Portfolio Systems 2006: Full Suite with Risk & Derivatives

March 24, 2006

Abstract

New York, NY, USA March 24, 2006

Portfolio Systems 2006 Series: Full Suite with Risk & Derivatives

Celent estimates the North American portfolio systems market will reach US$973 million by 2008 with approximately $243 million in direct sales to hedge funds.

Traditional asset managers that once shied away from derivatives are now increasingly embracing them. This shift, along with the growth of hedge funds, has assured the rise of a new breed of portfolio system that includes advanced risk analytics and derivatives processing in the full front-to-back portfolio suite segment. In the report, Portfolio Systems 2006 Series: Full Suite with Risk & Derivatives, Celent profiles several portfolio systems that include these features.

Celent found that crossover vendors from investment banking are threatening traditional providers in the mature portfolio systems market that do not have advanced risk and derivatives processing capability. However, these newcomers to the buyside may not be as comprehensive in product scope for listed security order routing, compliance, and end client servicing.

Celent estimates that overall spending on portfolio system technology in North America was US$903 million in 2005 and will reach US$973 million by 2008, driven by increased automation of global investing, the need for internal controls, higher costs of multi-asset class platforms, and demand from hedge funds. The bulk of this spending, 80%, is from traditional asset managers, with the remaining 20% from hedge funds.

Traditional and Hedge Fund Technology Spending on Portfolio Systems in North America

"Hedge funds have a broad range of options to access technology. Small firms may continue to rely on prime brokers, new and existing technology providers, long-time fund administrators, and new entrants— offering both technology and business process outsourcing, as well as new offers from the bulge bracket firms and management consultants setting up outsourcing capabilities to serve hedge funds. It's good to be king," says Denise Valentine, senior analyst and author of the report. "Further, as the traditional asset manager continues to both consolidate and diversify product line, expect more interest in multi-asset class systems. These solutions can be deployed across the organization and serve the diverse and changing needs of multiple investment teams," she adds.

This report profiles and compares offerings from Calypso Technology, FNX Solutions, Imagine Software, Murex, Sophis, and SunGard FRONT ARENA. Brief profiles are also included on vendors whose systems without risk analytics, including Advent Software, Beauchamp Financial Technology, Integrated Business Systems (IBSI), Linedata Services, and SS&C Technologies.

This is the third report in Celent's Portfolio Systems series. Previous reports in this series include Portfolio Systems Series 2005: Full Suite with FIX and Portfolio Systems Series 2005: The Intermediary Market.

The 41-page report contains 9 figures and 12 tables. A table of contents is available online.

 

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

New York, NY, USA March 24, 2006

Portfolio Systems 2006 Series: Full Suite with Risk & Derivatives

Executive Summary 3
Introduction 4
  Mapping The Vendor Landscape 4
  Criteria For Inclusion 7
Market Trends 9
Solution Comparatives 15
Vendor Profiles 26
  Calypso Technology 26
  FNX Solutions 27
  Imagine Software 29
  Murex 31
  Sophis 32
  SunGard FRONT ARENA 33
Additional Vendor Briefs 35
Concluding Thoughts 39
Objectivity & Methodology 40

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