A rapidly growing segment of investment managers trade both derivatives and cash securities, reports Calypso Technology.
Calypso, a provider of cross-asset front-to-back technology software for financial markets, recently commissioned a survey that found derivatives use on the buy-side is increasing significantly. Nearly 45% of the 189 survey respondents reported an increase in foreign exchange (F/X) derivatives trading since 2008, and nearly 60% of that group trades daily or weekly.
At the same time, the survey showed that most investment managers find the situation challenging. Four in five respondents said derivatives cause them concern from both a risk management and an operations perspective.
“Low yields and increased volatility have driven investment managers into sophisticated strategies that require derivatives,” said Charles Marston, chairman and chief executive (CEO) of Calypso Technology. “This has put a strain on their legacy front-office systems as well as their trading infrastructure.”
In response, the company has launched the Portfolio Workstation, a multi-asset solution designed specifically for this group of investment managers. Calypso said that the application seamlessly integrates real-time portfolio and risk management functionality with its front-to-back trading and collateral optimisation platform.
The Portfolio Workstation is described as a real-time command centre that allows mangers to monitor their position values and risks, initiate trades, and perform what-if analysis. It also calculates both realised and unrealised gains/losses and allows managers to select custom benchmarks for accurate performance measurement.
In its latest report, the International Monetary Fund notes that many governments have eased up on austerity measures.
The US trading and exchange technology services group has set up a unit to make minority stake investments of up to US$10m.
Broker JLT Specialty saw a 60% increase last year in the number of merger and acquisition deals for which insurance cover was taken out.
A list compiled by the FT of companies with the strongest sales growth from 2012 to 2015 shows the UK capital ahead of Paris, Milan and Berlin.