Brazil-based hedge fund Paineiras Investimentos has selected Xenomorph’s TimeScape data and analytics management system to replace its current Excel-based solution for data management and validation, risk management and back testing. The hedge fund hopes the system will significantly accelerate its trading and risk management processes, according to partner and trader in the firm Andre Portilho.
The hedge fund, which primarily invests in a variety of assets and their derivatives, decided to move away from using an Excel-based solution because it had become time consuming, unwieldy and required substantial effort to operate and maintain, says Portilho. “TimeScape allows us to run our trading operations far more efficiently – freeing up staff from time consuming data maintenance and allowing more time to be spent on formulating our trading ideas,” he explains.
According to the vendor, TimeScape offered Paineiras a system that coped well with daily innovation in trading process and asset classes supported. The vector database capabilities of TimeScape enabled more tick data to be analysed in less time, and its flexible data model allowed complex data such as volatility surfaces to be handled, the vendor claims.
Naj Alavi, managing director of Xenomorph, explains that discussions to use TimeScape in the way Paineiras needed had been ongoing a few months prior to the start of the TimeScape trial. “This period was used to understand the needs of the firm and how TimeScape could be used to address these,” he says.
Portilho adds: “We were impressed by the speed of implementation by Xenomorph – following a successful evaluation of TimeScape, the system was in production within one month. TimeScape offers a multi-asset capability that covers the full range of our data management and decision support needs – an off the shelf system that has the flexibility and breadth to cope with our continuing need to innovate.”
The hedge fund’s users were no strangers to Xenomorph technology, as prior to joining Paineiras, users had experience of using TimeScape at another Rio-based firm at which the system had been installed, says Alavi. This must have helped in the selection process, as TimeScape was chosen above the two other unidentified solutions in the running.
TimeScape was used for a similar but not so sophisticated set up at the other firm the users had experience at, adds Alavi. For this reason, it was necessary to demonstrate TimeScape’s back testing capabilities and how to generate trade signals through TimeScape’s SDK framework, he continues.
“Paineiras selected TimeScape because of its inherent flexibility, its ability to work with any asset class, not being restricted to discrete data sets or vendors and the freedom to enrich existing or write custom analytics to create a system that simplifies data management, back testing and one that provides the firm with the necessary framework to develop OMS connectivity to execute trade signals generated through TimeScape,” Alavi explains.
A big selling point of the system was its flexibility, says Alavi, as it allows new data feeds and new pricing models, whether proprietary or third party, to be added by the users themselves. “TimeScape enables the firm to capture, store, validate, cleanse and analyse vast quantities of data very quickly. It removes the headache attributed to manual, error prone tasks and enables users and resources to be focused on more pressing, business related matters. Moreover, it is a licensing model that is in line with the firm’s expectations. Paineiras is no different to any other firm in the market. It wanted the biggest bang for its buck,” he adds.
The hedge fund hopes that TimeScape will increase efficiency and speed of data analysis as well as make it possible for it to run customised back testing and deal with complex processes such as volatility surface manipulation and interpolations. According to Alavi, Paineiras has made use of TimeScape’s ‘spreadsheet meets database’ capability, which he says allows analytics and reports to be customised in line with the daily requirements of the business.
The main milestones of the implementation process included demonstrating that TimeScape was the solution to Paineiras’ business and technical needs and then delivering a training programme for users. This programme allowed Paineiras to develop custom analytics and extend TimeScape for its own use with little or no assistance from Xenomorph – something Paineiras wanted, says Alavi.
TimeScape is now installed at a handful of firms in Rio and Sao Paulo with several additional firms preparing to commence trials, he continues. “Learning through conversations with firms operating in the Brazilian market, Xenomorph is confident that TimeScape’s functionality is what the market has been waiting for. Xenomorph expects a healthy take up of TimeScape by Brazilian firms,” Alavi concludes.