SunGard – Best Risk Management Software Provider
SunGard’s APT solution models market risk, liquidity risk, and counterparty risk across both liquid and illiquid asset classes, supporting regulatory reporting, portfolio optimisation and performance analysis.
According to Dr Laurence Wormald (pictured), COO and head of research APT, SunGard’s asset management business, the focus for hedge fund managers today is on making risk more strategic.
He notes that managers are trying to tell a much better story about how they manage risk to improve their reputation and their asset raising capabilities, as well as helping with the overall performance of their funds.
“We think we can help our clients achieve that because we give them a comprehensive and coherent model in APT. Coherent in the sense that a single risk model is designed to provide coverage across all major asset classes. It’s also intuitive because APT is a factor model. It’s not just based on time series and pure statistical approaches,” explains Wormald.
These factors might include, for example, how inflationnary changes impact global markets, if there’s a shock to an economy like China, how FX conditions may change as a result of oil price volatility and so on.
“The factor model therefore provides intuition, broad asset class coverage and cohesion, all of which we believe helps managers do a better job in making risk strategic,” adds Wormald.
Expectations on hedge fund managers are much higher today due to the extent to which institutional investors make up their client base; not to mention the heightened scrutiny being applied by global regulators.
As such, achieving a greater level of intuition on risk helps managers to better communicate with their investors and the regulators, and provides an overall greater level of reassurance.
Within APT, managers can look top-down at their risk exposure and get the headline numbers in a timely way.
“Timeliness is very important in our system. It provides the ability, “at will”, to get risk reports on the portfolio rather than having to wait till the next morning. The end user can then drill down into the report to look more closely at the various risk factors at work to gain better intuition,” notes Wormald.
Flexibility is another of APT’s key attributes. As Wormald explains, it is “one solution delivered multiple ways”. This can be either on a standalone basis, as a cloud-based solution, or as part of a managed services offering. The latter two options support the ability to avail of the SunGard Hedge360 platform, within which APT is one of a series of modules for managers to run their operations front through back.
“It’s important to provide that level of flexibility as no two firms are exactly the same. Some people like tight integration within our Hedge360 cloud-based offering, others prefer the high degree of security and interactivity that comes with a deployed solution,” says Wormald.
Discussing developments for 2015, Wormald confirms that within Hedge360 “we can now deliver liquidity risk reporting alongside market risk reporting. We will also be offering more scenario analysis capability for stress testing to further broaden out the intuitive framework.” A one-click solution for AIFMD is also being developed to help managers with regulatory risk reporting.
“We are committed to helping our clients make risk more strategic. We think that’s the right approach for them to continue to grow their businesses,” says Wormald.