Risk management solution provider Portfolio Science has extended the reach of its RiskAPI distributed risk engine through an agreement to integrate the product into FixQ, an enterprise investment management system from specialist software provider PortfolioShop.
RiskAPI uses an application programming interface that allows users to access exposure calculations through standard operating environments such as the Excel spreadsheet application, offering risk management capabilities to a broad spectrum of investment industry players, not just the largest and best-capitalised institutions.
APIs normally allow users to customise software by developing code that can access and manipulate the software’s features, says Portfolio Science president Ittai Korin, but RiskAPI takes the concept a step further by using a standardised interface to connect securely over the internet to a risk engine running on the firm’s servers.
“With Excel, any user with the RiskAPI Add-In and a subscription to the service can execute a broad spectrum of risk analysis calculations on their portfolios and positions – at an extremely affordable cost,” Korin says.
A major part of Portfolio Science’s business is with fund administrators and prime brokers that use the Enterprise version of RiskAPI to allow their investment manager clients to provide risk reporting to their own investors. The integration of RiskAPI into FixQ extends the benefits of the risk engine to all users of the PortfolioShop product.
According to Korin, the financial crisis of the past couple of years has prompted a much wider range of market players to examine how to offer risk management services. “Just two years ago most of the industry had little or no indication that risk management was something that could interest service provider clients,” he says. “The change of strategy is an apt reflection of how the landscape has evolved.
“Now PortfolioShop can offer a whole suite of risk reporting tools to its fund administrators and prime broker clients alongside its existing suite of reporting tools. Through this integration, several fund administrators and prime brokers can now offer risk reporting to their own fund manager clients. This represents a significant addition to each fund’s analysis capabilities.”
Established in 1999, PortfolioShop provides FixQ to clients including investment managers, broker-dealers, hedge funds and arbitrageurs worldwide. It covers portfolio accounting, performance measurement, order management and reporting, already offering a range of more than 150 report types spanning performance, transactions, management, profit and loss, compliance, utilities, position and reconciliation.
“Using RiskAPI, we have been able to completely embed a full suite of risk analysis features into FixQ,” says PortfolioShop president Harvey Sontag. “Our clients’ fund customers now have instant access to dynamic exposure and risk analysis.
“The service has allowed us to quickly offer powerful multi-asset risk analysis including value at risk, correlations, betas, derivative sensitivities, stress-testing and much more. The result is a powerful application that has accounting, reporting, performance, and now risk – a ground-breaking combination.”
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