Portfolio Analytics and Risk Management Solutions for the Buy Side

Storm-Proofing for Growth and Resilience
by Cubillas Ding, March 5, 2014
Product Trends/ Reviews
Global

Abstract

Next-generation portfolio and risk solutions are capturing a larger share of the value chain in order to achieve greater alignment, collaboration, and convergence between front office investment functions.

In the report Portfolio Analytics and Risk Management Solutions for the Buy Side: Storm-Proofing for Growth and Resilience, Celent examines current and emerging solution capabilities for next-generation portfolio and risk systems.

Asset owners, asset managers, and service providers are demanding robust risk management systems to achieve a total view across broader asset classes to increase diversification and transparency into investment performance and risk characteristics, while the industry employs more sophisticated investment strategies to limit downside risks and enhance returns.

At the same time, ongoing changes in investment approaches and how portfolios are constructed will require fund managers to move towards true multiasset portfolio and risk solution capabilities based on a consistent portfolio construction and risk analysis framework, and to address operational limitations to handle multiple strategies: active, passive, quantitative, and/or blended.

In response, vendors have made significant movements in the value chain of investment and risk management. Most vendors are attempting to expand outside their traditional positioning due to the need for greater alignment, collaboration, and convergence between front office investment functions and middle office / enterprise risk management. Investment management firms are also driving efforts to consolidate systems to achieve a consistent view of risk between front and middle offices.

“Next-generation portfolio and risk solutions are likely to exhibit strong, hybrid competencies to deliver integrated portfolio and risk analytics, which align CIO and CRO activity chains,” says Cubillas Ding, Research Director with Celent’s Securities & Investments Group and author of the report. “Although the change is slow, we expect the tradeoffs that buy side investment and risk operations have to put up with will eventually be less pronounced.”

This report is the second installment of a series on portfolio and investment risk practices, technology, and operations. The study analyzes and ranks 12 vendors and their buy side solutions for portfolio and risk management featuring Celent’s ABCD Vendor View, which presents a comparative view of the vendor marketplace that visually represents four elements: Advanced technology, Breadth of functionality, Customer base, and Depth of client services.

The vendors profiled in this report include: Axioma, Barclays POINT, DST Global Solutions, IBM Algorithmics, Misys Sophis, MSCI Barra/Riskmetrics, Northfield, Quantifi, S&P Capital IQ, State Street, SunGard APT, and Wilshire Associates.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

Business and Technology Drivers

2

Portfolio and Risk Systems: Assessing the Spectrum of Solutions

3

 

Enabling the Value Chain

3

 

Vendor Positioning

3

Vendor Profiles

6

Axioma

7

Barclays POINT

9

DST Global Solutions

12

IBM Algorithmics

14

Misys

16

MSCI — Barra and RiskMetrics

18

Northfield Information Services

20

Quantifi Solutions

22

S&P Capital IQ

24

State Street

26

SunGard APT

29

Wilshire Associates

31

Vendor Comparison

33

 

Positioning in the Investment and Risk Value Chain

33

 

Vendor Strengths in the Value Chain

34

 

Asset Class Coverage

35

Vendor Ranking

37

 

At a Glance

38

 

Advanced Technology

39

 

Breadth of Functionality

40

 

Client Base

41

 

Depth of Services

41

Looking Forward

43

Leveraging Celent’s Expertise

44

 

Support for Financial Institutions

44

 

Support for Vendors

44

Related Celent Research

45

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