Schroders buys OTC derivative analytics application from CAifT
London-based fund manager Schroders has expanded its relationship with the UK-based fixed income and derivatives portfolio modelling software vendor CAfIT to include use of an "analytics engine."
Schroders is using the product initially as its provider of analytics for OTC derivatives, but plans to expand its role to other assset classes.
"We have a significant fixed income investment programme underway, and wanted to implement a standalone analytics calculator for OTC derivatives to feed our various decision support tools," says Matthew Oakeley, Head of Group IT at Schroder Investment Management. "We have a long-standing relationship with CAfIT and have been working with them on this concept since last summer. The analytics engine is the direct result, filling a clear gap in the market for buy-side derivative applications of this kind. Schroders is excited about the unique positioning of CAfIT's analytics engine, and since going live in December 2006, it has been a significant success."
CAfiT says implementing the analytics engine took place over a number of weeks, with the Schroders' IT team handling the data set-up, synchronisation with a variety of market data feeds and the scheduling of in-house accounting and static data.
The analytics engine feeds directly into Schroders' internal applications, providing a central resource in line with the fund manager's aim of delivering analytics to its individual fund managers. Schroders plans to provide other product teams with access to the engine, since it reckons the application has the potential for operation across multiple business areas.
"Schroders is a long-standing client, with whom we have an excellent strategic relationship that has been strengthened by this latest development," says CAfIT's Commercial Managing Director, Raquel Elias. He continues, "We are delighted that they have chosen to use our analytics engine as the core feed for their OTC business. Investment businesses must have access to a consistent set of numbers across their entire investment universe if they are to compete effectively, and until now, there has not been a single product capable of servicing this requirement."
CAfIT's analytics engine aims to provide a centralised analytic and valuation calculation engine with comprehensive asset class coverage. It also aims to offer risk assessment, enabling exposure and risk on all asset types to be valued and calculated.
Calculated analytics and returns are published to the CAfIT database, stored and then distributed to the rest of the organisation, with the aim of providing a consistent, firm-wide analytical view of every asset, in line with the concept of a "firm-wide valuation."
When linked to CAfIT's modelling systems, the analytics engine also supports re-pricing of assets to ensure that investment decisions are made on accurate, timely information as opposed to out of date, start of day analytics.