SunGard Targets Treasuries
By Karen Spinner
Nowadays, every burgeoning financial software entrepreneur must share the same dream: Develop a product, pick a market niche, develop a quality list of blue chip customers…and then sell your company to SunGard Data Systems, the corporate entity whose subsidiary, SunGard Trading Systems, is growing at an alarming rate. But the latest addition to the SunGard portfolio is not a banking system; instead, it's ICMS, a leading provider of treasury management systems to Fortune 1,000 companies.
SunGard's purchase of ICMS caps off the firm's ambitious foray into the world of corporate treasury and risk management services. ICMS and recent SunGard acquisitions—Multinational Computer Models and ADS Associates' ResourceQ division—have just been folded into SunGard Treasury Systems, which, overnight, has become a leading presence in corporate financial systems.
ICMS provides cash management, forecasting and financial planning software, while MCM is a front-through-back-office system designed specifically for corporate treasury organizations that use interest rate and foreign-exchange contracts to hedge their exposure to the global financial markets. ICMS's client base includes more than 550 multinational corporations. MCM, despite competition from Wall Street Systems, FXpress and other newcomers, has the largest market share of any corporate trading and risk management system. Its clients include more than 200 multinational corporations. When all is said and done, SunGard's Treasury Systems group has more than 750 client licenses in over 20 countries around the world.
SunGard isn't the only systems vendor forging ahead with strategic acquisitions. Berkeley, Calif.-based BARRA has been buying technology. On June 4, BARRA announced its intention to purchase “substantially all of the assets and certain liabilities” of Redpoint Software for approximately $5.5 million in cash and performance-contingent payments of up to $12.5 million over a two-year period.
BARRA, the leading supplier of risk management services to the investment management community, purchased Redpoint primarily to cannibalize its underlying data management technology and thus enhance its Total Plan Risk product. Total Plan Risk helps money managers and some plan sponsors analyze multi-asset-class portfolios. As in the trading universe, investment managers using Total Plan Risk require the ability to integrate data residing in numerous formats and on many different platforms easily.
Redpoint's TotalRisk Architecture provides on-line virtual data integration by managing real-time data caching. Data input into several different databases, for example, can be viewed and analyzed as if they had come from a single, integrated data source. “We can now offer the most advanced enterprise-wide risk management solutions to the full range of financial institutions,” says Andrew Rudd, BARRA's CEO.
Rudd can be thankful that SunGard Trading Systems is not focusing on the investment management market…yet. Or perhaps he is waiting for a call from Chris Conde. After all, once SunGard establishes a large-scale presence in corporate treasuries, investment management is the next logical place to go.
Continuing the trend toward financial software mergers and acquisition, IQ Financial Systems has signed an agreement with Rolfe & Nolan to purchase its Capital Markets Division, which includes the Lighthouse trading system. Perhaps the integration of IQ with Rolfe & Nolan will offer a market alternative to SunGard's impressive array of products.
NEW PRODUCTS AND RELEASES
C-ATS is back
For the last year or so, officials at Palo Alto, Calif.-based C-ATS Software have admitted being in a publicly dormant development mode. Now the company seems to be back in gear. Earlier this year, it announced that its system had been independently clocked and verified at 1.7 million trade valuations per minute in full-blown Monte Carlo analysis, making it the only enterprise risk management solution proven fast enough and accurate enough to support overnight and intraday risk analyses for optimal management of capital, pricing and counterparty relationships.
And recently, C-ATS released CARMA 3.0, which includes considerable enhancements. These enhancements include the ability to calculate value-at-risk or potential credit exposure at the extreme end of a distribution tail, market and credit risk-based limits management, the ability to calculate netted and non-netted credit exposures and credit VAR, and the ability to simulate the future distribution of cash accounts to reflect portfolio-wide liquidity risk. CARMA 3.0 also provides new features designed to make CARMA more user-friendly, including graphical on-line reporting, point-and-click configuration screens, the ability to support flexible, user-defined analytic time-horizons and the ability to support volatility smile structures within all available pricing matrices.
Finally, CARMA has incorporated new tools to enhance the system's flexibility and to provide a more robust underlying systems architecture. First, the new Generalized Instrument Valuation API allows users to incorporate new or proprietary valuation models within CARMA's powerful risk engine easily and quickly. Second, the CARMA Data Model, available for Sybase and Oracle, is extensible to new instruments and is open to third-party reporting and graphing tools.
Panorama gets web wise
The distribution of risk management reports over the Internet has long been on many risk managers' checklists, since paper-based reports are time-consuming to generate and to deliver physically to numerous managers. Infinity, a SunGard company, joins other vendors such as Algorithmics in delivering a prepackaged Internet-based reporting solution with the upcoming introduction of Panorama Net+. The product allows users to obtain risk management reports via a corporate intranet, and it promises, in particular, to improve the lives of remote or mobile consumers of risk management reports without requiring IT departments to undertake custom development.
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