“We’ve risen to the challenge to offer a truly integrated risk management approach with APT Enterprise,” comments Laurence Wormald (pictured), COO and head of research, SunGard APT, adding:
“When you have different systems and you’re trying to estimate a VaR number by combining one number from the equity desk with another number from the rates or credit desk, that is a discredited model. During the financial crisis, too many firms discovered how dangerous it was to do that.”
APT Enterprise was launched in London on 25th September around a series of seminars entitled “The Challenges of Integrated Risk Management”. It uses the same engine that powers APT’s existing solutions, plus the risk calculations within SunGard’s cloud-hosted Hedge360 platform.
The purpose of APT Enterprise is to deliver managed reporting services to better support buy-side institutions as they grapple with the scale and complexity of regulatory and investor risk reports. As its name suggests, APT provides enterprise-wide integrated market and liquidity risk management. Its launch comes at an opportune time when managers are feeling the pressure of regulatory compliance as well as needing to explore ever-more exotic, innovative investment strategies to harvest new sources of alpha.
“The most basic service for institutions is daily risk reporting for their funds. Some of our largest clients have thousands of funds. The CRO has the job of looking across all these funds globally and knowing what the different exposures clients have by asset type, by country, by legal entity or by currency. They need to know the aggregate exposure of myriad market risks and be able to slice and dice risk data to meet their responsibilities. APT Enterprise is the tool to do that,” says Wormald.
APT supports illiquid assets, unlisted funds, traditional asset classes such as FX, commodities, equities and bonds, and virtually every type of derivative. At the heart of the system is a risk dashboard to enable senior management to get an instant visualisation of risk; critical when one considers the huge amount of market data and engineered data including volatility surfaces and yield curves.
“All that data that needs to be marshaled and prepared every day. We provide a series of workflow tools within APT Enterprise that are geared towards handling enterprise-level risk reporting. It is a fantastic productivity tool that allows institutions to get their data right quickly and use the risk dashboards to view every stage of the process. When it comes to producing the final reports they know they are accurate,” explains Wormald.
APT Enterprise has, therefore, been designed to solve the challenges of running large numbers of funds with different fund wrappers, legal entities and share classes. Integrated risk management is a growing necessity.
“Each structure will have its own reporting requirements and APT Enterprise takes care of everything. It means the manager doesn’t have to mess around modifying their core risk report. It provides a powerful automation and workflow environment for clients who have multiple fund types to report on,” adds Wormald.
Within the risk dashboard end users will have all key summary data – volatility, tracking error, VaR, beta, correlation, exposures, duration, greeks and so on – displayed via heat maps, pie charts and bar graphs and as Wormald concludes:
“Senior management really see the value in these dashboards because they can very quickly get a handle on what their portfolio managers are doing.”