Linedata says that it has combined the risk analytics services of Riskdata with its Beauchamp portfolio management platform.
The agreement with risk management software firm Riskdata, headquartered in Paris, is Linedata’s first with a firm in that category.
One of the risk analytic services will offer end-of-day risk reporting, including pre-defined reports and covering value-at-risk, exposure, stress tests and other risk indicators. The second service will provide interactive risk analysis displaying risk allocation by strategy and position. The interactive risk analysis will also give fund managers with the ability to conduct real-time “what-if” simulations so that they can reevaluate risk on their portfolios before trading. Both risk services can be used for not only equities, but also fixed-income and swap contracts.
Embedding the Riskdata functionality and pre-calculated data service into Linedata Beauchamp will minimize clients’ data management overhead and avoid the need for custom integration with multiple data vendors, says Ed Gouldstone, Linedata’s head of hedge fund products strategy. The partnership with Riskdata also allows Linedata Beauchamp to address the needs of the institutional investors of its hedge fund manager clients.
The Paris-headquartered Linedata, best known for its order management and compliance systems, purchased the UK-based Beauchamp Financial Technology in 2005 for $19 million in cash; Beauchamp specialized in trading and portfolio management applications for alternative fund managers. The Beauchamp portfolio management platform now has 200 fund managers as users; most of those are hedge fund managers based in Europe and Asia-Pacific.
Hedge fund and other asset managers are facing increased pressure from regulators on both sides of the Atlantic to more clearly define the investment and other risks they undertake. Among the basic metrics which regulations such as UCITS IV, the Alternative Investment Fund Managers Directive and Dodd-Frank Wall Street Reform Act seek to understand are value at risk, exposures by currency, asset class, counterparty and region and the results of stress testing.
“We know from our hedge fund clients that the measurement and analysis of risk is an important part of their technology strategy,” says Gouldstone. “Partnering with Riskdata allows us to provide our clients with the tools to satisfy their increasing external risk requirements, while at the same time giving them the ability to manage risk intraday through the scenario and what-if- analysis offered by Riskdata.”
-- This article first appeared on Securities Technology Monitor.