New York, NY, USA
September 20, 2006
Trends
in Asset Management Trading Technology
Report Published by Celent
Asset managers and hedge funds grapple with the new and improved
trading environment.
What a journey it has been in front office
trading over the last five years—from automated work flow routines to
sophisticated algorithmic trading, from locomotive to bullet train speed,
from phone-savvy traders to electronic trader gurus. The latest evolution
of execution management systems is reconfiguring traders’ desktops,
packing in more tools and options. More choices, with vendor introductions
from overseas and new product launches, are still afoot. The upside for
the asset manager is tremendous since the degree of autonomy is
significant and long-awaited. The downside is multiple systems, a change
in required skills on the desk, and a rapidly changing environment in
market structures and regulation.
Technology and trading divisions of firms
are posing questions around near-term and future needs. In a new report, Trends
in Asset Management Trading Technology, Celent looks at some of these
questions, which include: Do we still need
multiple trading systems, or can we consolidate? Do we need an OMS or an
EMS, or both? Has our trading vendor kept up with functionality upgrades?
Are there newer systems on the market that better align with our
anticipated use of multiple asset classes and our organizational
structure? Are our vendor contracts in line with prevailing market prices?
However, even with all this change, global
spending will grow at a slower pace over the next few years. Prices have
declined, and there is some market saturation. A compliment to the wide
variety of systems and price points available, vendor consolidation, will
likely continue as well as client consolidation. Total global spending by
asset managers on trading systems will grow from US$634 million in 2006 to
US$757 million by 2010, an average annual growth rate of 4.6%
"Progressive
technology vendors will garner greater market share as investment firms
seek to streamline costs, work with fewer vendors, and capitalize on
functionality upgrades. In the US, firms will look to benefit from vendor
consolidations and new product launches with an eye toward streamlining
the trading desk.” says Denise
Valentine, senior Securities & Investments analyst and author of
the report. “In Europe and Asia, life on the desk is somewhat more
simplified with centralized liquidity venues, larger orders, but less
automation overall. Nonetheless, the algorithmic programs, direct market
access, and analytics tools are no less valuable, and interest is rising.
The next wave of infrastructure change relative to trading technology will
occur in these markets."
This report discusses trends in trading technology
as well as the typical investment management front office technology
framework. Numerous vendors are cited to orient the reader to the popular
providers and their orientation.
The 36-page report contains five figures and seven
tables. A table of contents is
available online.
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