Citadel Associates, provider of data management solutions to investment managers, has begun the roll-out of version 5 of its CADIS system to clients. CADIS sits at the heart of Citadel’s Investment Solutions Layer proposition. Version 5 contains new functionality for managing data associated with complex derivatives and structured products, and to facilitate more rapid take-on of new data sources.
During past months Citadel has announced four new deals with investment managers for CADIS, including Schroders (Reference Data Review, February 2007), and AMVESCAP, F&C and Canada Pension Plan CPP Investment Board (Reference Data Review, November 2006). Other existing CADIS users include Newton Investment Management, Russell/Mellon, Aegon Asset Management, Charles Schwab and Highmark.
According to Citadel director Stuart Plane, two key clients beta tested CADIS version 5 during June and July, and both are in the process of going into production now. “In early September a third client began beta testing and it too will go into production shortly,” he says, adding: “We plan to roll out version 5 to the rest of our clients during the next three to six months.”
The focus of Citadel’s work on the derivatives/structured products side has been to “reduce the time to market for the data management requirements” for these “instrument types that are becoming more mainstream for our core market of institutional asset managers”, Plane says. “The key to being able to support out clients is to be able to support constant change. New instruments are being created constantly and simply supporting the current set of products is not good enough. CADIS also has to be capable of dealing with instrument types that have not even been created yet, and version 5 offers increased flexibility to enable business users to add new attributes and manage new instrument types,” he continues.
CADIS supports structured products via a series of screens flexible to users’ requirements, he says. “They were first installed in version 4, and have seen a lot of take-on in version 4. Based on the feedback we have received from our clients we have enhanced the screens considerably, primarily adding business validation around every input entered in the screen, so users can code their own validation rules in the screen to ensure business users are inputting and looking at correct data. We have added more flexibility and more control,” Plane comments.
The second area of new functionality in version 5 is around data take-on. “We have added functionality to enable our clients to get data into and out of CADIS more quickly, whether from a back office outsource provider or a new vendor, or as the result of the addition of a new system such as a trade order management system, an execution management system or a derivatives risk management system,” he says. “We see increasing demand to take data in and push it out in ever-shortening timescales.”
To facilitate this improvement, Citadel has invested in a “data take-on wizard”, Plane continues. “This can be pointed at any source of data and will automatically write a series of rules to validate it is correct from a structural perspective and create components in CADIS to move and validate the data. This means the take-on process can take literally minutes. The wizard can be pointed at any source of data and enables the coding of more comprehensive business rules and the rapid addition of workflows around the data. We have put a lot of effort into this and it has paid significant dividends for our clients,” he reckons.
Plane says he is happy that with the functionality in version 5 Citadel has fitted CADIS to meet users’ data management requirements around derivatives and structured products. “This is the business area that really is putting the most strain on data management,” he contends.
Plane’s views are consistent with the findings of an A-Team report issued earlier this year, sponsored by data management vendor GoldenSource (Static Instrument Data Becomes Dynamic: OTC Derivatives, Securities Linkages, Shake Up Instrument Data), which revealed that OTC derivatives instruments are playing havoc with firms’ data management strategies. “A key area where we can add value,” says Plane, “is by enabling the data management people who understand these instruments to see where data has come from, what rules have been applied to it, who has changed the data and when other systems are using this data.”
However, he accepts that development of CADIS “can never stand still”. “A lot of new ideas are being generated both internally and externally,” he says. “For version 6 we are putting a lot of effort into adding comprehensive search facilities across the entire product.” Citadel receives “constant demand… to expose more data, more quickly and easily,” Plane reckons. “So we are looking, for example, at real-time web-enabled dashboards.”
This ongoing development “is all in support of our vision to enable the users who understand the data to get to grips with every single detail about how that data is being managed”, he adds.