Following SunGard’s upgrade of the technology platform underlying FastVal last year, SunGard has netted its first client of 2010 for the valuations solution in the form of global fund administrator Columbus Avenue Consulting. The firm, which is focused exclusively on the hedge fund market, is the first client to go live on version 3.0 of the platform, says Gavin Lee, chief operating officer of SunGard’s FastVal business unit.
Columbus Avenue has opted for an application service provider (ASP) version of FastVal in order to help it value its clients’ portfolios and help it to mitigate operational risk, enhance transparency and improve overall operational risk. The firm selected the solution because of its existing relationship with the vendor and the direct integration between the SunGard VPM portfolio accounting solution, which Columbus Avenue has already implemented, and FastVal.
Bonnie Han, partner at Columbus Avenue Consulting, explains: “We feel that the integration between the two SunGard solutions will save us a great deal of time, in addition to reducing the risks inherent in our manual data entry. As our business grows, and we continue to take on funds with more complex strategies, it is essential for us to have a solution that can provide accurate, transparent pricing and valuation across our entire customer portfolio.”
Accordingly, the integration between SunGard’s FastVal and VPM solutions will allow Columbus to pass up to date valuation and pricing data directly to VPM’s general ledger, eliminating the need for various file conversions between disparate vendor platforms. This will help Columbus to consolidate and streamline its vendor relationships to help provide quicker time to market, as well as further increasing efficiency and mitigating risk around redundant data transfer.
The FastVal solution aims to provide financial institutions with full transparency of the models and underlying market data used in the valuation process, as well as enhanced Greeks, greater functionality in the running of intraday valuations, and comprehensive product coverage across all asset classes. The vendor claims the solution will therefore help Columbus to collect pricing and valuation data, with round the clock feeds from exchanges and other data providers and enable it to generate valuations up to four times a day.
FastVal has been around since 2001, but the vendor took the decision last year to reinvent the service by moving it onto a new technology platform. According to SunGard, the solution is now better able to accommodate its large volume users and is now offered as a pay as you go service, so users pay as and when they need to use the service.
SunGard claims that it has developed its own product strategy for hedge funds and asset managers that are being increasingly required to provide more information around the processes by which they have derived their prices, explains Paul Compton, head of product management for SunGard’s alternative investment business. Clients and regulators are certainly both seeking an extra level of transparency and want more and more data around prices, especially those in the OTC derivatives space.
The vendor differentiates its own valuations solution from the rest of the market because of its independence; much of the competition is aggregating broker quotes rather than building their own models and processes for pricing, says Compton.
In terms of customer breakdown, FastVal currently has a fairly horizontal split with investment banks, commercial banks, buy side firms and corporates all using the service. The vendor is also seeing a lot of interest from US-based hedge funds at the moment, as they are now under an increasing amount of scrutiny around their valuations, adds Compton.