shift Toward Strategic Partnership

Several multi-billion dollar hedge funds at the table had experience building their own treasury technology, and most were quick to note the drawbacks. From the burden of maintaining custom code and staff, to managing investor and cyber diligence, the consensus was clear: building in-house creates as many limitations as it solves.

Critically, homegrown systems cannot execute payments, a core need for any treasury function. Many firms expressed a growing preference for partnering with a trusted provider who could offer robust functionality, controls, and continuous innovation, without the overhead.

2. Data Consolidation Is Foundational to Optimization

Nearly all hedge funds leaders in attendance cited challenges with fragmented and inaccurate data. The inability to access a consolidated view of treasury activity limits efficiency, accuracy, and the ability to act on insights.

Firms are increasingly seeing data consolidation as the first step toward broader operational optimization. With a centralized treasury platform, operational staff can shift from reactive processes to proactive management, boosting productivity, enforcing better controls, and even unlocking alpha-generating opportunities.

3. How to Justify a Treasury Management System (TMS)? Quantify the ROI

One of the most debated topics: When does it make sense to implement a treasury management system (TMS), and how can the investment be justified internally?

Firms are weighing platform and staffing costs against unrealized returns and missed efficiencies. The key is to quantify both tangible and intangible ROI, whether it’s reducing operational risk, avoiding settlement errors, improving staff productivity, or freeing up cash for yield opportunities. Hazeltree helps clients build the business case with benchmarking tools and ROI frameworks tailored to their fund’s profile.

4. Money Market Funds and the Case of “Lazy Cash”

The group acknowledged there’s often more that can be done to increase returns on idle cash, but a lack of visibility gets in the way. Without a centralized view of cash across accounts, funds struggle to act efficiently on short-term yield opportunities.

This insight underscores the importance of a single treasury platform with real-time cash visibility and integrated MMF capabilities. With the right tools, treasury teams can put every dollar to work.

5. Fund Expense Treatment: A Shifting Landscape

A lively discussion emerged around the question of expensing TMS costs to the fund. Many firms indicated this is becoming standard practice—provided it’s clearly outlined in the fund’s prospectus.

Legal counsel with expertise in hedge fund law confirmed that with proper disclosure, expensing treasury technology to the fund is acceptable. This shift could further strengthen the business case for adopting institutional-grade systems without burdening the management company.

Conclusion

The London roundtable reinforced that while every hedge fund’s treasury needs are unique, many face the same challenges: fragmented data, operational inefficiencies, and missed opportunities due to lack of visibility. The good news? Solutions exist.

Hazeltree is proud to support leading hedge funds as they evolve their treasury operations. Whether you're considering the move from build to buy, evaluating your TMS ROI, or simply seeking better visibility into your firm’s cash, we’re here to help.

→ Learn how Hazeltree can help you optimize treasury operations. Request a demo.